Pfizer's Seagen Deal Should Help Offset Upcoming Patent Losses; No Fair Value Estimate Impact

Pfizer’s announced acquisition of Seagen doesn’t have a major impact on our fair value estimate or wide moat rating for the pharma giant. We continue to view Pfizer as undervalued, with the market not fully appreciating the firm’s ability to offset major patent losses over the next five years. While we don’t see the Seagen deal as creating value, we believe it will help the market get more comfortable with Pfizer working through major patent losses on several drugs, including cardiovascular drug Eliquis, oncology drug Ibrance, and rare-disease drug Vyndaqel between 2027 and 2028. We don’t see any major antitrust issues and expect the deal to close in late 2023 or early 2024, in line with management guidance.