Pfizer to lift $31 billion for Seagen deal in debt offering

Pfizer plans to lift $31 billion through a debt offering to fund its proposed acquisition of cancer drugmaker Seagen, for what can be its largest takeover since 2009, in keeping with a recent filing with the Securities and Exchange Commission.

Pfizer expects to finish the $43 billion Seagen buyout later this 12 months or in early 2024. 

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The debt offering is predicted to shut on May 19, in keeping with a prospectus complement Latest York-based Pfizer filed with the SEC late Tuesday. 

The pharma giant’s debt offering can be the biggest since CVS Health sold $40 billion of bonds in 2018 to finance its acquisition of health insurer Aetna. 

Pfizer’s move comes as other corporations including Apple, T-Mobile and Merck rush to tap the U.S. bond market ahead of a possible spike in borrowing costs sparked by the debt ceiling standoff. 

Pfizer’s stock price dropped barely on Wednesday.

The corporate said it should secure funding for the deal to purchase Bothell, Washington-based Seagen through eight tranches of notes that can mature between 2025 and 2063.

Each tranche is price $3 billion to $6 billion.

The yield to maturity on Pfizer’s 10-year bonds can be 4.75%, which is around 125 basis points higher than the U.S. 10-year Treasury note.

Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase are managing the debt sale. 

Pfizer in March agreed to purchase Seagen for $229 per share in money. 

On Monday, the 2 firms submitted paperwork for his or her proposed merger to the Federal Trade Commission and the Department of Justice, kicking off a review period for the deal.

Investors are prone to monitor that high-stakes review closely, particularly in light of the lawsuit filed Tuesday by the FTC looking for to dam Amgen‘s proposed $27.8 billion acquisition of Horizon Therapeutics.

The Seagen deal is predicted to strengthen Pfizer’s portfolio of cancer drugs by bringing a category of antibody-drug conjugates, medicines which are designed to directly kill cancer cells and spare healthy ones.

Seagen has 4 approved cancer therapies, which raked in combined sales of nearly $2 billion in 2022. 

Pfizer has said it expects greater than $10 billion in “risk-adjusted” sales from Seagen in 2030.

That revenue could help offset an ongoing decline in sales of Pfizer’s Covid vaccine and antiviral pill Paxlovid because the world emerges from the pandemic, and relies less on those products.