WSJ: Merck seeks to buy ADC giant Seagen



According to the Wall Street Journal, Merck is considering acquiring Seagen, the leading ADC company. Affected by this news, Seagen’s largest intraday share price rose by more than 18%. By the close, the company had surged 12.7%, bringing its market value back to more than $30 billion.

Merck and Seagen have been discussing the possibility, people familiar with the matter told The Wall Street Journal, and that talks have been ongoing for some time and a deal is not imminent. Merck and Seagen may finally sign a new marketing deal. In addition, other unnamed companies are also eyeing Seagen as a takeover target.

Merck and Seagen have previously collaborated. In September 2020, Merck introduced the LIV-1-targeting antibody-drug conjugate (ADC) ladiratuzumab vedotin, with a total transaction value of $4.5 billion, including a $600 million down payment, a $1 billion equity investment, and a maximum of $2.6 billion in mileage. At the same time, Merck acquired the rights to commercialize the tyrosine kinase inhibitor tucatinib in Asia, the Middle East and Latin America, and other regions (outside the U.S., Canada and Europe) for $190 million.

Seagen is a leader in the ADC field. Currently, 4 new ADC drugs (3 independent research and 1 cooperative development) have been approved for marketing, and there are many new ADC drugs under development. In 2021, the sales revenue of the listed products for Seagen will be 1.38 billion US dollars.

Merck may not be the only suitor (Suitor), some people familiar with the matter told the Wall Street Journal, and its company is also eyeing cancer-focused biotechs. In a 2020 deal, Merck acquired 5 million shares of Seagen for $1 billion. The big pharma also paid $600 million upfront for the biotech’s LIV-1-targeted antibody-drug conjugates (ADCs), including state-of-the-art ladiratuzumab vedotin. In addition to this, the two companies have signed several other partnerships. They collaborated on Seagen’s HER2 small-molecule drug Tukysa, including combining it with Merck’s PD-1 inhibitor Keytruda. Merck also holds rights to Tukysa in Asia, the Middle East and Latin America. What’s more, Seagen and partner Astellas are also combining their nectin-4-directed ADC Padcev with Keytruda for bladder cancer. But Merck and Seagen’s shared cancer-fighting ambitions could raise antitrust concerns.