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Merck potential purchase of Seagen likely back in focus after Daiichi arbitration loss

Headquarters of Merck & Co. in Silicon Valley

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Merck & Co (NYSE:MRK) potential $40 billion acquisition of Seagen (NASDAQ:SGEN) is likely to be back in focus after the cancer drug maker’s arbitration with Japanese pharmaceutical company Daiichi Sankyo (OTCPK:DSKYF).

While Seagen (SGEN) initially down 2.2% In the arbitration news on Friday, Seagen shares rallied and 2% gained in after-hours trading.

A WSJ report last month suggested that Merck’s (MRK) potential purchase of Seagen (SGEN) for around $200 per share could be increased as a result of the Daiichi arbitration and a data readout for Seagen’s (SGEN) bladder cancer therapy. Padcev delayed. The WSJ originally reported last month that a potential mega deal was expected by or before Merck’s July 28 earnings announcement.

Morgan Stanley said in a note last month that if Seagen (SGEN) wins its arbitration with Daiichi, it could represent an equity value of $12 to $24 for SGEN. Seagen shares could actually fall ~5-10% in an arbitration and 0-10% in an arbitration loss, Morgan Stanley predicted at the time.

The announcement of the loss in the Daiichi arbitration comes after Seagen (SGEN) published promising data on Padcev in combination with Merck’s (MRK) Keytruda (pembrolizumab) in some patients with a bladder cancer subtype in late July. Seagen (SGEN) stock. increased by 2.7% on July 26 according to the Padcev news.

HC Wainwright analyst Andrew Fein, who has given Seagen (SGEN) a buy rating, raised his target price to $200 from $170 on July 27 following the release of Padcev data.

“From a macro standpoint, we believe this adds overall luster to the possibility of an acquisition, as both companies at least have the full data set that could be further used to advance a potential transaction,” Fein wrote.

Wells Fargo said in a note in late June that Seagen (SGEN) could see as much as $250 per share in a potential sale to Merck (MRK), though a deal is more in the $200 to $220 per share range should.

https://seekingalpha.com/news/3872628-merck-potential-purchase-of-seagen-likely-back-in-focus-after-daiichi-arbitration-loss?utm_source=feed_news_all&utm_medium=referral Merck potential purchase of Seagen likely back in focus after Daiichi arbitration loss

Russell Falcon

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