AstraZeneca's $2.4B Fusion Pharmaceuticals' Acquisition Signals Shift In Efforts From Traditional Regimens For More Targeted Cancer Treatments

Tuesday, AstraZeneca Plc AZN agreed to acquire Fusion Pharmaceuticals Inc FUSN for $21.00 per share in cash plus a non-transferable contingent value right (CVR) of $3.00 per share in cash payable upon the achievement of a specified regulatory milestone.

The upfront cash portion of the consideration represents a transaction value of approximately $2 billion, a 97% premium to Fusion’s closing market price of $10.64 on March 18, 2024.

Related Content: Recent M&A Bodes Well For Targeted Cancer Therapy Player Fusion Pharmaceuticals, Analyst Says AstraZeneca Is Favorably Positioned.

Combined, the upfront and maximum potential contingent value payments represent, if achieved, a transaction value of approximately $2.4 billion. 

AstraZeneca will acquire the cash, cash equivalents, and short-term investments on Fusion’s balance sheet, totaling $234 million as of December 31, 2023.

The acquisition 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.

Radioconjugates (RCs) have emerged as a promising modality in cancer treatment over recent years. 

These medicines deliver a radioactive isotope directly to cancer cells through precise targeting using molecules such as antibodies, peptides, or small molecules. 

This approach has many potential advantages compared to traditional radiotherapy, including minimizing damage to healthy cells and enabling access to inaccessible tumors through external beam radiation.

This acquisition complements AstraZeneca’s oncology portfolio by adding the Fusion pipeline of RCs, including the company’s most advanced program, FPI-2265, a potential new treatment for patients with metastatic castration-resistant prostate cancer (mCRPC). 

FPI-2265 targets prostate-specific membrane antigen (PSMA), a protein highly expressed in mCRPC, and is currently in a Phase 2 trial.

Most recently, Bristol Myers Squibb & Co BMY acquired RayzeBio Inc RYZB for $62.50 per share in cash, for a total equity value of approximately $4.1 billion, or $3.6 billion net of estimated cash acquired. 

Also, last year, Eli Lilly And Co LLY completed the acquisition of POINT Biopharma Global Inc. for $12.50 per share in cash, an aggregate of approximately $1.4 billion.

Price Action: FUSN shares are up 98.5% at $21.12 during the premarket session on the last check Tuesday.

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