Eli Lilly to acquire Adverum Biotechnologies for up to $12.47 per share

Eli Lilly and Company (LLY) and Adverum Biotechnologies (ADVM) announced a definitive agreement for Lilly to acquire Adverum Biotechnologies, including its lead product candidate, Ixo-vec. Under the terms of the merger agreement, Lilly will commence a tender offer to acquire all of the outstanding shares of Adverum common stock for a per share price of (1) $3.56 per share in cash payable at closing plus (2) one non-transferrable contingent value right (CVR) that entitles the holder to receive up to an additional $8.91 per CVR in cash upon the achievement of two milestones described below, for total potential per share consideration of up to $12.47. The CVR provides payments if and when the following milestones are achieved: Up to $1.78 per CVR in cash payable upon U.S. approval of Ixo-vec prior to the seventh anniversary of closing. Up to $7.13 per CVR in cash payable upon the first achievement of annual worldwide net sales of Ixo-vec by Lilly, its affiliates or licensees exceeding $1.0 billion dollars prior to the tenth anniversary of closing. The transaction is subject to closing conditions that appear in the merger agreement and tender offer document that will be filed with the SEC, including the tender of a majority of the outstanding shares of Adverum’s common stock. These conditions do not include a financing condition. The transaction is expected to close in the fourth quarter of 2025, subject to satisfaction of the closing conditions. If the tender offer successfully closes, then Lilly would acquire any shares of Adverum that are not tendered in the tender offer through a second-step merger for the same consideration as is paid in the tender offer. In conjunction with the transaction, Adverum has entered into a Promissory Note with Lilly. The Promissory Note is secured by all of Adverum’s assets, including all of its intellectual property rights, and enables Adverum to receive a loan of up to $65 million from Lilly, drawable by Adverum in four installments, subject to specified conditions, to support ongoing Ixo-vec clinical trials and registrational development activities prior to the anticipated closing of the transaction. Funding obligations cease and the Promissory Note immediately becomes due if the transaction is terminated, including as a result of the minimum tender condition not being satisfied. Absent funds provided by Lilly under the Promissory Note, Adverum’s remaining cash and cash equivalents were expected to finance only its October 2025 operations and wind down activities.