AstraZeneca AZN announced a definitive agreement to acquire Fusion Pharmaceuticals FUSN, which will add next-generation radioconjugates, a promising modality in cancer treatment, to its cancer pipeline.

AstraZeneca has offered to acquire Fusion, a Canadian company, for a price of $21.00 per share in cash, which represents a premium of 97% to the latter's closing price of $10.64 on Monday, Mar 18. In addition, AstraZeneca will be entitled to make a non-transferable contingent value (CV) payment of $3.00 per share in cash on achievement of a specified regulatory milestone. The upfront cash and CV payment add up to a total transaction value of approximately $2.4 billion. 

Fusion makes next-generation radiopharmaceuticals that deliver a radioactive isotope directly to cancer cells through precise targeting using molecules such as antibodies, peptides or small molecules. It has a diversified pipeline of targeted alpha therapy (TAT) programs. These targeted treatments minimize damage to nearby healthy cells and are being seen as potential replacements for traditional regimens like chemotherapy and radiotherapy for treating cancer. 

Fusion already has a collaboration with AstraZeneca to jointly develop novel TATs and combination programs between Fusion's TATs and AstraZeneca's DNA Damage Response Inhibitors (DDRis) and immuno-oncology agents.

Fusion's key clinical-stage pipeline candidate is FPI-2265, a small molecule-based TAT targeting prostate-specific membrane antigen, in phase II studies for the treatment of metastatic castration-resistant prostate cancer (mCRPC).

Preliminary data from approximately 20 to 30 patients from the phase II study (TATCIST) on FPI-2265 are expected to be released in April 2024. Target enrollment has been achieved in the study. A phase III registrational study is expected to begin in 2025. Fusion expects to initiate a combination study of FPI-2265 plus Merck MRK/AstraZeneca's Lynparza (olaparib) in earlier lines of mCRPC treatment in the first half of 2024.

In the past year, AstraZeneca's stock has declined 1.4% against the industry's 30.5% rise.

Image Source: Zacks Investment Research

Fusion is also jointly developing FPI-2068, its novel TAT candidate, which targets solid tumors expressing EGFR-cMET with AstraZeneca under the companies' multi-asset collaboration agreement. Pre-clinical data on the candidate demonstrated strong anti-tumor activity and confirmatory evidence of FPI-2068's mechanism of action. In April 2023, Fusion received FDA clearance to begin clinical development of FPI-2068.