BMO Capital downgrades Verve Therapeutics stock on Eli Lilly acquisition

Investing.com - BMO Capital downgraded Verve Therapeutics (NASDAQ:VERV) from Outperform to Market Perform with a price target of $13.50 following Eli Lilly’s (NYSE: NYSE:LLY) definitive agreement to acquire the company. Eli Lilly, currently trading at $795.40, is a prominent player in the Pharmaceuticals industry with a market capitalization of $714 billion.

The downgrade reflects Eli Lilly’s planned acquisition of Verve Therapeutics for up to $1.3 billion, according to BMO Capital. The tender offer for the acquisition is set to expire at midnight on July 23, while the Hart-Scott-Rodino waiting period will expire on July 25.

BMO Capital expects the deal to close smoothly by the third quarter of 2025, citing the extensive relationship and partnership between Eli Lilly and Verve Therapeutics. The acquisition includes a contingent value right (CVR) component.

The research firm sees approximately a 70% likelihood of achieving the $3 per share CVR by around 2028, contingent upon the initiation of Phase III trials for VERVE-102 in atherosclerotic cardiovascular disease (ASCVD).

Verve Therapeutics, a clinical-stage biotechnology company, focuses on developing gene editing medicines for cardiovascular disease treatment, making it a strategic acquisition for Eli Lilly’s portfolio.

In other recent news, Eli Lilly has declared a quarterly dividend of $1.50 per share for the third quarter of 2025, payable on September 10 to shareholders on record as of August 15. This announcement is part of the company’s regular financial operations. In clinical trials, Eli Lilly’s bimagrumab showed a 10% weight loss, with Evercore ISI maintaining an In Line rating on the stock despite some safety concerns. In response, Eli Lilly is exploring a new dosing method that could improve the safety profile of the treatment. BMO Capital reiterated its Outperform rating on Eli Lilly, highlighting developments in the company’s metabolic portfolio, including the promising oral GLP-1 asset, naperiglipron. Truist Securities also maintained a buy rating, noting a favorable risk/benefit profile for Eli Lilly’s oral diabetes drug, orforglipron, despite some safety concerns. Cantor Fitzgerald reiterated an Overweight rating, focusing on the company’s weight loss drug development pipeline, particularly the potential of amylin-targeted treatments. These updates reflect Eli Lilly’s ongoing efforts to advance its pharmaceutical offerings while addressing safety and efficacy concerns.

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