By Senad Karaahmetovic
Merck & Co . (NYSE:MRK) is close to agreeing to buy the biotechnology company Seagen (NASDAQ:SGEN) in a deal that can be worth about $40 billion, according to a report in the Wall Street Journal.
The ongoing talks suggest that Merck could pay more than $200 per share to acquire Seagen and the two companies are looking to close the deal prior to Merck’s quarterly earnings report, scheduled for July 28.
Shares of Seagen are up nearly 3% in pre-market Thursday while Merck stock price is down 1%.
Even though Merck and Seagen are currently in advanced talks, there are no guarantees the two companies will close a deal, the WSJ report added.
The move comes as Merck seeks to expand its cancer drug offerings. Merck is well known for its immunotherapy medicine Keytruda, used for treating lung cancer, melanoma, head and neck cancer, and stomach cancer, among others. Keytruda was Merck’s best-selling product with $17.2 billion in sales in 2021.
Acquiring Seagen would also help Merck weather the blow the pharmaceutical company is expected to face when Keytruda loses patent protection, which analysts estimate will happen at the end of the decade. According to analysts at Cowen & Co, the immunotherapy drug could represent as much as 40% of the company’s sales in 2027.