Home BUSINESS News WSJ News Exclusive | Merck Deal for Seagen Seen as Unlikely by Earnings Release

WSJ News Exclusive | Merck Deal for Seagen Seen as Unlikely by Earnings Release

WSJ News Exclusive | Merck Deal for Seagen Seen as Unlikely by Earnings Release



& Co.’s roughly $40 billion deal for

Seagen Inc.

is unlikely to be finalized ahead of the pharmaceutical giant’s earnings later this month, though the talks remain on track, according to people familiar with the matter.

The Wall Street Journal reported earlier this month that Merck aimed to agree on a purchase of the cancer biotech within a few weeks, a plan that has since been delayed, the people said.

The change is due partly to a need to wait for data expected soon from a study evaluating one of Seagen’s treatments, the people said. There is also a desire to possibly see the outcome of a royalties-payments case Seagen is pursuing that is also expected soon, the people said. Both could have an impact on Seagen’s valuation.

There is still no guarantee the companies will reach agreement on a takeover deal. Merck is set to report its fiscal second-quarter earnings July 28.

Acquiring Seagen would help Merck broaden its lineup of cancer drugs, currently led by the blockbuster immunotherapy Keytruda.

Seagen helped pioneer a class of drugs known as antibody drug conjugates. The therapies take advantage of the honing abilities of antibody drugs to deliver a potent toxin to a specific tumor target.

As soon as this month, a study evaluating Seagen’s Padcev as a first-line treatment for bladder cancer could produce data. The study is examining Padcev’s use alone and in combination with Keytruda, according to analysts.

Padcev is currently approved to treat bladder-cancer patients who had failed a previous therapy. Sales for treating first-line bladder cancer could amount to billions of dollars a year if study results are positive and regulators approve the use, analysts have estimated.

A combination with Keytruda for bladder cancer could also help Merck extend the commercial life of its product after current patents run out later this decade, according to the analysts.

Additionally, Seagen could receive significant royalties and milestone payments if it wins an arbitration case and other litigation against Japanese drugmaker

Daiichi Sankyo Co.

Ltd., a former partner that went on to develop its own line of antibody drug conjugates including a breast-cancer therapy called Enhertu.

Seagen has alleged that Enhertu and the rest of Daiichi’s antibody-drug-conjugate pipeline infringes on Seagen’s patented technology, while Daiichi has said Enhertu doesn’t rely on Seagen’s technology, according to analysts. Daiichi sells Enhertu with



A ruling in the arbitration case is expected as early as this summer, according to people familiar with the matter.

Write to Cara Lombardo at cara.lombardo@wsj.com and Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

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Appeared in the July 16, 2022, print edition as ‘Merck’s Seagen Deal Delayed by Study Data.’


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