AstraZeneca to acquire vaccine maker Icosavax for up to $1.1B

Dive Brief:

• AstraZeneca on Tuesday reached a deal to acquire vaccine developer Icosavax in a deal worth up to $1.1 billion. 
• Per deal terms, AstraZeneca will acquire Icosavax’s shares at $15 apiece, and could add another $5 per share to the buyout if certain milestones and sales targets are met. The upfront payment from AstraZeneca represents an equity value of about $838 million and a premium of about 43% to Icosavax’s closing price on Monday. The acquisition would reach $1.1 billion if AstraZeneca eventually makes the future payouts, which are known as “contingent value rights.”  
• Icosavax has been developing an experimental shot that simultaneously targets respiratory syncytial virus and human metapneumovirus, another lung infection. The biotech released Phase 2 study results on Tuesday showing the vaccine spurred an immune response against both viruses without causing any serious adverse events. AstraZeneca will now take over late-stage development, and, if successful, commercialization.  

Dive Insight:

In the early days of the coronavirus pandemic, AstraZeneca, which isn’t best known for its vaccine work, became one of the first companies to successfully develop a COVID-19 shot. But production delays, safety concerns and other issues lowered the vaccine’s commercial potential, and led to speculation the company may back off of vaccine research.  

A deal for Icosavax indicates the company isn’t giving up on vaccines just yet. It also builds on a market AstraZeneca is familiar with, as it recently joined with Sanofi to develop and win approval of a preventive antibody shot for RSV.

Demand for that shot, as well as vaccines developed by GSK and Pfizer, have “demonstrated just how big [the] market could be,” wrote Evercore ISI analyst Jonathan Miller, in a note to clients on Tuesday.

Icosavax is behind all of them, but is ahead of larger rivals, such as Sanofi and Moderna, in developing a shot aimed at both RSV and hMPV, another leading cause of hospitalizations in the elderly. Its standing as a Phase 3-ready shot appears to have “tempted AstraZeneca back into a major vaccine market,” Miller wrote. 

Phase 2 study results disclosed Tuesday indicated the vaccine, currently known as IVX-A12, triggered an immune response against both viruses. 

There are currently no treatments or preventive therapies for hMPV and no combination shots for RSV and other infections. 

Icosavax’s technology “has the potential to transform prevention against severe infectious diseases, including RSV and hMPV,” said Iskra Reic, AstraZeneca’s Executive Vice President of Vaccines & Immune Therapies, in a statement. 

The deal is expected to close in the first quarter of 2024.