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Fusion Pharma acquisition by AstraZeneca unlikely to be topped: Raymond James

FUSN stock

The takeover of Canada’s Fusion Pharmaceuticals (Fusion Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials NASDAQ:FUSN) by development partner AstraZeneca is likely to go ahead.

That’s the opinion of Raymond James analyst Rahul Sarugaser, who in a research update to clients March 19, raised his price target on FUSN from $16.00 to $21.00 and changed his rating on the stock from “Strong Buy 1” to “Market Perform”.

On March 19, Hamilton-based FUSN announced it had reached a deal to be acquired by Boston-based Pharma giant AstraZeneca for $21.00 per share, or a total value of approximately $2.4-billion.

“Fusion Chief Executive Officer John Valliant, Ph.D., said: “This acquisition combines Fusion’s expertise and capabilities in radioconjugates, including our industry-leading radiopharmaceutical R&D, pipeline, manufacturing and actinium-225 supply chain, with AstraZeneca’s leadership in small molecules and biologics engineering to develop novel radioconjugates. Expanding on our existing collaboration with AstraZeneca where we have advanced FPI-2068, an EGFR-cMET targeted radioconjugate into Phase I clinical trials, gives us a unique opportunity to accelerate the development of next-generation radioconjugates with the aim of transforming patient outcomes.”


Sarugaser says a bid that tops this one would be unlikely indeed.

“FUSN was the last publicly traded radiopharma takeout candidate that had both a late-stage clinical program under development and material manufacturing operations: the ideal radiopharma starter pack for big pharma. We think this was a pretty solid outcome, and was just a matter of time before a deal like this was executed (which motivated our Strong Buy rating),” he wrote. “We like the ~100% premium to closing price (though, just ~24% above its Jun. 2020 IPO price – a different time) with potential for 126% premium on realization of what we believe is a relatively easy-to-achieve regulatory milestone on FPI-2265 (see Deal Structure below), and we like that FUSN was able to reach an agreement with a partner that saw the potential of targeted alpha therapies very early on. We do not disqualify the potential for other parties to come over the top, but given the all-cash deal, the low hurdles to clear to realize full deal value, and the warm extant relationship between FUSN and AZN, a bully bid here would need, indeed, to be extraordinary.”

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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