AstraZeneca’s Fusion Pharmaceuticals acquisition is the latest in a wave of M&A activity that includes recent deals by Eli Lilly and Bristol Myers Squibb. The lead Fusion program is in mid-stage clinical development for treating advanced prostate cancer.

By FRANK VINLUANAstraZeneca is following in the footsteps of some of its big pharmaceutical company peers, plunking down $2 billion to acquire its radiopharmaceuticals partner Fusion Pharmaceuticals. More than adding a pipeline of targeted radiation therapies, AstraZeneca gains the crucial supply chain and manufacturing infrastructure to support them.
The sum is an upfront payment. According to the deal terms announced Tuesday, AstraZeneca will pay $21 cash for each Fusion share, representing a 97% premium to Fusion’s closing stock price on Monday. Shareholders of the radiopharmaceutical company could get even more. The deal includes a contingent value right that will pay an additional $3 per share upon achievement of a regulatory milestone. That payment would amount to about $400 million more. Fusion is headquartered in Canada and has U.S. operations in Boston. The company reports its financials in U.S. dollars.
The targeted delivery of a radiopharmaceutical comes from its design: a radioactive isotope attached to a molecule that homes in on a cancer cell, maximizing the therapy’s tumor-killing capability while minimizing damage to healthy cells. Fusion’s therapies employ alpha particles that are attached to various molecules — antibodies, peptides, or small molecules. The company contends that more choices in targeting molecules gives it better ability to address a wider range of cancer targets and tumor types.
AstraZeneca and Fusion have been collaborating since 2020. That deal covered the discovery and development of up to three radiopharmaceuticals using Fusion’s technology and AstraZeneca’s antibodies. The first program out of the partnership, FPI-2068, targets solid tumors expressing EGFR-cMET. This radiopharmaceutical has reached Phase 1 testing. The collaboration also covers the evaluation of up to five combination therapies that pair Fusion’s assets with AstraZeneca cancer drugs. So far, the Fusion radiopharmaceuticals FPI-1434 and FPI-1966 have been identified for this combination research, which is fully funded by AstraZeneca.
Separately, Fusion has an agreement with Merck to test FPI-1434 in combination with that company’s blockbuster cancer immunotherapy Keytruda. This research is still preclinical.
Fusion’s most advanced program is the wholly owned asset FPI-2265, a radiopharmaceutical that targets prostate-specific membrane antigen (PSMA), a protein abundant on prostate cancer cells. FPI-2265 is currently in Phase 2 testing in metastatic and castration-resistant prostate cancer.
“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,” Susan Galbraith, AstraZeneca’s executive vice president, oncology R&D, said in a prepared statement. “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.”
The regulatory milestone tied to the contingent value right payment was not disclosed, but Leerink Partners analyst Faisal Khurshid said it’s likely the regulatory approval of FPI-2265. More than this lead radiopharmaceutical, Fusion brings to AstraZeneca in-house manufacturing capability, he said in a research note. Fusion “has long emphasized the importance of vertical integration as a key success factor in radiopharma,” Khurshid said. “We believe the acquisition recognizes the value of [Fusion’s] lead program as well as strategic control over isotope supply and manufacturing.”
Isotope supply and manufacturing were key components of other recent M&A deals in the radiopharmaceuticals space. Eli Lilly’s $1.4 billion acquisition of Point Biopharma Global brought that company’s in-house manufacturing. Late last year, Bristol Myers Squibb announced a $4 billion deal to buy RayzeBio, a radiopharmaceuticals developer that also has its own manufacturing capabilities. That acquisition closed last month.
In addition to the upfront payment and contingent value right, AstraZenca’s agreement with Fusion brings that company’s cash, cash equivalents, and short term investments, which totaled $234 million as of the end of 2023. The two companies expect to complete the transaction in the second quarter of this year, pending shareholder and regulatory approvals. After that, Fusion will become a wholly owned AstraZeneca subsidiary, maintaining its operations in Canada and the US.
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