AstraZeneca bolsters cancer arsenal with $2.4 billion Fusion buy

AstraZeneca buys Fusion Pharmaceuticals to target cancer with next-gen radiotherapies.

AstraZeneca bolsters cancer arsenal with $2.4 billion Fusion buy
AstraZeneca AZN

AstraZeneca (LSE: AZN) has taken a significant step towards revamping cancer treatment with a $2.4 billion acquisition of Fusion Pharmaceuticals^, a leader in next-generation radioconjugate therapies.

This strategic move reinforces AstraZeneca's commitment to offering patients more targeted therapies compared to traditional methods like chemotherapy and radiotherapy.

Fusion Pharmaceuticals is developing radioconjugates, drugs that deliver radioactive isotopes directly to cancer cells. Their lead product, FPI-2265, targets a protein highly expressed in aggressive prostate cancer and is currently undergoing phase 2 clinical trials.

AstraZeneca will acquire all of Fusion's shares for a premium, including an upfront cash payment of $21.00 per share, valuing the deal at $2 billion – a 97% premium over Fusion's closing share price. There's also a potential contingent value right of $3.00 per share tied to a regulatory milestone, bringing the total deal value to a maximum of $2.4 billion.

Fusion's shares spiked 95% in pre-market trading on the news. The acquisition, subject to standard approvals, is expected to close in the second quarter of 2024. Upon completion, Fusion will become a wholly-owned subsidiary of AstraZeneca, continuing operations in Canada and the US.

AstraZeneca's oncology chief Susan Galbraith sees the acquisition of Fusion as a transformative opportunity in radioconjugate therapy. She believes the collaboration will expedite the development of FPI-2265 for prostate cancer and leverage Fusion's platform for new cancer therapies.

While Fusion's stock surged, AstraZeneca's shares dipped slightly in Tuesday morning trade in London.

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