Pfizer Inc. is making significant changes to its cancer drug business as it prepares to finalize its $43 billion acquisition of Seagen Inc., signaling a strategic shift away from its waning Covid-related endeavors and a deeper focus on the highly lucrative field of oncology. In a joint statement released on Tuesday, Pfizer and Seagen announced plans to merge their efforts within a new division, aimed at enhancing the "focus, speed, and quality of execution in oncology." This restructuring move follows a trend among major pharmaceutical companies that have sought to prioritize their oncology divisions. According to IQVIA, a leading analytics firm, global spending on cancer treatments is projected to reach $375 billion by 2027. AstraZeneca Plc has achieved remarkable growth through a similar restructuring, separating its oncology segment from the rest of its drug portfolio.
With the Federal Trade Commission's deadline to oppose the Seagen deal expiring on Monday, Pfizer is now intensifying its focus on cancer therapies. The acquisition, set to be finalized on Thursday, will bring a range of antibody-drug conjugates (ADCs) into Pfizer's portfolio. ADCs are highly sought-after drugs in the pharmaceutical industry as they deliver potent doses of medication, maximizing their effectiveness in killing tumors while minimizing damage to surrounding tissues.
Recent industry deals have further underscored the value of ADCs. Last month, AbbVie Inc. announced its agreement to acquire ADC-maker ImmunoGen Inc. for $10.1 billion. Additionally, Bristol Myers Squibb Co. is set to pay up to $8.4 billion for co-development and commercialization rights to an experimental lung and breast cancer drug by SystImmune Inc. Meanwhile, Merck & Co. has committed up to $22 billion in a deal to secure rights to sell three experimental ADCs from Daiichi Sankyo Co.
As part of the restructuring, Pfizer is appointing Aamir Malik, its current chief business innovation officer, to lead its US commercial division. Alexandre de Germany, who has served at Sanofi and Laboratoires Majorelle, a French specialty pharma company focused on women's health and urology, will head the international division. Notably, Chief Commercial Officer Angela Hwang will be departing Pfizer after a 27-year tenure at the company.
The acquisition of Seagen is seen as a critical step for Pfizer, which has seen its revenue decline as the Covid-19 pandemic subsided, despite reaping substantial profits from its vaccine and pill. Pfizer has revised its revenue guidance twice this year, most recently lowering it by $9 billion in October. The company has scheduled the release of its 2024 forecast for Wednesday.
While the European Commission has previously approved the Seagen acquisition without any conditions, Pfizer announced on Tuesday that it would address concerns from the FTC by donating the US royalties of its cancer drug Bavencio to the American Association for Cancer Research.
As Pfizer braces itself for the completion of the Seagen deal, the company is positioning itself to capitalize on the burgeoning field of oncology. The merger will bolster its product portfolio with coveted ADCs, placing Pfizer in a strong position to tap into the growing global demand for cancer treatments in the coming years.