A Pfizer logo is displayed on a monitor on the floor of the New York Stock Exchange on July 29, 2019.
Brendan McDermid | Reuters
Pfizer plans to raise $31 billion through a debt offer to fund its proposed acquisition of the cancer drug maker SeenIt would be the largest acquisition since 2009, according to a new filing with the Securities and Exchange Commission.
Pfizer expects to close its $43 billion acquisition of Seagen later this year or early 2024.
The bond offering is expected to close on Friday, according to a prospectus supplement that New York-based Pfizer filed with the SEC late Tuesday.
The pharma giant’s debt offering would be its biggest since CVS health sold $40 billion in bonds in 2018 to fund its acquisition of health insurer Aetna.
Pfizer’s move comes as other companies, including Apple, T Mobile And Merck They rush to tap the US bond market ahead of a possible rise in borrowing costs triggered by the debt ceiling standoff.
Pfizer’s share price fell slightly on Wednesday.
The company said it will secure funding for the Bothell, Wash.-based Seagen purchase through eight tranches of notes maturing between 2025 and 2063.
Each tranche is valued at $3 billion to $6 billion.
The yield to maturity of the 10-year Pfizer bond would be 4.75%, which would be around 125 basis points higher than that 10-year US government bonds Note.
Signage outside Seagen’s headquarters in Bothell, Wash. on Tuesday, March 14, 2023.
David Ryder | Bloomberg | Getty Images
Bank of America, Citigroup, Goldman Sachs And JPMorgan Chase manage the debt sale.
Pfizer agreed in March to buy Seagen for $229 per share in cash.
On Monday, the two companies filed documentation for their proposed merger with the Federal Trade Commission and the Department of Justice, beginning a review phase of the deal.
Investors are likely to be watching this high-risk scrutiny closely, especially in light of Tuesday’s lawsuit seeking a lockdown from the FTC amgen‘s proposed $27.8 billion acquisition Horizon Therapeutics.
The Seagen deal is expected to strengthen Pfizer’s cancer drug portfolio by introducing a class of antibody-drug conjugates, drugs designed to kill cancer cells directly and spare healthy cells.
Seagen has four approved cancer therapies that generated combined sales of nearly $2 billion in 2022.
Pfizer has said it expects “risk-adjusted” sales from Seagen to exceed $10 billion in 2030.
Those sales could help offset a continued decline in sales of Pfizer’s Covid vaccine and antiviral pill Paxlovid as the world emerges from the pandemic and becomes less reliant on those products.
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