AstraZeneca agrees to acquire biotech group Fusion for up to $2.4bn

AstraZeneca will buy Fusion Pharmaceuticals in a $2.4billion deal to help bolster its oncology portfolio.

Britain’s largest drugmaker intends to spend $2billion upfront for the Canadian firm, equivalent to $21 per share, followed by up to $400million in potential contingent payments.

The deal’s maximum possible value represents a 126 per cent premium to Fusion’s closing share price on Monday, or 97 per cent when just counting the upfront cash amount.

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Headquartered in Hamilton, Ontario, Fusion is developing radioconjugate medicines, which many hope will replace traditional radiotherapy and chemotherapy as cancer treatments.

Radioconjugates work by directly delivering radioactive isotopes to cancer cells via molecules such as peptides, antibodies and small molecules.

AstraZeneca said such treatments reduce the damage to healthy cells and allow access to tumours that cannot be reached with external beam radiation, a common therapy used in fighting cancers.

‘Between 30 and 50 per cent 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, executive vice president of Oncology R&D at AstraZeneca.

The transaction comes less than a week after AstraZeneca agreed to acquire Amolyt Pharma, a clinical-stage biotech group specialising in treatments for rare endocrine diseases, in an £820million deal.

And last month, AstraZeneca completed the takeovers of Chinese cancer therapy firm Gracell and vaccine developer Icosovax.

The group made more than $17billion last year alone from oncology treatments, equivalent to over a third of all its sales.

Its highest-sold medicines include lung cancer drugs Tagrisso and Imfinzi, ovarian cancer treatment Lynparza, and Calquence, which is given to patients who have non-Hodgkin lymphoma.

Fusion’s current pipeline includes one drug in a Phase II trial that could be a likely treatment for advanced prostate cancer.

John Valliant, chief executive of Fusion, said the deal ‘combines Fusion’s expertise and capabilities…with AstraZeneca’s leadership in small molecules and biologics engineering to develop novel radioconjugates.’

AstraZeneca shares were 1.2 per cent lower at £101.70 on Tuesday morning.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the share price’s dip reflected the Fusion takeover being ‘a relatively small deal and that future revenues may be still some way off, if they arrive at all.

‘But AstraZeneca is very much at the forefront of new ways to treat cancer and is not afraid to make multiple bets on potential first-in-class candidates.’