Fusion Pharmaceuticals, a clinical-stage oncology company developing next-gen radioconjugates (RCs) as precision medicines, announced it entered into a deal to be acquired by AstraZeneca. This deal marks a significant step forward for AstraZeneca in delivering on its ambition to transform cancer treatment and patient outcomes by replacing traditional regimens like chemotherapy and radiotherapy with more targeted treatments.
In recent years, RCs have emerged as a potential modality in cancer treatment. These medicines deliver a radioactive isotope directly to cancer cells via precise targeting using molecules like antibodies, peptides, or small molecules. This approach has many advantages compared to traditional radiotherapy, including minimizing damage to healthy cells and enabling access to inaccessible tumors through external beam radiation.
This deal complements AstraZeneca’s leading oncology portfolio with the addition of the Fusion pipeline of RCs, including the company’s most advanced program called FPI-2265, a potential new treatment for patients with metastatic castration-resistant prostate cancer (mCRPC). And FPI-2265 targets prostate-specific membrane antigen (PSMA), a protein highly expressed in mCRPC and currently in a Phase 2 trial.
This deal brings AstraZeneca new expertise and pioneering R&D, manufacturing, and supply chain capabilities in actinium-based RCs. It also strengthens the company’s presence in and commitment to Canada. Fusion will become a wholly owned subsidiary of AstraZeneca, with operations continuing in Canada and the US.
Under the terms of the deal, AstraZeneca (through a subsidiary) will acquire all of Fusion’s outstanding shares under a plan of arrangement for a price of $21 per share in cash at closing plus a non-transferable contingent value right (CVR) of $3 per share in cash payable upon the achievement of a specified regulatory milestone.
The upfront cash portion of the consideration is based on a deal value of about $2 billion – a 97% premium to Fusion’s closing market price of $10.64 on March 18, 2024, and an 85% premium to the 30-day volume-weighted average price (VWAP) of $11.37 before this deal announcement.
The upfront and maximum potential contingent value payments represent a deal value of about $2.4 billion. This is a 126% premium to Fusion’s closing market price on March 18, 2024, and a 111% premium to the 30-day VWAP.
AstraZeneca will acquire the cash, cash, equivalents, and short-term investments on Fusion’s balance sheet, totaling $234 million as of December 31, 2023.
Centerview Partners is Fusion’s exclusive financial advisor, and Goodwin Procter serves as legal counsel. And Osler, Hoskin & Harcourt serves as Canadian legal counsel.
KEY QUOTES:
“This acquisition combines Fusion’s expertise and capabilities in radioconjugates, including our industry-leading radiopharmaceutical R&D, pipeline, manufacturing and actinium-225 supply chain, with AstraZeneca’s leadership in small molecules and biologics engineering to develop novel radioconjugates. Expanding on our existing collaboration with AstraZeneca where we have advanced FPI-2068, an EGFR-cMET targeted radioconjugate into Phase I clinical trials, gives us a unique opportunity to accelerate the development of next-generation radioconjugates with the aim of transforming patient outcomes.”
– Fusion Chief Executive Officer John Valliant, Ph.D.
“Between thirty and fifty per cent of patients with cancer today receive radiotherapy at some point during treatment, and the acquisition of Fusion furthers our ambition to transform this aspect of care with next-generation radioconjugates. Together with Fusion, we have an opportunity to accelerate the development of FPI-2265 as a potential new treatment for prostate cancer, and to harness their innovative actinium-based platform to develop radioconjugates as foundational regimens.”
– Susan Galbraith, Executive Vice President, Oncology R&D, AstraZeneca
“Fusion has differentiated itself in the growing radioconjugate space by assembling an industry-leading team with deep expertise and infrastructure to support bringing these much-needed therapies to cancer patients. Together we look forward to building upon our work to impact the landscape of cancer therapy. Deepening our collaboration with AstraZeneca presents an exciting opportunity for the Fusion team.”
– Fusion President and Chief Business Officer Mohit Rawat
