This radiopharma name seen as ‘poised for takeout’ following Fusion deal

The radiopharma space is once again in the spotlight with another big pharmaceutical name buying a clinical-stage oncology company focused on developing radioconjugates, or RCs. AstraZeneca (AZN) announced on Tuesday that it is acquiring Fusion Pharma (FUSN), following similar deals by peers Bristol Meyers (BMY) and Eli Lilly (LLY) late last year.

H.C. Wainwright believes Actinium Pharmaceuticals (ATNM) is well positioned for “a similar takeout route” following Fusion’s deal, while Maxim says that the small number of companies in the space places a potential “scarcity value” on the company.

RADIOPHARMA M&A DEALS: Fusion Pharmaceuticals announced the company has entered into a definitive agreement to be acquired by AstraZeneca. The acquisition brings new expertise and pioneering R&D, manufacturing and supply chain capabilities in actinium-based RCs to AstraZeneca. Fusion will become a wholly owned subsidiary of AstraZeneca, with operations continuing in Canada and the U.S. Under the terms of the definitive agreement, AstraZeneca, through a subsidiary, will acquire all of Fusion’s outstanding shares pursuant to a plan of arrangement for a price of $21.00 per share in cash at closing plus a non-transferable contingent value right, or CVR, of $3.00 per share in cash payable upon the achievement of a specified regulatory milestone. The transaction is expected to close in the second quarter of 2024.

Late last year, Bristol Meyers acquired RayzeBio for $4.1B. The latter’s pipeline includes multiple RPT prospects, including its RYZ101 asset that is currently going through both Phase 3 and Phase 1 trials for different cancers, as well as other early-stage candidates. A few months prior, Eli Lilly had announced the acquisition of POINT Biopharma for $1.4B, which was centered around its pipeline of targeted beta – Lu-177 – and alpha – Ac-225 – emitting radio-pharmaceuticals.

Commenting on Fusion’s deal, Leerink said it sees the deal as a positive for Fusion and the radiopharma space broadly and that it believes it fairly values the potential for its lead program FPI-2265 as well as the company’s robust radiopharma R&D and manufacturing infrastructure.

ACTINIUM COULD BE NEXT: H.C. Wainwright says acquisitions in the radiopharma sector, including AstraZeneca’s deal to buy its partner in radiopharmaceuticals, Fusion Pharma, for an upfront value of $2.0B in cash underscores Actinium Pharmaceuticals’ potential and business development prospects. A deal of this size underscores the continued interest in the radiopharmaceutical space as a whole, says the firm, which sees a positive read-through for Actinium in particular. Actinium is well positioned “for a similar takeout route,” contends H.C. Wainwright. The firm has a Buy rating on the shares with a $50 price target.

Meanwhile, Maxim raised the firm’s price target on Actinium Pharmaceuticals to $30 from $20, while keeping a Buy rating on the shares following another Ac-225 acquisition with AstraZeneca to acquire Fusion Pharma. The firm notes that the acquisition comes amidst building momentum in the radiopharma space, in particular among alpha emitters, which is evident in rising valuations and substantial M&A activity, though it would point out that much of it is around solid tumors and in similar indications, prostate and neuroendocrine for example. Actinium is in hematological cancers, with the most advanced programs from a radio-pharma perspective. Maxim also points to the Ac-225 focused M&A activity, which given the small number of companies in the space, places a potential “scarcity value” on Actinium.

PRICE ACTION: In Tuesday afternoon trading, shares of Fusion have almost doubled to $21.01, while Actinium’s stock has gained about 23% to $8.03.