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Raymond James has launched its coverage on Seagen (NASDAQ:SGEN) with an Outperform recommendation noting The Wall Street Journal’s report last week that Merck (MRK) was getting closer to a deal to acquire the cancer-focused biotech. The price target set to $220 per share implies a ~23% premium to the last close.
The analyst Dane Leone argues that Merck (MRK) could be a viable bidder given its long-standing partnership with the company, need to address Keytruda patent expiry, and its limited exposure to Seagen’s (SGEN) specialization in antibody-drug conjugates.
In addition, the firm assumes that Seagen (SGEN) board could be on the lookout for strategic alternatives following the departure of its longtime Chief Executive Clay Siegall last month.
However, Leone expects competition from other large biopharma companies due to the prospects of Seagen’s (SGEN) product portfolio, potential label expansions for bladder cancer therapy, PADCEV, and heightened interest for ADC programs after Destiny-Breast04 data.
Read: The late-stage Destiny-Breast04 trial for antibody-drug conjugate ENHERTU generated positive data in HER2 low metastatic breast cancer developers Daiichi Sankyo (OTCPK:DSKYF) (OTCPK:DSNKY) and AstraZeneca (AZN) announced early this year.
