Fusion Pharmaceuticals Inc. (Nasdaq: FUSN), a clinical-stage oncology company focused on developing next-generation radioconjugates (RCs) as precision medicines, today announced the Company has entered into a definitive agreement to be acquired by AstraZeneca. The acquisition marks a major step forward in AstraZeneca delivering on its ambition to transform cancer treatment and outcomes for patients by replacing traditional regimens like chemotherapy and radiotherapy with more targeted treatments.
RCs have emerged as a promising modality in cancer treatment over recent years. These medicines deliver a radioactive isotope directly to cancer cells through precise targeting using molecules such as antibodies, peptides or small molecules. This approach has many potential advantages compared to traditional radiotherapy, including minimizing damage to healthy cells and enabling access to tumors not reachable through external beam radiation.
This acquisition complements AstraZeneca’s leading oncology portfolio with the addition of the Fusion pipeline of RCs, including the Company’s most advanced program, FPI-2265, a potential new treatment for patients with metastatic castration-resistant prostate cancer (mCRPC). FPI-2265 targets prostate-specific membrane antigen (PSMA), a protein that is highly expressed in mCRPC, and is currently in a Phase 2 trial.
The acquisition brings new expertise and pioneering R&D, manufacturing and supply chain capabilities in actinium-based RCs to AstraZeneca. It also strengthens their presence in and commitment to Canada.
Fusion Chief Executive Officer John Valliant, Ph.D., said: “This acquisition combines Fusion’s expertise and capabilities in radioconjugates, including our industry-leading radiopharmaceutical R&D, pipeline, manufacturing and actinium-225 supply chain, with AstraZeneca’s leadership in small molecules and biologics engineering to develop novel radioconjugates. Expanding on our existing collaboration with AstraZeneca where we have advanced FPI-2068, an EGFR-cMET targeted radioconjugate into Phase I clinical trials, gives us a unique opportunity to accelerate the development of next-generation radioconjugates with the aim of transforming patient outcomes.”
Susan Galbraith, Executive Vice President, Oncology R&D, AstraZeneca, said: “Between thirty and fifty 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. Together with Fusion, we have an opportunity to accelerate the development of FPI-2265 as a potential new treatment for prostate cancer, and to harness their innovative actinium-based platform to develop radioconjugates as foundational regimens.”
Fusion President and Chief Business Officer Mohit Rawat, said: “Fusion has differentiated itself in the growing radioconjugate space by assembling an industry-leading team with deep expertise and infrastructure to support bringing these much-needed therapies to cancer patients. Together we look forward to building upon our work to impact the landscape of cancer therapy. Deepening our collaboration with AstraZeneca presents an exciting opportunity for the Fusion team.”
Fusion will become a wholly owned subsidiary of AstraZeneca, with operations continuing in Canada and the US.
Financial Considerations
Under the terms of the definitive agreement, AstraZeneca, through a subsidiary, will acquire all of Fusion’s outstanding shares pursuant to a plan of arrangement for a price of $21.00 per share in cash at closing plus a non-transferable contingent value right (CVR) of $3.00 per share in cash payable upon the achievement of a specified regulatory milestone.
The upfront cash portion of the consideration represents a transaction value of approximately $2 billion, a 97% premium to Fusion’s closing market price of $10.64 on March 18, 2024, and an 85% premium to the 30-day volume-weighted average price (VWAP) of $11.37 before this announcement. Combined, the upfront and maximum potential contingent value payments represent, if achieved, a transaction value of approximately $2.4 billion, a 126% premium to Fusion’s closing market price on March 18, 2024, and a 111% premium to the 30-day VWAP. As part of the transaction, AstraZeneca will acquire the cash, cash equivalents and short-term investments on Fusion’s balance sheet, which totaled $234 million as of December 31, 2023.
The proposed acquisition of Fusion is to be completed by way of a statutory plan of arrangement under the Canada Business Corporations Act and subject to customary closing conditions, including approval of (i) 66⅔% of the votes cast by Fusion shareholders and (ii) a simple majority of the votes cast by Fusion shareholders (excluding certain persons required to be excluded in accordance with Multilateral Instrument 61-101 of the Canadian Securities Administrators), in each case, at a special meeting of Fusion shareholders. The transaction is expected to close in the second quarter of 2024, subject to customary closing conditions, including the approval of Fusion shareholders and regulatory clearances, as noted above.
Centerview Partners LLC is serving as exclusive financial advisor to Fusion and Goodwin Procter LLP is serving as legal counsel, with Osler, Hoskin & Harcourt LLP serving as Canadian legal counsel.
Radioconjugates in oncology
RCs combine the precise targeting of antibodies, small molecules or peptides with potent medical radioisotopes to deliver radiation directly to cancer cells. By seeking out cancer cells, RCs provide a more precise mechanism of cancer cell killing compared with traditional radiation therapy, with the goal of improving efficacy while minimizing toxicity on healthy cells. RCs are administered via systemic delivery, which enables their use in tumor types not accessible to external beam radiation and the targeting of cancer cells that have spread from the main tumor to other sites in the body.
About FPI-2265
FPI-2265 is an actinium-225 based PSMA targeting RC, for mCRPC, currently in a Phase II trial. Actinium-225 emits alpha particles and holds the promise of being a next-generation radioisotope in cancer treatment. By delivering a greater radiation dose over a shorter distance, alpha particles such as actinium-225 have the potential for more potent cancer cell killing, and targeted delivery, thereby minimizing damage to surrounding healthy tissue.
About Fusion
Fusion Pharmaceuticals is a clinical-stage oncology company focused on developing next-generation RCs. Fusion connects alpha particle emitting isotopes to various targeting molecules in order to selectively deliver the alpha emitting payloads to tumors. Fusion’s clinical-stage development portfolio includes lead program, FPI-2265, targeting PSMA for mCRPC and novel RCs targeting solid tumors.
