Seagen, Prometheus Biosciences fall amid news of FTC planned block of Horizon/Amgen deal
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Seagen (NASDAQ:SGEN), which agreed to be sold to Pfizer (NYSE:PFE) in a $43 billion deal in March, fell 6% amid reports that the Federal Trade Commission was set to challenge Amgen's (AMGN) $28 billion purchase of Horizon Therapeutics (HZNP).
Prometheus Biosciences (NASDAQ:RXDX), which agreed to sell itself to Merck (NYSE:MRK) for ~$11 billion last month, fell 1%. Investors are concerned that the FTC could look to block other recently announced deals.
"This development could put ongoing deals and future big deals in question - If this scrutiny is indeed related to stop bigger deals, we suspect it could make investors jittery around PFE-SGEN," Wells Fargo analyst Mohit Bansal wrote in a note on Tuesday. "MRK-RXDX is still a bolt on deal with zero revenues, so it might be ok. However, Big Biopharma may have challenge from now on while targeting mid-sized ($20-50B) deals."
The Seagen (SGEN) drop comes as Bloomberg reported on Tuesday that Pfizer (PFE) is in the high-grade market with a possible jumbo bond deal to fund the Seagen purchase. Pfizer is looking to sell notes in eight parts, a person familiar told Bloomberg.
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