AstraZeneca strikes $2.4bn deal for radiotherapy biotech Fusion

AstraZeneca has acquired oncology biotech Fusion Pharmaceuticals for $2.4bn to build its expertise and challenge Swiss company Novartis in the developing field of a more targeted form of radiotherapy.

Canadian biotech Fusion is a specialist in radioconjugates, a drug type that involves delivering a radioactive isotope directly to cancer cells through precise targeting, reducing the damaging side effects to healthy cells of traditional radiotherapy.

The company has a drug in mid-stage, phase 2 clinical trials that is a potential new treatment for advanced prostate cancer, the same treatment targeted by Pluvicto, a radioconjugate-based drug developed by Swiss company Novartis.

Susan Galbraith, executive vice-president of oncology research and development at AstraZeneca, said there was an “opportunity to improve” on existing drugs in the area and that the Fusion acquisition would help the UK company to develop a portfolio of radioconjugate drugs.

“This is an investment to build on the capability to deliver multiple medicines over a 10- to 15-year period,” she said. “We’re well positioned to be leaders in the broader field [of radioconjugates].”

The AstraZeneca deal involves a $2bn upfront cash transaction, with a total transaction value of $2.4bn based on contingent, further payments. It follows AstraZeneca’s $1bn acquisition of a French rare diseases start-up Amolyt last week.

AstraZeneca is a specialist in cancer treatments, making $17bn and 37 per cent of sales from oncology products in 2023.

While it has several approved drugs that are antibody drug conjugates — a new, targeted form of chemotherapy — it has not developed radioconjugates, also known as radioligands. Novartis already has a radioligand therapy drug for prostate cancer called Pluvicto on the market.

“Between 30 and 50 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,” said Galbraith.

AstraZeneca will also take over Fusion’s manufacturing and supply chain. Making radioligand drugs can be complicated due to the need for nuclear generators to create isotopes that often have short half-lives. Novartis struggled to meet demand for Pluvicto last year after the FDA identified quality control issues at its manufacturing sites, leading to shortages.

Actinium, the radioactive element on which Fusion’s drug is based, has a half-life of 11 days, making global supply “manageable”, according to Galbraith. She said that AstraZeneca would eventually have to invest in increasing Fusion’s manufacturing capacity from its existing site in Ontario.

In acquiring Fusion and Amolyt, the deal takes AstraZeneca’s M&A spending to $3.4bn in the past week. It has also announced acquisitions of Chinese oncology company Gracell for $1bn and vaccine maker Icosavax for $1.1bn in December.

Shares in AstraZeneca dipped 1.1 per cent in morning trading.