AstraZeneca is set to acquire its first vaccine company, Icosavax, in a deal which is expected to cost around $1.1bn (£880m).

The Anglo-Swedish drugmaker announced in a statement that it had struck a deal with the Seattle-based firm, which has a potential vaccine for two common respiratory diseases can cause severe illness in older adults.

If the vaccine, named IVX-A12, passes its phase-three trial, it would compete with vaccines from GSK and Pfizer, and potentially one from Moderna, the FT has reported.

Under the terms of the agreement, AstraZeneca will offer to acquire all of Icosavax’s outstanding shares for $15 (£11.96), with the Anglo-Swedish firm also set to acquire the cash and marketable securities on Icosavax’s balance sheet, which totalled $229m (£182.5m) in late September.

Executive vice president for vaccines and immune therapies at AstraZeneca, Iskra Reic, said: 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. This aligns with our strategy to deliver a portfolio of therapies to address high unmet needs in infectious diseases, and our ambition to protect the most vulnerable patients who have high risk of severe outcomes."

Chief executive officer at Icosavax, Adam Simpson, added: "We are pleased to announce the proposed acquisition of Icosavax by AstraZeneca as we believe it offers the opportunity to accelerate, and expand access to, our potential first-in-class combination vaccine for older adults at risk of RSV and hMPV. We look forward to combining our skills and expertise in advancing the development of IVX-A12 with AstraZeneca's decades of experience in RSV, resources, and capabilities in late-stage development."

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

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