AstraZeneca buys respiratory vaccine developer Icosavax in $1.1 bn deal

AstraZeneca said on Tuesday it had agreed to buy respiratory syncytial virus (RSV) vaccine developer Icosavax in a deal valued at up to $1.1 billion.

Icosavax is developing a combination vaccine candidate targeting RSV and human metapneumovirus (hMPV). RSV is a leading cause of pneumonia in toddlers and the elderly, while hMPV causes very similar respiratory tract infections.

The cash deal aimed at bolstering AstraZeneca's drugs pipeline values U.S.-listed Icosavax at $15 a share, plus up to $5 a share if certain milestones are met.

AstraZeneca made its first foray into vaccines by co-developing the COVID-19 shot with Oxford University. It set up a separate vaccine and antibody therapy division in late 2021.

The upfront payment by AstraZeneca represents a premium of about 43% to Icosavax's last close. Shares in Icosavax rose 45% to $15.25 in U.S. premarket trading.

"This combination of RSV and hMPV is a really powerful combination because they have a common structural biology ... and also overlapping seasons," said Iskra Reic, AstraZeneca Executive Vice President, Vaccines Immune Therapies.

The potential combination vaccine would add to AstraZeneca's existing RSV portfolio, which includes Beyfortus, a drug developed along with Sanofi and could be the Cambridge-based firm's first RSV vaccine.

It would also compete with GSK, whose Arexy shot was approved in the United States in May, and Pfizer. GSK had forecast its recently launched shot will top 1 billion pounds in its first year.

The deal, which aims to target the multi-billion RSV market, also comes at a time when AstraZeneca has seen sales of ots Covid-19 vaccine almost evaporate post pandemic.

AstraZeneca shares were up 1.7 per cent by 0925 GMT.

RSV is a break from AstraZeneca's expertise in oncology and comes after several acquisitions this year, including a licensing deal last month that gave it entry into the booming anti-obesity drug market.

"We believe it (the deal) 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," Icosavax CEO Adam Simpson said.

The US company announced positive interim results from its mid-stage trial of the vaccine on Tuesday.

There are currently no treatment or prevention options for hMPV or combination vaccines for RSV.