(Added quote from interview in paragraph 5, actions of Icosavax in paragraph 3, history and context throughout) by Yadarisa Shabong
AstraZeneca AZN.L said on Tuesday it had agreed to buy the respiratory syncytial virus (RSV) vaccine developed by Icosavax ICVX.O in a deal valued at $1.1 billion.
Icosavax is developing a combination vaccine candidate targeting RSV and human metapneumovirus (hMPV). RSV is a leading cause of pneumonia in young children and the elderly, while hMPV causes very similar respiratory tract infections.
The cash deal to bolster AstraZeneca’s drug portfolio values U.S.-listed Icosavax at $15 per share, plus $5 per share if certain milestones are met.
AstraZeneca made its first foray into the vaccine space by co-developing the COVID-19 vaccine with the University of Oxford. It created a separate division for vaccines and antibody therapies in late 2021.
AstraZeneca’s upfront payment represents a premium of approximately 43% to Icosavax’s last close. Shares of Icosavax rose 45% to $15.25 in U.S. pre-market trading.
“The combination of RSV and HPV is a very powerful combination because they have common structural biology… and overlapping seasons,” said Iskra Reic, AstraZeneca’s executive vice president for vaccines and immune therapies.
The potential combination vaccine would add to AstraZeneca’s existing RSV portfolio, which includes Beyfortus, a drug developed with Sanofi SASY.PA and which could be the Cambridge-based company’s first RSV vaccine.
It would also compete with GSK GSK.L , whose Arexy vaccine was approved in the United States in May, and Pfizer. GSK had predicted that its recently launched vaccine would exceed £1 billion in the first year.
The deal, which aims to target the multi-billion RSV market, also comes at a time when AstraZeneca has seen sales of its COVID-19 vaccine evaporate after the pandemic.
Shares in AstraZeneca were up 1.7% at 0925 GMT.
RSV breaks away from AstraZeneca’s expertise in oncology and comes after several acquisitions this year, including a licensing deal last month that allowed it to enter the booming obesity drugs market.
“We believe this deal provides the opportunity to accelerate and expand access to our potential first-in-class combination vaccine for older adults at risk from RSV and HPV.” said Adam Simpson, Managing Director of Icosavax.
The US company announced positive interim results from its mid-phase trial of the vaccine on Tuesday.
There are currently no treatment or prevention options for PhMV or RSV combination vaccines.