AstraZeneca has expanded its growing vaccine business with the takeover of US developer Icosavax.
The deal will see the FTSE 100 Anglo-Swedish firm pay up to $1.1billion (£875million) for the respiratory syncytial virus (RSV) specialist, reflecting a 91 per cent premium to Icosavax’s closing market price on Monday.
Icosavax is developing a combination vaccine candidate targeting RSV and human metapneumovirus (hMPV).
The deal will see the FTSE 100 Anglo-Swedish firm pay up to $1.1billion (around £875million) for vaccine specialist, Icosavax
RSV is a leading cause of pneumonia in toddlers and the elderly, while hMPV causes very similar respiratory tract infections.
The cash deal aimed at bolstering the pharmaceutical giant’s pipeline values US-listed Icosavax at $15 a share, plus up to $5 a share if certain milestones are met.
The upfront payment by AstraZeneca represents a premium of about 43 per cent to Icosavax’s last close.
Shares in Icosavax rose 45 per cent to $15.25 in US premarket trading.
The acquisition is expected to close in the first quarter of 2024.
Iskra Reic, executive vice president, vaccines & immune therapies of AstraZeneca, said: ‘This virus-like particle vaccine technology has the potential to transform prevention against severe infectious diseases, including RSV and hMPV.
‘With the addition of Icosavax’s Phase III-ready lead asset to our late-stage pipeline, we will have a differentiated, advanced investigational vaccine, and a platform for further development of combination vaccines against respiratory viruses.
‘This aligns with our strategy to deliver a portfolio of therapies to address high unmet needs in infectious diseases, and our ambition to protect the most vulnerable patients who have high risk of severe outcomes.’
The potential combination vaccine would add to AstraZeneca’s existing RSV portfolio, which includes Beyfortus, a drug developed along with Sanofi and could be the Cambridge-based firm’s first RSV vaccine.
Last month, AstraZeneca revealed that sales of oncology medicines jumped by 17 per cent to $4.39billion following a bump in orders of Imfinzi, which helps target lung and gallbladder cancer, and Calquence, a major treatment for non-Hodgkin’s lymphoma.
At the same time, revenues from cardiovascular, renal and metabolic drugs climbed by $335million to just under $7.9billion, with growth driven by type 2 diabetes medication Farxiga.
Together with a significant boost in rare disease medicine orders, this offset sales of its Covid-19 vaccine – Vaxzeveria – remaining at zero for the second successive quarter amid an absence of lockdown restrictions.
Icosavax CEO Adam Simpson said: ‘We believe it (the deal) offers the opportunity to accelerate, and expand access to, our potential first-in-class combination vaccine for older adults at risk from RSV and hMPV.’
Commenting on the deal, senior healthcare analyst at Citeline Daniel Chancellor said: ‘The acquisition is more symbolic than transformational for its vaccine business – it is showing continued commitment to an infectious diseases legacy that was created during COVID, but its core business is very much going to remain in oncology, cardiometabolic, immunology and rare diseases.’
AstraZeneca shares rose by 1.47 per cent to 10,244p in afternoon trading on Tuesday.
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