Health, Wellness & Biotech M&A Startups Venture

Radiopharmaceuticals Are A Buzzy Area For Deal-Making

Illustration of lab worker looking through beeker

When reporting on startup investment, big funding rounds and M&A deals for pharmaceutical companies are pretty common.

Rarely, however, does the top search result for their area of expertise link to the International Atomic Energy Agency.

In the area of radiopharmaceuticals, however, the agency turns out to be one of the more prolific publishers of reports and explainer pieces. Its involvement coincides with growing investment around these therapies, which use radioactive forms of chemical elements called radioisotopes to treat cancers and other medical conditions.

Last week, we saw both one of the larger funding rounds and one of the biggest M&A deal closings to date for the space.

On the funding front, Germany’s Isotope Technologies Munich closed on just over $200 million in an equity round led by Temasek Holdings.

Isotope Technologies said the money will go partly to prepare for a potential market launch of a treatment for a type of neuroendocrine tumor, which is currently in late-stage clinical trials. It  also plans to expand its manufacturing capabilities and pipeline of medical isotopes for cancer treatment.

On the M&A side, meanwhile, a subsidiary of AstraZeneca completed its purchase of Fusion Pharmaceuticals, a developer of oncology radiopharmaceuticals, for $2.1 billion plus up to $300 million in milestone payments. Hamilton, Ontario-based Fusion, founded in 2014, went public four years ago.

Growing pipeline of recently funded companies

Venture funding, meanwhile, continues to flow. Per Crunchbase data, at least 12 private companies focused on radiopharmaceuticals have raised venture or growth funding in the past two years. The companies in our sample set, posted below, have raised nearly $1.3 billion in funding to date.

It’s a relatively youthful list, with six of the companies on it founded less than four years ago. Across the whole list, meanwhile, a majority of funding also has come in the past couple of years.

A hot area for IPOs and acquisitions

Looking at valuations given to leading radiopharmaceuticals companies from public investors and large-cap acquirers, one can see why startup investors would be enthusiastic.

Fusion wasn’t the only multibillion-dollar radiopharmaceuticals M&A deal in recent months, nor was it even the largest. In February, Bristol-Myers Squibb completed its acquisition of Rayze Bio, a developer of radiopharmaceuticals for treating tumors, for $4.1 billion. San Diego-based Rayze had just gone public in September.

Of course, it’s not just the valuations that have attracted startup investors’ attention. We’re also seeing promising clinical trial results for treatments addressing some of humanity’s most intractable diseases.

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Illustration: Dom Guzman

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