Shares of Prevail Therapeutics Inc.
nearly rocketed 98.3% in premarket trading Tuesday, after the gene therapy company agreed to be acquired by Eli Lilly & Co. in a deal with a total value of $1.04 billion. Lilly’s stock edged up 0.5% ahead of the open. Under terms of the deal, Lilly will buy Prevail for $22.50 per share in cash, which is 84% above Monday’s closing price of $12.50, plus one non-tradable contingent value right (CVR) worth up to $4.00 a share in cash, for a total consideration of $26.50 in cash. The CVR is payable after the first regulatory approval of a product from Prevail’s pipeline. If the CVR is paid out, the deal could be valued at $1.04 billion. “Gene therapy is a promising approach with the potential to deliver transformative treatments for patients with neurodegenerative diseases such as Parkinson’s, Gaucher and dementia,” said Mark Mintun, vice president of pain and neurodegeneration research at Lilly. “The acquisition of Prevail will bring critical technology and highly skilled teams to complement our existing expertise at Lilly, as we build a new gene therapy program anchored by well-researched assets.” Prevail shares have lost 21.0% year to date through Monday while Lilly’s stock has run up 20.2% and the S&P 500
has gained 12.9%.