Vaccines specialist Icosavax Inc (NASDAQ:ICVX) is set to surge 45% on Tuesday after agreeing to be taken over by Anglo-Swedish pharma group AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) for $838 million cash up front, potentially rising to $1.1 billion.
Having closed at $10.51 yesterday, the stock jumped to $15.25 in pre-market trading this morning, above the offer price of $15.00 per share.
AstraZeneca has also offered a non-tradable contingent value right to receive up to $5.00 in cash, payable upon achievement of specified regulatory and net sales milestones, which if fully achieved would take the deal up to the equity value of roughly $1.1 billion.
In completing the acquisition, which is expected to close in the first quarter of 2024, AstraZeneca will obtain ownership of a developer of virus-like particle (VLP) vaccine technology, where vaccines mimic how naturally occurring viruses appear to the body’s immune system.
Icosavax’s lead investigational vaccine candidate, IVX-A12, is a potential first-in-class, Phase III-ready, combination protein VLP vaccine which targets both respiratory syncytial virus (RSV) and human metapneumovirus (hMPV).
Icosavax CEO Adam Simpson said: “We are pleased to announce the proposed acquisition of Icosavax by AstraZeneca as we believe it 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.
“We look forward to combining our skills and expertise in advancing the development of IVX-A12, with AstraZeneca’s decades of experience in RSV, resources, and capabilities in late-stage development.”
Iskra Reic, boss of AstraZeneca's Vaccines & Immune Therapies division, said the VLP vaccine technology "has the potential to transform prevention against severe infectious diseases," including RSV.
The FTSE 100 group's big pharma rivals have made more progress with RSV vaccines, though it currently markets Beyfortus as an antibody-based preventive.
though after working with Oxford University on the low-cost Covid vaccine, AstraZeneca's board has appeared undecided over whether it was an area that would be pursued with vigour.
Reic said the addition of Icosavax’s lead asset to the group's late-stage pipeline also adds a "platform for further development of combination vaccines against respiratory viruses".
Analyst Daniel Chancellor at Citeline said for AstraZeneca, the acquisition "offers an entry point into the RSV vaccine space and to build a broader portfolio of treatment options for RSV".
He 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".