19 March 2024
AstraZeneca to acquire Fusion to accelerate the
development of
next-generation radioconjugates to treat
cancer
Includes actinium-based clinical-stage
radioconjugate targeting PSMA for prostate cancer, pipeline of
radioconjugates and state-of-the-art R&D and manufacturing
facilities
AstraZeneca has entered into a definitive
agreement to acquire Fusion Pharmaceuticals Inc., a clinical-stage
biopharmaceutical company developing next-generation
radioconjugates (RCs). 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 minimising damage to healthy
cells and enabling access to tumours not reachable through external
beam radiation.
This acquisition complements AstraZeneca's
leading oncology portfolio with the addition of the Fusion pipeline
of RCs, including their most advanced programme, 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 II trial.
The acquisition brings new expertise and
pioneering R&D, manufacturing and supply chain capabilities in
actinium-based RCs to AstraZeneca. It also strengthens the
Company's presence in and commitment to Canada.
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."
John Valliant, Chief Executive Officer, Fusion,
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."
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 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 $2bn, a 97% premium to Fusion's
closing market price of $10.64 on 18th March 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 $2.4bn, a 126% premium to
Fusion's closing market price on 18th March 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 totalled $234m as of
31st December 2023.
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.
Notes
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 minimising toxicity on
healthy cells. RCs are administered via systemic delivery, which
enables their use in tumour types not accessible to external beam
radiation and the targeting of cancer cells that have spread from
the main tumour 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
minimising 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 to selectively
deliver the alpha emitting payloads to tumours. Fusion's clinical-stage development
portfolio includes lead programme, FPI-2265, targeting
PSMA for
mCRPC and novel RCs
targeting solid tumours.
AstraZeneca in oncology
AstraZeneca is leading a revolution in oncology
with the ambition to provide cures for cancer in every form,
following the science to understand cancer and all its complexities
to discover, develop and deliver life-changing medicines to
patients.
The Company's focus is on some of the most
challenging cancers. It is through persistent innovation that
AstraZeneca has built one of the most diverse portfolios and
pipelines in the industry, with the potential to catalyse changes
in the practice of medicine and transform the patient
experience.
AstraZeneca has the vision to redefine cancer
care and, one day, eliminate cancer as a cause of death.
Additional
information and where to find it
In connection with the proposed transaction,
Fusion intends to file a proxy circular with the Securities and
Exchange Commission (SEC). INVESTORS AND SECURITY HOLDERS ARE URGED
TO READ THE PROXY CIRCULAR IN ITS ENTIRETY IF AND WHEN IT BECOMES
AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION
WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE IN THE
PROXY CIRCULAR BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders will be able to
obtain free copies of the proxy statement and other relevant
documents, when such documents are filed with the SEC, on the SEC's
website at www.sec.gov. Copies of the documents filed with the SEC
by AstraZeneca may be obtained at no charge on the investor
relations page of AstraZeneca's internet website at
www.astrazeneca.com/investor-relations.html. Copies of the
documents filed with the SEC by Fusion may be obtained at no charge
under the "Investors & Media" section of Fusion's website
at https://ir.fusionpharma.com/sec-filings.
Participants
in the solicitation
This communication does not constitute an offer
to buy or sell or the solicitation of an offer to buy or sell any
securities or a solicitation of any vote or approval. This
communication is not a substitute for any circular Fusion may file
with the SEC in connection with the proposed
transaction.
AstraZeneca, its directors and certain of its
executive officers and other employees may, under the rules of the
SEC, be deemed to be participants in the solicitation of proxies in
connection with the proposed transaction. Information regarding
such persons, including a description of their respective direct or
indirect interests, by security holdings or otherwise, will be
included in the proxy statement when it is filed with the
SEC. Information about AstraZeneca's directors and executive
officers is also available in AstraZeneca's Form 20-F filed with
the SEC on 20th February 2024, and other documents
subsequently filed by AstraZeneca with the SEC. These documents
will be available free of charge from the sources indicated
above.
