Eli Lilly to Acquire Adverum Bio in Deal Valued Up to $12.47/Share
The acquisition bolsters Lilly's gene therapy pipeline with Adverum's late-stage treatment for wet age-related macular degeneration, Ixo-vec.
Pharmaceutical giant Eli Lilly and Company (NYSE: LLY) has announced a definitive agreement to acquire Adverum Biotechnologies, Inc. (NASDAQ: ADVM), a clinical-stage gene therapy company, in a deal that could be worth up to $12.47 per share. The move signals a significant investment by Lilly to expand its footprint in the genetic medicine space, specifically targeting debilitating ocular diseases.
The initial offer consists of $3.56 per share in cash, a notable premium to Adverum's recent trading levels. However, the deal's full value is unlocked through a non-transferable contingent value right (CVR) of up to an additional $8.91 per share. This structure makes the total potential consideration a nearly 200% premium over Adverum’s prior closing price of $4.18, according to a press release from the companies.
Adverum’s stock surged in pre-market trading on the news, reflecting investor optimism about the acquisition. The company, based in Redwood City, California, has focused its research on developing single-injection gene therapies for serious eye conditions.
The centerpiece of the acquisition is Adverum’s lead product candidate, Ixo-vec, a late-stage gene therapy for the treatment of wet age-related macular degeneration (wAMD), a leading cause of blindness in older adults. The current standard of care for wAMD involves frequent injections into the eye, a significant burden for patients. Ixo-vec aims to provide a one-time treatment, a potentially revolutionary shift in patient care.
The CVR is tied to the future success of Ixo-vec. A payment of up to $1.78 per share is contingent on the therapy receiving U.S. regulatory approval. The remaining amount, up to $7.13 per share, is tied to Ixo-vec achieving over $1.0 billion in annual worldwide net sales within a specified timeframe. This performance-based component aligns the interests of Adverum shareholders with the long-term clinical and commercial success of the company's lead asset.
For Eli Lilly, a company with a market capitalization exceeding $730 billion, the acquisition represents a strategic, bolt-on addition to its growing pipeline. While smaller in scale compared to some of Lilly's other ventures, the deal provides access to Adverum's proprietary adeno-associated virus (AAV) technology platform and deep expertise in ophthalmic gene therapy. This move complements Lilly’s broader strategy of investing in novel therapeutic modalities with the potential to address significant unmet medical needs. The acquisition is a clear indicator of Lilly's intent to become a key player in the genetic medicine field, as noted by industry analysts.
“This acquisition of Adverum is another way we are growing our pipeline of innovative medicines to help people with challenging health conditions,” said a Lilly spokesperson in a statement. “Adverum’s expertise in gene therapy and its promising lead asset, Ixo-vec, have the potential to deliver a new, one-time treatment for patients with wet age-related macular degeneration.”
The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions, including the tender of a majority of the outstanding shares of Adverum's common stock. Following the successful closing of the tender offer, Lilly will acquire all remaining shares of Adverum at the same price through a second-step merger.
This deal is the latest in a series of acquisitions in the biotechnology sector, where large pharmaceutical companies are leveraging their substantial cash reserves to acquire innovative smaller firms with promising late-stage assets. The high-premium, CVR-heavy structure of the Lilly-Adverum deal may also set a precedent for future transactions in the biotech space, particularly for companies with high-potential, pre-revenue assets.