AstraZeneca will buy Fusion Pharma for a price close to US$2.4 billion

AstraZeneca will buy Fusion Pharma for a price close to US$2.4 billion

AstraZeneca Plc has agreed to buy Fusion Pharmaceuticals Inc. for US$2.4 billion, at a time when European pharmaceutical companies continue their streak of agreements with promising biotechnology companies.

The British drugmaker said it will pay $21 per share for Fusion, or $2 billion in cash upfront. plus another US$400 million depending on the milestones achieved. The total amount equates to a 126% premium over Fusion's closing price on Monday.

Fusion is a clinical-stage biotechnology company that develops radioconjugates thatThey selectively deliver radioactive isotopes directly to cancer cells, minimizing damage to healthy cells. Astra believes that radioconjugates will help redefine cancer therapy around the world.

Following a change in orientation towards the development of vaccines against the Covid-19 virus during the pandemic, The Fusion deal marks the return of CEO Pascal Soriot to oncology. Smart past bets on cancer treatments have helped transform AstraZeneca's fortunes over the past decade.

The deal is also the latest in a series of bolt-sized deals for Astra, which earlier this month agreed to buy Amolyt Pharma, a French company focused on the development of treatments for rare endocrine diseases, for just over US$1 billion. In December, Astra closed a $1 billion deal for US vaccine company Icosavax, and also said it would acquire cell therapy company Gracell Biotechnologies.

Astra shares They hardly changed in the first operations on Tuesday in London. In the last 12 months they have dropped around 5%. Fusion shares soared 95% in premarket trading in the United States.

Cancer treatments generated about $17 billion last year for Astra and They represent more than a third of its total sales. However, product development can be very expensive in terms of research and marketing, “Astra is planning to grow through acquisitions to avoid a potential drag on profits from focusing exclusively on long-term internal drug development,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

New treatments

The Fusion purchase transaction indicates the importance that Astra places on these relatively new radioconjugate treatments, the first of which will only be approved in the US in 2018. Astra sees a growth opportunity, as between 30% and 50% of cancer patients receive radiotherapy at some point during treatment.

One of Fusion's Most Advanced Potential New Treatments Targets Metastatic Castration-Resistant Prostate Cancer and could be a better way to treat these patients, said Susan Galbraith, executive vice president of oncology R&D. In an interview.

Another key aspect is gaining access to Fusion's manufacturing and supply chain capabilities in radioconjugates. A fundamental challenge when producing these drugs is access to the radioactive metal actinium, and Fusion already has agreements with key suppliers as well as manufacturing capacity for these treatments, Galbraith said.

According to Morgan Stanley analyst Mark Purcell, it is expected that The global radiopharmaceutical market will grow from US$7 billion in 2022 to US$39 billion in 2032.

Astra's acquisition of Fusion is a “exciting step to expand its 'smart chemotherapy' platform for cancer treatment”he said, adding that Fusion has one of the strongest clinical pipelines in radioligand therapy.

Like Astra, other European pharmaceutical companies have also carried out a series of acquisitions in recent months in order to strengthen their product portfolio. These include the purchase of Aiolos Bio Inc by GSK Plc, that of Inhibrx Inc by Sanofi and that of MorphoSys AG by Novartis AG. Pharmaceutical companies are focusing on smaller, selective acquisitions than the mega-deals of previous years.