Astra’s radiopharma Fusion

Having led the antibody-drug conjugate wave AstraZeneca came late to cell therapy, and now it’s somewhat late again into the latest craze – radiopharmaceuticals. That said, today’s $2bn acquisition of Fusion Pharmaceuticals has come after the big pharma group had spent years mulling the feasibility of this therapeutic approach.

In fact Astra and Fusion had collaborated since 2020, not long after the latter floated. Several pieces of the puzzle evidently had to come together to trigger a buyout; amid a flurry of radiopharma deals Astra and Fusion took their first joint project into phase 1 in December, and within two months Fusion opened a new production plant and settled litigation that freed up its lead asset.

That asset, FPI-2265, is an anti-PSMA project in phase 2 for castration-resistant prostate cancer. Like FPI-2068, the anti-EGFR x cMet project on which Astra has collaborated since 2020, it uses actinium-225, and this alpha-emitting radioisotope is the basis of Fusion’s entire pipeline.

In February Fusion settled an inter partes review over a disputed US patent held by Heidelberg University, covering anti-PSMA/actinium-225. This involved payment of just €1m, but was described by the B Riley analyst Yuan Zhi, who covers numerous radiopharma companies, as clearing an “overhang [that was] preventing Fusion from being acquired”.

Cautious approach

That acquisition has now materialised: the Astra deal is worth $21 a share, plus a potential $3 in a non-tradeable contingent value right dependent on an undisclosed regulatory milestone.

The presence of the CVR illustrates Astra’s cautious approach here, and the takeout price suggests that competitor events haven’t pressured the company into overpaying. While $21 a share does represent a near-100% premium to Fusion’s closing price yesterday, it’s just 24% higher than the $17 at which Fusion had floated in mid-2020.

Investors seeking out the next possible buyout target in radiopharma will want to know what made Fusion so attractive. An obvious factor is the company’s actinium-225 manufacturing capacity, officially opened in January; similarly, perhaps the main driver of Lilly’s $1.4bn acquisition of Point was production capability, though in that case the radioisotope was lutetium-177.

The importance of locking in manufacturing in radiopharma was illustrated by Novartis’s problems supplying Lutathera and Pluvicto, which resulted in shortages in the face of strong demand. RayzeBio, bought for $4.1bn by Bristol Myers Squibb in December, has actinium-225 manufacturing coming on stream this year.

Antibodies too

However, there’s one key difference. While RayzeBio, Point and Novartis (through acquisitions of Endocyte and Advanced Accelerator Applications) are all developing radioligands based on small molecules, Fusion’s pipeline additionally includes radioactive isotopes fused to antibodies. Australia’s Telix is also working on radiopharmaceuticals using MAbs as well as small molecules.

Notably, it’s on MAb-based approaches that Fusion and Astra had collaborated before today’s takeover. In the meantime, FPI-2265 uses a more typical small-molecule to hit PSMA, and Fusion’s registrational strategy was to develop it initially in patients whose disease had progressed after treatment with Novartis’s lutetium-177 emitter Pluvicto; starting phase 2/3 in this setting, planned for the second quarter, will now be down to Astra.

Fusion had acquired FPI-2265 from RadioMedix a year ago for $1.5m, while the rest of the group’s technology is based on deals with ImmunoGen (now part of AbbVie), MediaPharma, Rainier Therapeutics, Roche, Johnson & Johnson and Isogenica, according to SEC filings. Another notable buy-and-flip radiopharma move was Endocyte’s $12m deal with ABX and subsequent sale to Novartis for $2.1bn.

All these deals show the appetite for this space, a factor certain to continue driving valuations of some standalone radiopharma players.

Selected biotechs with a radiopharma focus

Source: OncologyPipeline.