Merck nears Seagen takeover: ‘question is how does FTC look at this?’

Shares of Seagen Inc (NASDAQ: SGEN) are up 3.0% this morning on a report that Merck & Co Inc (NYSE: MRK) is in advanced talks to buy the cancer drug specialist for at least $40 billion.

Dr Gottlieb reacts to the news

According to the Wall Street Journal, the pharma giant is willing to pay over $200 a share for Seagen – a more than 10% premium on its current stock price.

Reacting to the news this morning on CNBC’s “Squawk Box”, former FDA commissioner, Dr Scott Gottlieb said the deal, if announced, was likely to face antitrust scrutiny.

Merck is in the red on Thursday.

What’s in it for Merck & Co?

Merck might be looking at the biotech firm as a potential source of revenue that replaces Keytruda (cancer treatment) once its patent exclusivity expires in 2028. As per Narumi Nakagiri – Analyst at Daiwa Capital Markets:

Keytruda brought in $4.8 billion in the latest reported quarter; a 23% YoY increase that helped Merck report better-than-expected earnings for its fiscal Q1 and give upbeat full-year guidance.