On November 2, Fusion announced that the Company entered into a collaboration with AstraZeneca to develop and commercialize next-generation alpha-emitting radiopharmaceuticals and combination therapies for the treatment of cancer. The collaboration leverages Fusion’s Targeted Alpha Therapies (TATs) platform and expertise in radiopharmaceuticals with AstraZeneca’s leading portfolio of antibodies and cancer therapeutics, including DNA Damage Response Inhibitors (DDRis). Under the terms of the agreement, the companies will jointly discover, develop and commercialize novel TATs, which will utilize Fusion’s Fast-Clear^™ linker technology platform with antibodies in AstraZeneca’s oncology portfolio. In addition, the companies will explore combination strategies

between TATs (including Fusion’s lead candidate FPI-1434) and AstraZeneca therapeutics, for the treatment of various cancers. Both companies will retain full rights to their respective assets.

Fusion convened a Safety Review Committee (SRC) meeting in the third quarter of 2020 to evaluate the safety of the single-dose cohort of 40kBq/kg (cohort three). The SRC determined the safety data of cohort three allowed Fusion to begin the multi-dosing portion of the study at the next higher planned dose level. The Company expects to dose the first patient in the multi-dosing portion of the study in the fourth quarter of 2020, assuming no delays due to the spread of COVID-19.

The available safety, dosimetry, pharmacokinetic and biodistribution data from the single dose escalation portion of the study provided justification for the initiation of FPI-1434 multi-dosing at 75 kBq/kg. Both FPI-1434, and the imaging analogue FPI-1547, have been well tolerated. No dose limiting toxicities or serious adverse events related to study treatment were reported.

Fusion anticipates reporting Phase 1 multiple-dose safety and imaging data, and the recommended Phase 2 dose/schedule, approximately nine to eighteen months after commencing this portion of the study.

Fusion has evaluated FPI-1434 in preclinical studies in combination with approved checkpoint and DNA damage response inhibitors, including PARP inhibitors, and believes the synergies observed could expand the addressable patient populations for FPI-1434 and allow for potential use in earlier lines of treatment.

Fusion anticipates the initiation of a Phase 1 combination study with FPI-1434 to occur six to nine months following determination of the recommended Phase 2 dose of FPI-1434 monotherapy.

FPI-1966 is designed to target and deliver Actinium-225 to tumors expressing FGFR3, a protein that is overexpressed in head and neck and bladder cancers. Following the completion of pre-clinical studies, the Company expects to submit an IND for FPI-1966 in the first half of 2021.

Cash and Investments: As of September 30, 2020, Fusion held cash, cash equivalents and investments of $303.1 million, compared to cash of $65.3 million as of December 31, 2019. Fusion expects its cash, cash equivalents and investments as of September 30, 2020 will enable the Company to fund its operations into 2024.

R&D Expenses: Research and development expenses for the third quarter of 2020 were $4.5 million, compared to $2.2 million for the same period in 2019. The increase was primarily due to costs related to our Phase 1 clinical trial of FPI-1434, as well as other development and personnel-related costs.

G&A Expenses: General and administrative expenses for the third quarter of 2020 were $5.8 million, compared to $1.9 million for the same period in 2019. The increase was primarily due to an increase in professional fees, personnel-related costs and other costs including general corporate, insurance and facilities costs.

Net Loss: For the third quarter of 2020, Fusion reported a net loss of $10.0 million, or $0.24 per share, compared with a net loss of $0.6 million, or $0.31 per share, for the same period in 2019. On a non-GAAP basis, excluding a change in fair value of preferred share tranche right liability, net loss was $4.1 million for the third quarter of 2019.

Fusion will participate in a virtual “fireside chat” presentation at the Jefferies Virtual London Healthcare Conference on Thursday, November 19 at 1:30pm GMT / 8:30am EST.

Assets

Current assets:

Cash and cash equivalents

Restricted cash

Short-term investments

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Deferred tax assets

Restricted cash

Long-term investments

Other non-current assets

Total assets

Liabilities, Non-Controlling Interest, Convertible Preferred Shares and Shareholders’ Equity (Deficit)

Current liabilities:

Accounts payable

Accrued expenses

Income taxes payable

Total current liabilities

Deferred rent, net of current portion

Preferred share tranche right liability

Income taxes payable, net of current portion

Special voting shares redemption right liability (Notes 2 and 7)

Total liabilities

Commitments and contingencies (Note 12)

Non-controlling interest in Fusion Pharmaceuticals (Ireland) Limited (Notes 2 and 7)

Convertible preferred shares, no par value; 0 shares and 132,207,290 shares authorized as of September 30, 2020 and December 31, 2019, respectively; 0 shares and 73,125,790 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $0 and $77,965 as of September 30, 2020 and December 31, 2019, respectively

Shareholders’ equity (deficit):

Common shares, no par value, unlimited shares authorized as of September 30, 2020 and December 31, 2019; 41,702,384 and 1,929,555 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

Total shareholders’ equity (deficit)

Total liabilities, non-controlling interest, convertible preferred shares and shareholders’ equity (deficit)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Change in fair value of preferred share tranche right liability

Change in fair value of preferred share warrant liability

Interest income (expense), net

Refundable investment tax credits

Other income (expense), net

Total other income (expense), net

Loss before (provision) benefit for income taxes

Income tax (provision) benefit

Net loss

Unrealized loss on investments

Comprehensive loss

Reconciliation of net loss to net loss attributable to common shareholders:

Net loss

Dividends paid to preferred shareholders in the form of warrants issued

Net loss attributable to common shareholders

Net loss per share attributable to common shareholders—basic and diluted

Weighted-average common shares outstanding—basic and diluted

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash used in operating activities:

Share-based compensation expense

Depreciation and amortization expense

Non-cash rent expense

Change in fair value of preferred share tranche right liability

Change in fair value of preferred share warrant liability

Amortization of premiums (accretion of discounts) on investments, net

Deferred tax benefit

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Other non-current assets

Accounts payable

Accrued expenses

Income taxes payable

Net cash used in operating activities

Cash flows from investing activities:

Purchases of investments

Purchases of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of Class B convertible preferred shares and Class B preferred share tranche right, net of issuance costs

Proceeds from issuance of Class B preferred exchangeable shares of Fusion Pharmaceuticals (Ireland) Limited and Class B preferred share tranche right, net of issuance costs

Proceeds from the issuance of common shares upon closing of initial public offering, net of underwriter fees

Payment of offering costs

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental disclosure of cash flow information:

Cash paid for income taxes

Supplemental disclosure of non-cash investing and financing activities:

Purchases of property and equipment included in accounts payable and accrued expenses

Issuance of common shares upon net settlement of stock option exercise

Issuance of warrants to purchase Class B preferred shares and Class B preferred exchangeable shares as a non-cash dividend to preferred shareholders

GAAP Net loss

Less: Adjustments

Change in fair value of preferred share tranche right liability

Change in fair value of preferred share warrant liability

Non-GAAP Net loss