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Investing.com - Chardan Capital Markets downgraded Adverum Biotechnologies (NASDAQ:ADVM) from Buy to Neutral and slashed its price target to $5.00 from $33.00 following the company’s acquisition agreement with Eli Lilly. The biotech company, currently valued at $85.41 million, has seen its shares surge 47% over the past six months despite ongoing financial challenges.
On October 24, Adverum announced it agreed to be acquired by Eli Lilly in a deal valued at $3.56 per share in cash, plus a non-transferable contingent value right (CVR) worth up to $8.91 in cash pending certain milestones.
The CVR includes $1.78 if Adverum’s ixo-vec therapy receives regulatory approval and an additional $7.13 if ixo-vec sales reach $1 billion, according to Chardan’s research note.
The transaction is expected to close in the fourth quarter of 2025, with Adverum receiving a $65 million loan from Lilly via a promissory note to fund ongoing activities until the acquisition closes.
Chardan noted that while the deal "significantly undervalues" Adverum, the company was approaching the end of its cash runway, which had been reported as extending "into 4Q25" and was recently narrowed to October 2025, making the acquisition "a better alternative than winding down operations." InvestingPro analysis reveals multiple additional risk factors and financial metrics for ADVM - unlock the full analysis with an InvestingPro subscription.
In other recent news, Adverum Biotechnologies has announced significant developments, including a major acquisition deal with Eli Lilly. The pharmaceutical giant plans to acquire Adverum in a transaction valued at up to $12.47 per share, with an upfront cash payment of $3.56 per share and a contingent value right (CVR) potentially worth an additional $8.91 per share based on certain milestones. The total transaction could be valued at approximately $1 billion, depending on milestone achievements. Furthermore, Mizuho has reiterated an Outperform rating on Adverum, maintaining a $12.00 price target, following positive updates from the company’s Phase 3 ARTEMIS study. The study has completed patient screening, with enrollment expected to finish ahead of schedule in December, and top-line data anticipated in the first quarter of 2027. Additionally, H.C. Wainwright has reiterated its Buy rating with a $30.00 price target, noting the completion of patient screening for the ARTEMIS trial ahead of schedule. These developments mark a period of accelerated progress and strategic growth for Adverum Biotechnologies.
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