REG - AstraZeneca PLC - AstraZeneca to acquire Fusion

AstraZenecaAnnouncement

19/03/2024 07:00

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RNS Number : 3850H  AstraZeneca PLC  19 March 2024

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 18(th) 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
18(th) 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 31(st)
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
(https://www.astrazeneca.com/our-therapy-areas/oncology.html)

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
(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 20(th) 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 16(th) March 2023, Fusion's proxy
statement for its annual meeting of shareholders, which was filed with the SEC
on 27(th) 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 31(st) December 2023 and Fusion's Annual Report on
Form 10 K for the year ended 31(st) 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 (https://www.astrazeneca.com/)

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
(http://www.astrazeneca.com/)  and follow the Company on social
media @AstraZeneca
(https://gateway.zscalertwo.net/auD?origurl=https:%2f%2fwww.linkedin.com%2fcompany%2fastrazeneca&_ordtok=Mkk3WV5DBDPmQrD4F5MGdGDMZR)

Contacts

For details on how to contact the Investor Relations Team, please click here
(https://www.astrazeneca.com/investor-relations.html#Contacts) . For Media
contacts, click here (https://www.astrazeneca.com/media-centre/contacts.html)
.

 

Adrian Kemp

Company Secretary

AstraZeneca PLC

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