Blair Cautions Investors On Overreacting To 'Early-Stage' Pfizer/Seagen Talks
- In a news article by the Wall Street Journal, Pfizer Inc is reportedly in early-stage talks to acquire Seagen Inc for over $30 billion.
- In June last year, the Wall Street Journal reported that Merck & Co Inc showed interest in buying Seagen.
- In the article, the deal was reported to be a price of at least $200 a share, equivalent to roughly $40 billion or more.
- William Blair writes that since the discussions between Seagen and Pfizer are reported to be "early stage" in nature, it cautions investors not to overreact to the news.
- Keeping its top pick, the analyst reiterates its Outperform rating on Seagen.
- If the deal happens, with the M&A process, there will be several hurdles to overcome (including FTC concerns), and the entire process could take months to materialize.
- The analyst says it would be surprised by a decision to sell the company unless it transacts at or above the previously reported price of $40 billion (or $215 per share)
- William Blair's bullish thesis is based on the long-term growth potential, driven by approved products—Adcetris, Padcev, Tukysa, and Tivdak; and expanding late- and early-phase assets within the company's pipeline.
- Although, the analyst said some volatility is expected due to the potential of Padcev to disrupt the urothelial carcinoma space with the upcoming approval on or before April 21.
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