Health/Life Sciences

Merck reportedly eyeing acquisition of Seattle biotech large Seagen

Rendering of Seagen’s new planned manufacturing facility north of Seattle. (Seagen Image)

Biopharma giant Merck is considering an acquisition of Seagen, the Seattle area’s biggest biotech company, according to a report in the Wall Street Journal Friday.

The Journal reported that “talks have been under way for a while, and a deal isn’t imminent.”

A spokesperson for Seagen declined to comment on the report.

From Seagen’s point of view, an acquisition “could make a world of sense,” according to William Canestaro, managing director at the Washington Research Foundation, who said the report took him by surprise.   

“Merck would bring process, systems, and proven expertise in bringing drugs to market,” Canestaro told GeekWire. “Additionally, with the current turmoil in leadership, an acquisition now seems especially timely.”

Longtime CEO Clay Siegall, who co-founded the company more than 24 years ago, resigned in May in the wake of allegations of domestic abuse, which he denies, and an incident at his home where he was arrested. Chief medical officer Roger Dansey is acting CEO.

Bothell, Wash.-based Seagen employs more than 2,800 people in the Seattle area, Canada, and Europe. Seagen’s stock value was up more than 11% on Friday at market close, bringing the company’s market value to more than $30 billion. Merck stock was down slightly.

Seagen pulled in $1.6 billion in revenue last year, and $426.5 million in the first quarter of 2022, compared to $332 million for year-ago period. The company has four oncology drugs on the market and pipeline of other candidates focused on antibody-drug conjugates (ADCs), which zero in on cells using an antibody and deliver a toxin to kill the cells.

Seagen and Merck inked a partnership in 2020 to develop and commercialize an ADC for breast and other solid tumors as a monotherapy and in combination with Merck’s Keytruda. Under that agreement, Merck made a $1 billion equity investment in Seagen and paid it $600 million up front.

Other companies are also “eyeing Seagen,” the Journal reported.

Siegall’s resignation came shortly after the company announced that it will build a 270,000 square foot manufacturing facility north of Seattle. The company has become a large biotech anchor tenant for the region, which suffered from the loss of Amgen in 2016, years after its acquisition of Immunex.

Seagen and Bristol Myers Squibb are the Seattle area’s largest biopharma employers.

“Seagen has been an immensely important part of our local biotech ecosystem,” said Canestaro. “With any acquisition questions naturally come up about whether this will look more like an Immunex acquisition or a Juno acquisition.”

Bristol Myers Squibb acquired the pipeline of Juno Therapeutics through its acquisition of Celgene in 2018, and continues to grow in the region in part because of access to cell therapy expertise.

“Biologics and ADC expertise would be easier to find in other parts of the country so it may be unlikely that Seagen would maintain the same local footprint if it were acquired,” added Canestaro. “But COVID fundamentally changed how Seagen operates; much of their staff is now fully remote or hybrid. Location just may not matter as much these days.”

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