Seagen fielded multiple offers before agreeing to a whopping $43 billion acquisition by pharma giant Pfizer.
The Seattle-area company revealed negotiation details with several companies in a recent SEC filing outlining the jostling that eventually led to the largest biopharma transaction in three years.
A recent SEC filing refers to four unnamed companies: “Company A,” “Company B,” “Company C,” and “Company D.”
Seagen co-founder and longtime CEO Clay Siegall held “extensive” discussions in 2020 and 2022 with Company A prior to resigning in May last year following an alleged domestic violence incident (prosecutors said in December that Siegall would not face charges).
After Siegall left, three other biopharma companies — B, C, and D — in addition to Pfizer indicated interest in deal.
The filing does not provide names of the companies, but the Wall Street Journal reported last summer that Seagen and Merck were in “advanced talks” over an acquisition.
Read on for more details in the filing on how the deal with Pfizer came about and how the other companies were left out.
Seagen rebuffs proposals from Company A in 2020
In October 2019, Siegall met with representatives from “Company A,” which was interested in exploring a “strategic transaction” with Seagen, according to the filing.
Through March 2020, Company A followed up with a series of six proposals to Seagen. Among the proposals: an acquisition for $200 per share in cash (the Pfizer acquisition values Seagen at approximately $229 per share), a strategic collaboration involving a 20% equity stake in Seagen, and a deal involving Seagen spinning off a new company prior to acquisition, focused on drug discovery and early development.
Talks concluded in April 2020 after the Seagen board rejected the offers over price and the spinout company proposals, according to the filing.
Seagen and Company A renew discussions in early 2022
In February 2022, Company A representatives requested a meeting with Siegall, and expressed interest in buying Seagen for $235 to $245 per share, according to the filing. On May 5, Company A submitted a proposal with a price of $230 per share. Seagen provided a counteroffer the next day with a price of $235 per share. On May 15, the day of Siegall’s resignation, Company A received access to due diligence materials.
Other biopharma companies indicate an interest in Seagen after Siegall’s resignation
Within days of Siegall’s resignation, representatives of two other global biopharma companies, “Company B” and “Company C”, expressed an interest in a “strategic transaction” with Seagen. The deals with either company would need to involve stock transactions instead of 100% cash, the Seagen board concluded. Seagen did not pursue the potential offers.
Seagen reaches out to Pfizer
On May 19, the Seagen board decided to approach Pfizer about a potential acquisition, followed by a call between a board representative and Pfizer CEO Albert Bourla. The next day a Pfizer executive conveyed that Pfizer had been assessing Seagen “for some time,” according to the filing, and was interested in exploring a deal.
Pfizer’s first offer and another suitor
Pfizer provided a written proposal to Seagen on June 1 with a proposed acquisition price of $210 to $220 in cash per share. Seagen conveyed that the price was “not adequate” and invited Pfizer to provide an updated proposal after conducting due diligence, according to the filing. Later that month, the CEO of yet another biopharma company, “Company D”, conveyed a proposed acquisition price of $200 per share. Seagen rejected the proposal and Company D did not provide a counteroffer. On June 13, Pfizer said that it also would not provide a new proposal.
Company A withdraws its offer
On August 19, Company A’s offer was reduced to $210 per share or less in the wake of Seagen’s loss in a long-running patent dispute with Daiichi Sankyo. On September 21, Company A it said it was no longer interested in discussing a deal with Seagen.
Seagen keeps advancing therapies
In the fall, Seagen released a series of announcements showcasing the success of its therapies and advancing their use. These included the approval of Adcedtris in a pediatric population with Hodgkin lymphoma, and early data showing signs of efficacy in a phase 1 trial for a candidate therapeutic.
The U.S. Food and Drug Administration also set an “accelerated approval” date for its decision on Seagen’s application to combine Tukysa with Merck’s immunotherapy drug Keytruda. And on Jan. 19, the FDA granted accelerated approval to Tukysa in combination with another drug, Herceptin, for certain patients with metastatic colorectal cancer.
Pfizer renews discussions and the deal is sealed
On Jan. 27, Pfizer and Seagen renewed discussions, with Pfizer initially offering $210 to $220 per share. Bourla also conveyed that Pfizer was interested in retaining Seagen personnel and maintain a presence in the Seattle area. On Monday, March 13, the deal with Pfizer was announced, valuing Seagen at $229 per share, a 33% premium — and much more than $7/share, the value of the company when it went public in 2001 under the name Seattle Genetics. The deal is expected to close in late 2023 or early 2024.
