Global biopharmaceutical giant AstraZeneca (AZN) has agreed to purchase Nasdaq-listed vaccine maker Icosavax (ICVZ:NASDAQ) for up to $1.1 billion in cash.

The proposed transaction is designed to strengthen AstraZeneca’s Vaccines and Immune Therapies late-stage pipeline and build on its expertise in RSV (respiratory syncytial virus).

Shares in AstraZeneca traded 1.6% higher at £102.52 but are still around 11% below where they started the year compared with 0.4% gain in the FTSE 100.

ROBUST RESPONSES IN EARLY TRIALS

Icosavax’s lead vaccine candidate is a combination protein vaccine which targets both RSV and human metapneumovirus, two leading causes of severe respiratory infection and hospitalisation in adults 60 years of age and older.

There are currently no treatments or preventative therapies for human metapneumovirus and no combination vaccines for RSV.

Icosavax’s proprietary VLP (virus-like particle) vaccine technology mimics how naturally-occurring viruses appear in the body’s immune system.

The technology may offer potential benefits over non-VLP vaccines, including a stronger immune response, greater breadth of protection and greater durability requiring fewer boosters.

In Stage Two clinical trials the lead drug candidate produced ‘robust’ immune responses one month after vaccination.

WHAT DID THE COMPANY SAY?

Astra's executive vice president Iskra Reic commented: ‘This virus-like particle vaccine technology has the potential to transform prevention against severe infectious diseases, including RSV and human metapneumovirus.

‘With the addition of Icosavax's Phase III-ready lead asset to our late-stage pipeline, we will have a differentiated, advanced investigational vaccine, and a platform for further development of combination vaccines against respiratory viruses.’

AstraZeneca has agreed to pay $15 per share in cash and a non-tradeable contingent value up to $5 per share in cash based on the achievement of a regulatory milestone and a sales milestone.

The upfront consideration represents an initial $0.8 billion outlay equating to a 43% premium to Icosavax’s closing stock price on 11 December.

If the milestones are achieved, the maximum value of the deal is roughly $1.1 billion, representing a 91% share price premium.

As part of the transaction, AstraZeneca will acquire $229 million of cash and marketable securities which sit on Icosavax’s balance sheet.

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