Seattle Genetics, Inc. (NASDAQ:SGEN) recently announced that it will be signing a merger agreement of $614 million with Cascadian Therapeutics, Inc. (NASDAQ:CASC). Seattle is basically aiming to increase its oncology pipeline by acquiring the Seattle-based company for $10/share in cash. Cascadian Therapeutics already is running an advanced program with the drug called tucatinib currently under clinical trial for treating breast cancer.
According to the CEO of Bothell-based Seattle Genetics CEO, Clay Siegall, the acquisition will give his company a potentially best-in-class, orally available drug for treating cancer. The company is known for making Adcetris, a market drug used for treating Hodgkin lymphoma.
In a statement, Siegall stated that Tucatinib from Cascadian Therapeutics would complement Seattle’s existing pipeline of targeted cancer therapies, provide a third late-stage opportunity for a commercial product in solid tumors and expand the company’s efforts in breast cancer. He further said this acquisition will leverage company’s expertise and resources to advance and expand the tucatinib program for patients.
Deal Affects Stock Of Cascadian And Seattle Genetics
The acquisition deal had a major effect on the stock of both the companies. The stock for Cascadian Therapeutics jumped from $5.90 to $10.06 whereas the stock of Seattle Genetics dropped $55.21 to $52.30 showing a share or a loss of 5.27 percent.
The CEO of Cascadian Therapeutics Scott D. Myers said that this deal is a positive outcome for patients, Cascadian Therapeutics stockholders, and company’s employees. According to Myers, his company possesses the development and commercial capabilities along with the resources that are essential to fully realize the capability of drug tucatinib as one of the latest and novel best-in-class treatment option for treating metastatic breast cancer, colorectal cancer and potentially for other indications.
Seattle Genetics resourced the finances of $400 million from Barclays PLC (ADR) (NYSE:BCS) and JPMorgan Chase & Co. (NYSE:JPM) to make this acquisition possible. It seems that the company is on a buying spree as last summer it spent $43.3 million to purchase a pharmaceutical manufacturing plant in Bothell. Almost a year ago, the company terminated a deal to purchase Immunomedics, Inc. (NASDAQ:IMMU), a New Jersey-based biotech firm at $2 billion.