06:27 AM EDT, 03/19/2024 (MT Newswires) -- AstraZeneca ( AZN ) said it would acquire Canadian clinical-stage oncology company Fusion Pharmaceuticals ( FUSN ) for up to about $2.4 billion, as the UK drugmaker looks to strengthen its cancer therapy portfolio.

A subsidiary of AstraZeneca ( AZN ) will purchase all of Fusion's shares at $21 apiece in cash, reflecting roughly $2 billion, the companies said in separate statements Tuesday. AstraZeneca ( AZN ) will also pay an extra non-transferable contingent value right of $3 a share in cash when a regulatory milestone is reached.

The combined $2.4 billion value of the transaction reflects a 126% premium to Fusion's closing price on Monday, according to the firms. Fusion's US-listed shares surged 95% in premarket trading while AstraZeneca ( AZN ) edged down 0.6%.

Fusion focuses on developing next-generation radioconjugates as precision medicines in cancer treatment. The deal is set to "complement" AstraZeneca's ( AZN ) oncology portfolio with the addition of Fusion's most advanced candidate, FPI-2265, a potential new treatment for metastatic castration-resistant prostate cancer that is currently in a phase 2 trial, the company said.

"Together with Fusion, we have an opportunity to accelerate the development of FPI-2265 as a potential new treatment for prostate cancer, and to harness their innovative actinium-based platform to develop radioconjugates as foundational regimens," Susan Galbraith, AstraZeneca's ( AZN ) executive vice president of oncology and research and development, said. The deal brings new research and development, manufacturing and supply chain capabilities in actinium-based radioconjugates, and strengthens the drugmaker's presence in Canada.

The deal, which requires approval from regulators, as well as from Fusion's investors, is expected to complete in the second quarter. Fusion will become a wholly owned subsidiary of AstraZeneca ( AZN ) and continue its operations in the US and Canada. AstraZeneca ( AZN ) will also acquire the cash, cash equivalents and short-term investments on Fusion's balance sheet, which stood at $234 million at the end of December.

"Together we look forward to building upon our work to impact the landscape of cancer therapy," Fusion Chief Business Officer Mohit Rawat said. "Deepening our collaboration with AstraZeneca ( AZN ) presents an exciting opportunity for the Fusion team."

The proposed transaction is AstraZeneca's ( AZN ) second purchase agreement of the month after it struck a $1.05 billion deal last week to buy Amolyt Pharma, to boost its late-stage rare disease pipeline. In December, it acquired Chinese clinical-stage biotechnology company Gracell Biotechnologies (GRCL) for up to $1.2 billion.

Price: 65.23, Change: -0.62, Percent Change: -0.94