Fusion (FUSN) Up 99% on $2.4B Buyout Offer From AstraZeneca
Fusion Pharmaceuticals FUSN signed a definitive agreement with AstraZeneca AZN. Per the agreement terms, the pharma giant will acquire all outstanding shares of Fusion for $21 per share in cash, aggregating to $2.0 billion.
Existing Fusion shareholders will also receive one non-tradeable contingent value right (CVR) per share, entitling the holder to receive an additional $3 per share tied to a regulatory milestone. Combining the upfront and maximum potential contingent value payments, the existing shareholders are eligible to receive up to $2.4 billion in aggregate.
A clinical-stage oncology company, Fusion makes next-generation radiopharmaceuticals as precision medicines. It has a diversified pipeline of targeted alpha therapy (TAT) programs.
This acquisition deal is an extension of an agreement entered between the companies in 2020 to develop and market novel radiopharma therapies targeting cancer indications. Based on this agreement, AstraZeneca and Fusion are developing a novel TAT candidate, FPI-2068, in a phase I study that targets solid tumors expressing EGFR-cMET.
The acquisition will also include Fusion’s lead asset, FPI-2265, designed to target the prostate-specific membrane antigen (PSMA) expressed in prostate cancer cells. The candidate is being evaluated in a phase II study in patients with metastatic castration-resistant prostate cancer (mCRPC).
Apart from FPI-2265, FUSN is also evaluating other investigational therapies in separate early-stage studies targeting solid tumors. FPI-1434 is designed to target tumors expressing IGF-1R,while FPI-2059 will target those expressing NTSR1.
The transaction, expected to be completed in the second quarter of 2024, is subject to customary closing conditions and clearance from regulatory authorities. Fusion’s and AstraZeneca’s board of directors have already approved this transaction.
Following this news announcement, Fusion’s shares surged 99.1% on Mar 19. Year to date, the stock has skyrocketed 120.4% against the industry’s 2.9% fall.
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Fusion lacks a steady revenue stream due to a lack of approved drugs. The company is dependent on its pipeline candidates for growth. An acquisition by a big pharma giant like AstraZeneca, which has high reserves of cash flow and expertise in the oncology space, would enable FUSN to ramp up the development of its pipeline. Once the pipeline candidates are approved for marketing, Fusion will have access to AstraZeneca’s larger and well-established commercial supply chain and network distribution.
AstraZeneca expects the acquisition to diversify its oncology portfolio, giving it a foothold in the radiopharmaceutical drugs market. The deal is expected to add to AstraZeneca’s capabilities to manufacture radiopharmaceuticals and supply the radioactive materials.
The above transaction is one of the few deals that follows a series of recent high-profile acquisitions unfolding in the radiopharma space by pharma giants Eli Lilly LLY and Bristol Myers BMY. Last year, Eli Lilly and Bristol Myers made buyout offers for POINT Biopharma and RayzeBio. Both companies are rivals to Fusion Pharmaceuticals in the radiopharma space. While Lilly closed the buyout deal in December, the Bristol Myers deal was completed last month.
Fusion Pharmaceuticals Inc. Price
Fusion Pharmaceuticals Inc. price | Fusion Pharmaceuticals Inc. Quote
Zacks Rank
Fusion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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