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Investing.com -- Adverum Biotechnologies (NASDAQ:ADVM) stock surged 17% on Friday after pharmaceutical giant Eli Lilly (NYSE:LLY) announced it would acquire the clinical-stage gene therapy company.
The acquisition deal values Adverum at $3.56 per share in cash at closing, plus one contingent value right (CVR) that could provide up to an additional $8.91 per share based on milestone achievements. The total potential consideration could reach $12.47 per share. Despite the significant stock jump, Adverum shares traded at $4.90, still well below the maximum potential value of the deal.
Under the agreement, Lilly will gain control of Adverum’s lead product candidate, Ixo-vec, a Phase 3 gene therapy designed to treat wet age-related macular degeneration (wAMD) with a single intravitreal dose. The therapy aims to transform treatment for wAMD from requiring repeated injections to a one-time administration.
"Ixo-vec has the potential to transform wAMD treatment from a paradigm of chronic care with repeated intravitreal injections to a convenient one-time therapy," said Andrew Adams, Lilly group vice president of Molecule Discovery.
The CVR payments are tied to two milestones: up to $1.78 per share upon U.S. approval of Ixo-vec within seven years of closing, and up to $7.13 per share if annual worldwide net sales exceed $1 billion within ten years of closing.
As part of the transaction, Lilly will provide Adverum with a secured loan of up to $65 million to support ongoing clinical trials before the deal closes, which is expected in the fourth quarter of 2025.
The acquisition aligns with Lilly’s strategy to expand its genetic medicine capabilities in age-related diseases. The transaction was unanimously approved by Adverum’s board following a comprehensive evaluation of strategic alternatives.
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