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AstraZeneca buys into radiopharmaceuticals with $2.4B deal for Fusion Pharma

AstraZeneca is the latest large pharmaceutical company to make a sizable bet on radiopharmaceutical drugs for cancer, agreeing on Tuesday to acquire longtime biotechnology partner Fusion Pharmaceuticals in a deal worth up to $2.4 billion.

AstraZeneca will acquire all of Fusion’s shares for $21 apiece, or about $2 billion. The British drugmaker could add another $3 per share via a financial instrument known as a “contingent value right” if Fusion meets an unspecified regulatory milestone. Should Fusion hit that mark, the buyout would be worth $2.4 billion. 

AstraZeneca is paying a 97% premium for Fusion’s shares, which ended trading on Monday at $10.64 apiece. 

The deal is the 11th biopharmaceutical buyout in 2024, adding to the sector’s fastest M&A start in at least six years, according to BioPharma Dive data. It’s also the third recent large transaction involving a maker of radiopharmaceuticals, following Eli Lilly’s $1.4 billion deal for Point Biopharma in October and Bristol Myers Squibb’s $4.1 billion takeout of RayzeBio in December. 

Radiopharmaceuticals are complex medicines that deliver a targeted dose of radiation directly to a tumor. Though the field has been on the industry’s radar for decades, technological advances and the success of Novartis’ prostate cancer drug Pluvicto has led to a surge in investments. Many drugmakers see radiopharmaceuticals as supplanting radiation therapy, a blunt force that’s been around for more than a century. 

“Between 30 and 50% 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,” said Susan Galbraith, AstraZeneca’s executive vice president of oncology research, in a statement. 

At least a dozen biotechnology startups, a handful of publicly traded companies and now multiple large drugmakers are developing radiopharmaceuticals. Some are going after the same targets as Pluvicto and another Novartis therapy, Lutathera, but with different drug components. Others are pursuing different cancer-associated proteins. 

Fusion, which has been working with AstraZeneca since 2020, is among those chasing Pluvicto. Its lead drug is being developed for a form of metastatic prostate cancer and is currently in Phase 2 testing. Fusion’s drug delivers a different radioactive isotope to tumors than Pluvicto, a characteristic AstraZeneca said may make for “more potent cancer killing and targeted delivery.” A pivotal study is expected to begin in the second quarter. 

The drug “holds the promise of being a next-generation version” of Pluvicto,” wrote Leerink Partners analyst Faisal Khurshid, in a Tuesday note to investors. A pivotal study should begin in the second quarter.  

Through their existing partnership, the two companies also have a different radiopharmaceutical in Phase 1 testing for certain solid tumors. Fusion has two other candidates in early-stage trials as well. 

The deal also gives AstraZeneca the capabilities to manufacture radiopharmaceuticals and supply the radioactive materials. Both are critical, given the drugs are tricky to produce at scale and supplies are limited.

“We believe the acquisition recognizes the value of Fusion’s lead program as well as strategic
control over isotope supply and manufacturing,” Khurshid wrote, adding that the “depth of resources” offered by a large pharmaceutical company like AstraZeneca should “help with the execution” of the coming late-stage trial.