Merck's Deal With Seagen May Have Fallen Through. Now What?
Following months of speculation over pharmaceutical giant Merck's (NYSE: MRK) potential takeover of cancer-focused biotech Seagen (NASDAQ: SGEN), reports are now surfacing that the two companies couldn't reach an agreement over pricing. So now it seems that nothing may come of it after all. So does this change Merck's value?
Merck has one of the premier oncology franchises in the industry and sells $17 billion of industry-leading cancer drug Keytruda. The drug is approved for at least 14 different types of cancer, and its sales just keep growing. Year-over-year revenue grew 26% in the second quarter. But Keytruda's patents expire in 2028, and Merck needs to find a way to replace a drug that currently accounts for about one-third of its total sales.
Meanwhile, Seagen offers sophisticated technology that directly targets a tumor to improve cancer treatment. The idea is that its antibody-drug conjugates (ADC) can differentiate between cancer and healthy cells, so the medicine only acts where it is needed. The construct contains a monoclonal antibody to identify and bind to the cancer cell, triggering a process to release the chemotherapy inside the cancer cell. This should make the treatment more effective while limiting the side effects.
Source Fool.com
