Biotech Values

[DewDiligence]

LLY acquires ADVM for $3.56/sh cash +CVR—a_15% discount to yesterday’s closing price (excluding the CVR):

https://www.prnewswire.com/news-releases/lilly-to-acquire-adverum-biotechnologies-302593482.html

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.

I’m generally bearish on gene therapies for wet AMD because the disease is multifactorial and less risky approaches to treatment are getting better. However, LLY isn’t paying much for this acquisition, roughly $75M excluding the CVR.