The Acquisition of Fusion Pharmaceuticals Includes a Nice Kicker – Merger Arbitrage Mondays

Fusion Pharmaceuticals (FUSN): $21.24

Deal Size: $2.4 B

In an unusual decline in new M&A activity, we saw just one new deal announced with AstraZeneca’s (AZN) acquisition of Fusion Pharmaceuticals in a deal worth $21 per share in cash and a potential contingent value right (CVR) payment to $3 per share. On account of the CVR, we are classifying the deal as a “special conditions” deal in our Merger Arbitrage Tool (MAT).

Fusion Pharmaceuticals is an Ontario, Canada-based company that is building targeted therapies that result in the death of cancer cells. The company does this by triggering double-stranded DNA breaks in cancer cells by delivering alpha radiation to those cells through antibodies as you can see in this video. The company’s most advanced program, FPI-2265, is a potential new treatment for metastatic prostrate cancer.

AstraZeneca was willing to pay up for acquiring the company as the premium on the deal was 126% as you can see from our deal metrics page. If you exclude the full value of the CVR, the premium still works out to a hefty 97%.

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