Merck takeover talks with Seagen have hit a hurdle; report

Merck & Co’s negotiations with Seagen over a possible takeover have stalled because the two sides cannot agree on a price, according to Bloomberg, citing people familiar with the matter.

The impasse is threatening the deal, says the report, although those involved said talks could still resume and lead to an agreement. Neither Merck nor Seagen have said they will comment.

Rumours that Merck was interested in a bid for Seagen first emerged in June, with the big pharma reportedly considering a $200-plus per share offer for the antibody-drug conjugate (ADC) specialist that would value the company at around $40 billion.

If confirmed, that would make it the biggest takeover deal in more than ten years for Merck, although there has already been speculation that a merger could fall foul of antitrust scrutiny, given both companies’ position in cancer therapies.

Merck and Seagen are already working together quite closely, as the big pharma took a $1 billion stake in Seagen in 2020. That deal gave it rights to the biotech’s LIV-1-targeting antibody-drug conjugate (ADC) ladiratuzumab vedotin and follow-up candidates, with another $600 million paid in cash.

Meanwhile, Merck also has rights to Seagen’s oral HER2 inhibitor Tukysa (tucatinib) in markets outside the US, Canada and Europe.

Buying the company outright would add four approved oncology drugs – including Padcev (enfortumab vedotin) for bladder cancer – and help Merck prepare for the loss of patent protection on big-selling cancer immunotherapy Keytruda (pembrolizumab) around the end of the decade.

Bloomberg notes that interest has heightened in Seagen as a takeover target following the departure of co-founder and chief executive Clay Siegall in May, who had been opposed to a sale. Siegall resigned in the wake of allegations of domestic abuse, which he denies.

Shares in Seagen are currently trading at $164 and were unmoved by the report of stalled negotiations.

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