Merck potential purchase of Seagen said unlikely by earnings date - report

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Merck's (NYSE:MRK) potential $40 billion acquisition of Seagen (NASDAQ:SGEN) is not likely to happen ahead of the pharma co.'s earnings later this month, though talks still remain on track.

The WSJ reported earlier this month that Merck (MRK) was targeting completing an agreement to purchase the cancer biotech firm within a few weeks, though that plan has been delay, according to new WSJ reporting. Merck is scheduled to report Q2 results on July 28.

The delay is partly because of the need to wait for data expected from a study looking at one of Seagen's (SGEN) treatments for bladder-cancer patients called Padcev, according to the WSJ. There's also expected soon to be an outcome in royalty-payments case involving Seagen (SGEN) and Japanese drugmaker Daiichi Sankyo.

The WSJ report comes after Seagen ticked up 1.3% in Friday trading after the Patent Trial and Appeal Board upheld a patent in a dispute the company has with Daichi Sankyo (OTCPK:DSKYF), according to a PTAB ruling. The PTAB ruling followed Seagen winning a patent trial in Texas in April related to the same patent in dispute. Seagen was awarded $41.8 million in the patent dispute.

Morgan Stanley reiterated in a note on Monday said that it expects a decision in Seagen's arbitration with Daiichi will happen in mid-2022 and its base case is that Seagen (SGEN) will receive 5-10% royalties on Enhertu global sales. MS estimate this would represent ~$12-$24 in equity value/share to SGEN.

The WSJ reported last Wednesday that companies are in talks for a takeover consideration above $200 per share for Seagen (SGEN).