AstraZeneca (AZN.L) announced on Tuesday that it has entered into an agreement to acquire Icosavax (ICVX.O), a developer of respiratory syncytial virus (RSV) vaccines, in a deal valued at up to $1.1 billion.
Icosavax is currently in the process of developing a combination vaccine candidate targeting both RSV and human metapneumovirus (hMPV).
RSV is a primary cause of pneumonia, affecting both toddlers and the elderly, while hMPV leads to similar respiratory tract infections.
In an effort to strengthen its drug pipeline, AstraZeneca has agreed to acquire Icosavax for $15 per share in cash, with an additional potential payout of up to $5 per share if specific milestones are achieved.
AstraZeneca, known for its involvement in co-developing the COVID-19 vaccine with Oxford University, established a separate division dedicated to vaccines and antibody therapies in late 2021.
The upfront payment made by AstraZeneca represents a 43% premium compared to Icosavax’s most recent closing share price.
Following the announcement, shares in Icosavax surged by 45% to $15.25 in premarket trading in the United States.
Iskra Reic, AstraZeneca’s Executive Vice President of Vaccines & Immune Therapies, expressed enthusiasm about the combination of RSV and hMPV, highlighting their common structural biology and overlapping seasons.
This potential combination vaccine would expand AstraZeneca’s existing RSV portfolio, which includes Beyfortus, a drug developed in collaboration with Sanofi (SASY.PA) and could potentially become the company’s first RSV vaccine.
It will also position AstraZeneca in competition with GSK (GSK.L), whose Arexy shot received approval in the United States in May, as well as Pfizer.
The acquisition of Icosavax aims to tap into the multi-billion-dollar RSV market, a strategic move by AstraZeneca as sales of its COVID-19 vaccine have declined significantly post-pandemic.
AstraZeneca’s shares saw a 1.7% increase by 0925 GMT.
The move into RSV is a departure from AstraZeneca’s primary focus on oncology, and follows a series of acquisitions this year, including a licensing agreement that granted the company access to the thriving anti-obesity drug market.
Icosavax CEO Adam Simpson expressed optimism about the deal, stating that it offers the opportunity to accelerate and expand access to their potential first-in-class combination vaccine for older adults at risk from RSV and hMPV.
Furthermore, Icosavax announced positive interim results from its mid-stage vaccine trial on the same day. Currently, there are no treatment or prevention options available for hMPV or combination vaccines for RSV.