Pfizer to Issue $31 Billion in Bonds to Fund Seagen Acquisition

　　【Pharmaceutical Network Enterprise News] Recent news indicates that the multinational pharmaceutical company Pfizer will sell a total of $31 billion in bonds in eight tranches to fund the acquisition of Seagen. According to insiders, the longest bond maturity is 40 years, with an expected yield that is 1.8 percentage points higher than Treasury bonds.
 

From the news, Pfizer's determination to acquire Seagen is set. The merger and acquisition cooperation between the two parties took place on March 13 this year. According to the agreement at that time, Pfizer will acquire Seagen at a cash price of $229 per share, with a total enterprise value of $43 billion. The boards of both companies unanimously approved this transaction.
 

The two companies expect to complete the transaction by the end of 2023 or early 2024, subject to customary closing conditions, including approval by Seagen shareholders and receipt of required regulatory approvals. Seagen’s risk-adjusted revenue contribution is expected to exceed $10 billion by 2030.
 

So, what kind of company is Seagen that makes Pfizer so desperate? According to public information, Seagen is a pioneer in the research and development of antibody-drug conjugates (ADCs), known as "biological missiles" in the market. ADC drugs are formed by the conjugation of monoclonal antibodies and small molecule drugs, representing an innovative cancer immunotherapy with better targeting capabilities. They can selectively destroy harmful cells while protecting healthy ones and have become a key focus for global innovative pharmaceutical companies.
 

ADC is also considered the next "golden" track after PD-1. In recent years, with the dense listing of innovative ADCs, transactions and collaborations within the entire field have been frequent, driving the rapid growth of the ADC market size. Data shows that the global ADC drug market size was $2.8 billion in 2019 and is expected to reach $20.7 billion by 2030, with a compound annual growth rate of 20%. According to market forecasts from a Nature sub-journal, the global ADC drug market size will reach $16.4 billion by 2026. A research report by CITIC Securities also indicates that the global ADC drug market size is expected to exceed $40 billion by 2026.
 

Seagen has a rich layout in the ADC drug field. The company currently has four approved cancer therapies, including 3 ADC drugs, and its total sales in 2022 were close to 2 billion US dollars.
 

Through this collaboration, Pfizer may hope to expand its oncology treatment portfolio to address the decline in sales of related products. The company anticipates a $17 billion drop in revenue by 2030. Currently, in the field of oncology, Pfizer's oncology treatment portfolio includes 24 approved cancer drugs.
 

In the industry's view, the ADC drug market is vast, but competition is also becoming increasingly fierce. Currently, there are approximately 700 active traditional ADC drugs globally, with 15 products approved for marketing and over 200 others in various stages of clinical research. As more drugs come to market in the future, whether Pfizer, after acquiring Seagen, can stand out in this field and drive revenue growth remains an event worth watching.
 

Pfizer's Financial Results for Q4 and Full Year 2022 Show Revenue Growth of 2% Year-over-Year to $24.29 Billion in Q4; Net Profit was $4.995 Billion, a Year-over-Year Increase of 47%. Adjusted profit was $6.551 billion, up 44% year-over-year. Among these, the revenue from the Comirnaty vaccine was $11.329 billion, while the revenue from the oral drug Paxlovid was $1.834 billion. For the full year 2022, revenue was $100.33 billion, a year-over-year increase of 23%; net profit for the year was $31.372 billion, up 43% year-over-year. The adjusted profit for the full year was $37.7147 billion, a year-over-year increase of 63%.
 

According to Pfizer's Q1 2023 financial report, Pfizer's revenue in Q1 2023 decreased by 29% year-on-year to 18.282 billion US dollars, of which the combined revenue contribution of the Comirnaty vaccine and the oral drug Paxlovid was 7.1 billion US dollars; net profit was 5.543 billion US dollars, a year-on-year decrease of 30%.
 

Disclaimer: In any case, the information or opinions expressed in this article do not constitute investment advice to any person.