Editor’s note: William Canestaro is managing director at Seattle venture capital firm WRF Capital and leads the biotechnology investment team.
Seagen’s sale to Pfizer would have seemed unthinkable a few years ago. The former CEO was rumored to be opposed to the idea of an acquisition. He worked to grow the Bothell, Wash.-based company to a size that was thought to be too big to acquire and grew Seagen via acquisition himself, acquiring Cascadian Therapeutics in 2018.
Seagen has a huge pipeline for early programs and is undisputedly the anchor tenant in Pacific Northwest biotech. It is one of the very few Seattle biotechs that grew to global scale while remaining independent.
As we look to the pending acquisition, set to clear this week after regulatory approval, I will be keeping my eyes on a few key points.
What Pfizer keeps in the PNW
With every acquisition there’s a push to find efficiency. What have we gotten so good at here in Seattle that can’t be moved or consolidated? Many believe that our resident expertise in antibody drug conjugates (ADCs) makes it unlikely that Pfizer can pull Seagen and its expertise back to the East Coast. This is especially given Pfizer’s previous stumblings to evolve their own ADCs; it seems most likely that they’ll trust Seagen to continue doing what it has shown it can do.
COVID also fundamentally changed how much of biotech works: Seagen already employs people across the U.S. with two main offices in Bothell and South San Francisco. This company already functions well across time zones. I’d expect that Pfizer will want to take a cautious approach to any major changes to the current Seagen workflow, and would be surprised if there were immediate mandates to proceed employees.
As Pfizer CEO Albert Bourla said about the acquisition “We are not buying the golden eggs. We are acquiring the goose that is laying the golden eggs.”
Positive signs for the market
With a historically tough market, a $43 billion acquisition is a great reminder to investors that biotech can be a great place to invest if the fundamentals of the business are strong. People have been hypothesizing for the past few years that pharma would be making acquisitions due to strong cash balances and many products coming off patent. I am hopeful that this is just the first of many acquisitions.
More early stage investors
Seagen is famous for how long it keeps employees. There are hundreds of employees with over a decade at the company. This means that there are likely many folks who will do quite well from this acquisition. Many in the community are hopeful that some of them will become active angel investors and maintain the next generation of great companies here in the Pacific Northwest. If you’re reading this and in this category, please accomplish out. I’ve got some ideas for you!
Pfizer might help streamline Seagen’s growth
Seagen grew to be a mid-sized biotech rapidly. With so many emerging programs and stakeholders in such a short timespan, scaling infrastructure to match can be difficult. It will be interesting to see if Pfizer can furnish some “big company structure” to Seagen without crushing the dynamic and nimble approach that made Seagen so special in the first place.
