FTC asks for more info on Pfizer’s $43bn Seagen takeover
The US Federal Trade Commission (FTC) has asked for more information on Pfizer’s $43 billion agreement to acquire Seagen before it will deliver a decision on whether the deal can go through.
The FTC’s second request for information is part of the standard review process carried out by the financial regulator when considering M&A transactions. Nevertheless, it suggests that the deal may not go through as easily as the two companies had hoped, and will extend the time before it can be completed.
FTC rulings are being closely watched in the pharma sector at present, as there have been signs for some time that it is taking a tougher line on large-scale M&A. There has been some nervousness over the Pfizer/Seagen transaction, after the FTC sought to block a proposed $26 billion takeover of Horizon Therapeutics by Amgen and also to dismantle Illumina’s already-completed acquisition of cancer diagnostic company Grail.
In May, for example, the FTC filed a lawsuit to try to stop the Amgen/Horizon deal on the grounds that Amgen would be able to use its marketing muscle to gain preferential formulary positions for Horizon’s therapies, thyroid eye disease drug Tepezza (teprotumumab), and gout med Krystexxa (pegloticase).
Comments by the regulator that consolidation in pharma was giving large companies greater power to force through price hikes for drugs have raised fears of more widespread opposition to bigger M&A deals in the sector.
Both Pfizer and Seagen have been asked to supply “additional information and documentary materials” in relation to the $229-per-share merger, which was first agreed in March and would give Pfizer four approved oncology drugs, including three antibody-drug conjugates (ADCs).
In a filing with the Securities & Exchange Commission (SEC), Seagen noted that both companies will respond to the second request “promptly” and will “continue to work cooperatively with the FTC in its review of the merger.”
The filing also noted that the European Commission started its own review of the transaction, and approval in the EU will also be a condition for closing the deal.
Seagen said it “continues to expect that the merger will be completed in late 2023 or early 2024, subject to the fulfilment of customary closing conditions, including receipt of required regulatory approvals.”
Pfizer has previously said it reckons Seagen’s products could contribute more than $10 billion to its revenues in 2030, with significant growth beyond that date.