Aescap’s Fusion Pharmaceuticals acquired by AstraZeneca for 97% premium

AstraZeneca announced that it has come to an agreement to acquire Aescap Life Sciences portfolio company Fusion Pharmaceuticals for $ 21 and a CVR (Contingent value right) of $ 3 per share. This CVR is payable upon the achievement of a regulatory milestone. Fusion’s share price at closing yesterday was $ 10,64.

Fusion Pharmaceuticals has been in the portfolio since December 2023 and was purchased at an average share price of $ 7,9. Prior to the announcement of the acquisition, Fusion made up 2.8% of the Aescap Life Sciences fund.

Innovative cancer therapies

Fusion develops a novel form of cancer treatment, called radioconjugates. These medicines deliver a radioactive isotope directly to cancer cells by molecules that specifically target these cells. This approach has many advantages compared to traditional radiotherapy, including:

  • Minimizing damage to healthy cells.
  • Enabling access to tumors not reachable through external beam radiation
  • Increasing the effectiveness of treatment.

This sounds very futuristic but it actually is not. Novartis, another company in the Life Sciences portfolio, has already launched two medicines with similar technology that are already delivering more than $1 billion in sales 1 year after launch. Novartis eventually expects to reach annual sales of $10 billion with its radioconjugates.

M&A on the rise

Since last year, M&A activity in our sector has picked up strongly. We are delighted that the value we saw in Fusion Pharmaceuticals is confirmed by this acquisition. Nevertheless, we deem the offering price from AstraZeneca as too low and are convening with large shareholders to see whether they think alike.

Aescap’s Fusion Pharmaceuticals acquired by AstraZeneca: 97% premium