AstraZeneca acquires Fusion Pharmaceuticals for cutting-edge cancer treatments
British pharmaceutical giant AstraZeneca Plc has announced its agreement to acquire Fusion Pharmaceuticals Inc., a Canadian biotechnology firm specializing in precision cancer drugs, for up to US$2.4bn.
This marks a significant move in the industry, with AstraZeneca set to pay US$21 per share in cash, totaling US$2bn, a figure nearly double Fusion's closing price on the Nasdaq before the announcement.
An additional US$400m will be payable to Fusion shareholders upon achieving a particular regulatory milestone, equating to US$3 per share.
AstraZeneca described the acquisition of Fusion Pharmaceuticals as a "major step forward." The Move aims to enhance the development of targeted cancer treatments, moving away from traditional methods like chemotherapy and radiotherapy.
AstraZeneca plans to maintain Fusion as a wholly-owned subsidiary, continuing operations in Canada and the US.
This deal highlights a victory for the Canada Pension Plan Investment Board (CPP), which invested US$20m in Fusion and stands to see a significant return.
It also represents the latest in a series of high-value takeovers within the Canadian biotech sector and the broader field of radioconjugates—an area showing promise in cancer treatment by targeting tumor cells with nuclear isotopes while sparing healthy cells.
Fusion's lead drug, a “smartbomb for cancer,” as CEO John Valliant describes it, targets prostate cancer cells with radioactive alpha isotopes and has shown promising results in shrinking tumors in mice.
This field has seen increasing interest from major pharmaceutical companies, as evidenced by recent acquisitions by Eli Lilly & Co. and Bristol-Myers Squibb Co., among others.
Fusion Pharmaceuticals, spun out from McMaster University's Centre for Probe Development and Commercialization in 2017, benefits from significant infrastructure, including a cyclotron and a nuclear reactor, allowing for a vertically integrated approach to developing radiopharmaceuticals.
Despite a challenging start in the stock market following its 2020 public debut, Fusion's stock began to rise sharply last fall, propelled by deal activity in the sector and anticipation of forthcoming efficacy data.
The deal, expected to close by the end of June, requires the approval of two-thirds of Fusion shareholders and is subject to a court-approved plan of arrangement under the Canada Business Corporations Act.
