The way clears for 2022's biggest acquisition (so far)

If Merck & Co buys Seagen – which, after Friday’s legal verdict, looks more likely than before – the move would rank as the biggest takeover of the year so far. And a Seagen takeover, widely rumoured in recent weeks, is thought likely by investors. That much is clear given that Seagen stock was virtually unmoved on Friday’s news that an arbitration had ruled against the company, and in favour of Daiichi Sankyo, in a dispute over rights to antibody-drug technology that lies behind Enhertu and related projects. Seagen had earlier prevailed in a jury trial over the key patent involved, and the sellside had generally been expecting a similar result in the more important arbitration process. As such, the markets are shrugging off Seagen’s loss of a potentially large royalty line, and instead seeing this as a clearing event that gives Merck more certainty over valuation. As the biotech bear market shows signs of bottoming out M&A is back on the agenda, with Pfizer and Amgen’s recent moves on Global Blood and Chemocentryx respectively, for instance. A Seagen takeover would maintain this momentum, even if the target’s valuation is not, after all, as high as once hoped for.