AstraZeneca melds with Fusion in $2B radiopharma buyout

AstraZeneca is adding to the explosion of interest in radiopharmaceuticals, inking a $2 billion buyout to meld Fusion Pharmaceuticals with its cancer unit.  

Fusion’s pipeline is led by a PSMA-directed radiotherapy, FPI-2265, that is in phase 2 development as a treatment for metastatic castration-resistant prostate cancer (mCRPC). FPI-2265 delivers actinium-225, an alpha radiopharmaceutical that emits more energy than beta therapies such as Novartis’ Pluvicto. By getting the payload to cells that express PSMA, Fusion believes it can improve outcomes in mCRPC.

AstraZeneca formed a collaboration with Fusion in 2020, securing the chance to work on targeted alpha therapies and drug combinations. But, with interest in radiopharmaceuticals intensifying, it has opted to buy Fusion outright rather than rely on the partnership for programs. 

The takeover is worth $2 billion upfront, a 97% premium to Fusion’s closing price Monday. AstraZeneca could pay Fusion shareholders a further $400 million if the biotech meets a certain regulatory milestone. 

Fusion has focused development of FPI-2265 on post-Pluvicto patients. The biotech expects to see a 30% to 50% reduction in PSA, a prostate cancer biomarker, in the phase 2 trial. If everything goes to plan, the drug candidate could become the first actinium-PSMA-targeted radiotherapy approved for post-Pluvicto use in mCRPC.

Novartis, which helped kick-start the radiopharmaceutical boom, has a rival candidate in development as it seeks to build on the leadership position it established with the approval of Pluvicto in 2022. A recent paper in The Lancet Oncology suggested such therapies are effective in mCRPC.

FPI-2265 gives AstraZeneca an early opportunity to generate a return on its investment, but the full value of the acquisition may take longer to realize. Fusion has other molecules in development, some of which AstraZeneca knows well from its collaboration. As importantly, the biotech has invested in the supply of actinium, insulating it from a bottleneck that could throttle the availability of alpha emitters.

Fusion is producing clinical, GMP doses at its own facility and works with a network of service providers. Radioisotopes have short half-lives and are made at relatively few production sites globally. The facilities require specialized capabilities distinct from those needed to produce other drug modalities. All those factors create barriers to entry that could limit competition.

Buying Fusion will allow AstraZeneca to vault some of those barriers. The Anglo-Swedish drugmaker is the latest in a series of Big Pharma companies to identify M&A as the way to participate in the rush to realize the potential of radiopharmaceuticals.  

Eli Lilly added alpha and beta assets and supply capabilities by acquiring Point Biopharma Global for $1.4 billion. Bristol Myers Squibb joined the party by offering $4.1 billion for alpha specialist RayzeBio. The recent flurry of activity was preceded by Novartis’ $3.9 billion takeover of Advanced Accelerator Applications in 2017.