Fusion, its directors and certain of its executive
officers and other employees may, under the rules of the SEC, be
deemed to be participants in the solicitation of proxies in
connection with the proposed transaction. Information regarding
such persons, including a description of their respective direct or
indirect interests, by security holdings or otherwise, will be
included in the proxy statement when it is filed with the
SEC. Information about Fusion's directors and executive
officers is also available in Fusion's Form 10-K filed with the SEC
on 16th March 2023, Fusion's proxy statement for its
annual meeting of shareholders, which was filed with the SEC on
27th April 2023, and other documents subsequently filed
by Fusion with the SEC. These documents will be available free of
charge from the sources indicated above.
Forward-looking
statements
This document may include statements that are
not statements of historical fact, or "forward-looking statements,"
including with respect to the proposed acquisition of Fusion
by AstraZeneca. Such forward looking statements include, but
are not limited to, the ability of AstraZeneca and Fusion
to complete the transactions contemplated by the arrangement
agreement, including the parties' ability to satisfy the conditions
set forth in the arrangement agreement, statements about the
expected timetable for completing the transaction, AstraZeneca's
and Fusion's beliefs and expectations and statements
about the benefits sought to be achieved in AstraZeneca's proposed
acquisition of Fusion, the potential effects of the
acquisition on both AstraZeneca and Fusion, the
possibility of any termination of the arrangement agreement, as
well as the expected benefits and success of FPI 2265, and other
pipeline product or any combination product. These statements are
based upon the current beliefs and expectations of AstraZeneca's
and Fusion's management and are subject to significant
risks and uncertainties. There can be no guarantees that the
conditions to the closing of the proposed transaction will be
satisfied on the expected timetable or at all or that FPI-2265 will
receive the necessary regulatory approvals or prove to be
commercially successful if approved. If underlying assumptions
prove inaccurate or risks or uncertainties materialise, actual
results may differ materially from those set forth in the
forward-looking statements.
Risks and uncertainties include, but are not
limited to, uncertainties as to the timing of the proposed
transaction; uncertainties as to how many of Fusion's
shareholders will vote in favour of the proposed transaction; the
possibility that various conditions to the consummation of the
proposed transaction may not be satisfied or waived; the ability to
obtain necessary regulatory approvals or to obtain them on
acceptable terms or within expected timing; the effects of
disruption from the transactions contemplated by the arrangement
agreement and the impact of the announcement and pendency of the
transactions on Fusion's business; the risk that
shareholder litigation in connection with the proposed transaction
may result in significant costs of defence, indemnification and
liability; the possibility that the achievement of the specified
milestone described in the contingent value rights agreement may
take longer to achieve than expected or may never be achieved and
the resulting contingent milestone payment may never be realised;
general industry conditions and competition; general economic
factors, including interest rate and currency exchange rate
fluctuations; the impact of COVID 19; the impact of pharmaceutical
industry regulation and health care legislation in the United
States and internationally; competition from other products; and
challenges inherent in new product development, including obtaining
regulatory approval.
Neither AstraZeneca nor Fusion
undertakes any obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except to the extent required by law.
Additional factors that could cause results to differ materially
from those described in the forward-looking statements can be found
in AstraZeneca's Annual Report on Form 20 F for the year ended
31st December 2023 and Fusion's Annual
Report on Form 10 K for the year ended 31st December
2023, in each case as amended by any subsequent filings made with
the SEC. These and other filings made by AstraZeneca and
Fusion with the SEC are available at www.sec.gov.
AstraZeneca
AstraZeneca (LSE/STO/Nasdaq: AZN) is a global,
science-led biopharmaceutical company that focuses on the
discovery, development, and commercialisation of prescription
medicines in Oncology, Rare Diseases, and BioPharmaceuticals,
including Cardiovascular, Renal & Metabolism, Respiratory &
Immunology and Vaccines & Immune Therapies. Based in Cambridge,
UK, AstraZeneca operates in over 100 countries and its innovative
medicines are used by millions of patients worldwide. Please
visit astrazeneca.com and follow
the Company on social media @AstraZeneca
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Adrian Kemp
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AstraZeneca PLC