07:25 AM EDT, 03/20/2024 (MT Newswires) -- Fusion Pharmaceuticals ( FUSN ) received an investment rating downgrade on Wednesday to sector perform from outperform from RBC Capital Markets, which also removed a speculative risk qualifier from its rating on the stock, citing the Canadian clinical-stage oncology company's agreement to be acquired by AstraZeneca ( AZN ) .

The deal values Fusion at up to $2.4 billion, including an upfront payment of about $2 billion in cash plus an additional roughly $400 million contingent on a regulatory milestone. The upfront portion consists of $21 per share while the contingent portion is an additional $3 per share in cash.

RBC thus raised its price target on Fusion's shares to the upfront deal price of $21 each from $16.

Fusion's shares roughly doubled in Tuesday's session to near the deal price; the shares closed at $21.18 on Tuesday versus $10.64 on Monday.

RBC sees the deal as "likely to go through," RBC analyst Gregory Renza said in a Wednesday note to clients. RBC expects the deal to close in Q2 of 2024, as forecast by Fusion and AstraZeneca ( AZN ), "given limited pipeline overlap and the early status of FUSN's programs," Renza said.

The deal price validates "the clinical value, commercialization potential, and manufacture ability in the radiopharma space," Renza said.

Fusion Pharmaceuticals ( FUSN ) has an average investment rating of hold among analysts polled by Capital IQ, with price targets ranging from $13 to $21.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Price: 21.11, Change: -0.07, Percent Change: -0.33