H.C. Wainwright downgrades Adverum stock to Neutral following Eli Lilly acquisition

Investing.com - H.C. Wainwright downgraded Adverum Biotechnologies (NASDAQ:ADVM) from Buy to Neutral with a price target of $5.00 following the announcement of Eli Lilly’s acquisition of the company. The stock currently trades at $4.29, with a market capitalization of just $94.71 million.

The downgrade comes after Adverum Biotechnologies entered into a definitive agreement to be acquired by Eli Lilly, which will take over the development of Ixo-vec, Adverum’s lead intravitreal gene therapy candidate for wet AMD. InvestingPro data shows the company has seen a remarkable 102.84% price return over the past six months, though it remains slightly undervalued according to Fair Value analysis.

H.C. Wainwright views the acquisition as validation for gene therapies in wet AMD treatment, noting positive feedback from retinal key opinion leaders about the technology’s potential. This validation comes despite Adverum’s challenging financial position, with an EBITDA of -$191.44 million over the last twelve months and a current ratio of 0.65.

Ixo-vec is currently being evaluated in the Phase 3 ARTEMIS trial, which has completed patient screening with pivotal topline results anticipated in the first quarter of 2027.

The gene therapy has received Fast Track and Regenerative Medicine Advanced Therapy designations from the FDA, along with PRIME designation from the EMA, with the acquisition expected to close in the fourth quarter of 2025, subject to closing conditions.

In other recent news, Adverum Biotechnologies announced its agreement to be acquired by Eli Lilly in a deal valued at $3.56 per share in cash, with a potential additional $8.91 per share contingent on achieving certain milestones. This acquisition could total up to $12.47 per share, depending on the milestones reached, and values the transaction at approximately $1 billion. Following this announcement, Mizuho reiterated its Outperform rating for Adverum, maintaining a price target of $5.50. Meanwhile, RBC Capital adjusted its price target for Adverum from $3.00 to $4.00, while maintaining a Sector Perform rating. In contrast, Chardan Capital Markets downgraded Adverum from Buy to Neutral, revising its price target significantly from $33.00 to $5.00. These developments come as Adverum continues to progress with its Phase 3 ARTEMIS study for its lead asset, ixo-vec, with top-line data expected in late 2025 and early 2027.

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