The largest British pharmaceutical group has acquired a Canadian firm that is developing the next generation of cancer treatments. This is its second acquisition this week, aimed at boosting its drug pipeline.
AstraZeneca is accelerating its ambition to replace chemotherapy and radiotherapy, which are traditional cancer treatments, with targeted drugs by acquiring Fusion Pharmaceuticals.
Fusion, a biopharmaceutical firm in clinical stages, develops radioconjugates. These have become a promising technology over the past few years. The radioactive isotope is delivered directly to the cancer cells. This precise method is intended to minimize damage to healthy cell and reach tumours that are not accessible through external beam radiation.
AstraZeneca is a FTSE100 company based in Cambridge. It has become one of Britain’s most valuable companies along with Shell through the revival of their drugs pipeline and portfolio, since Sir Pascal Soriot was appointed chief executive in 2012.
The success of AstraZeneca’s oncology blockbusters made it one of the leading cancer drug companies in the world. Four blockbusters accounted for 37 percent of AstraZeneca’s $45,8 billion in group revenue. Oncology sales grew by 20 percent to $17.1 billion.
Soriot, 64 years old, is determined that AstraZeneca will continue to be successful and acquire promising assets from other companies.
AstraZeneca has acquired Fusion, its second bolt-on acquisition in less than one week. On Thursday, it had agreed to buy Amolyt Pharma for $1 billion, a French company focused on rare diseases and endocrine disorders that was at the clinical stage.
AstraZeneca agreed to buy Fusion for $21 in cash up front, or $2 billion. This represents a premium of over 97 percent to the closing price yesterday. A future possible $3 per share is based on future regulatory milestones.
Fusion’s pipeline asset, currently in phase II, is a new potential treatment for metastatic castration-resistant prostrate cancer patients.
Susan Galbraith is executive vice president for oncology at AstraZeneca. She said, “Between 30% and 50% of cancer patients receive radiotherapy during their treatment. The acquisition of Fusion will help us to achieve our goal of transforming this aspect of patient care using next-generation radioconjugates.”
Fusion will be a fully owned subsidiary of AstraZeneca. Its operations will continue to be based in Canada and US.
Analysts from Leerink Partners in Boston said that they did not expect any regulatory pushback due to the minimal overlap between prostate cancer and AstraZeneca’s absence in the radiopharma sector. We don’t expect to see a higher offer given the terms of the deal, which we think fairly value the company.
In afternoon trading at the London Stock Exchange, shares of AstraZeneca fell 104p or 1 percent to £101.86.