Lilly to Buy Prevail Therapeutics for Up to $1.04 Billion

By Dave Sebastian

Shares of Prevail Therapeutics Inc. rose 88.4% in premarket trading after Eli Lilly & Co. agreed to buy the company for up to $1.04 billion, or $26.50 a share, in cash, giving Lilly access to Prevail's set of gene therapies for Parkinson's and other neurodegenerative diseases.

The deal value comprises about $880 million, or $22.50 a share, in cash, the companies said Tuesday. The other $160 million in contingent value right, or $4 a share, would be paid upon the first regulatory approval of a product from Prevail's pipeline, which also includes gene therapies for dementia, Alzheimer's and neuronopathic Gaucher disease.

To get the additional payment under the agreement, the Prevail product must win approval in the U.S., Japan, the U.K., Germany, France, Italy or Spain by the end of 2024, the companies said. If the approval occurs after 2024, the contingent value right will be cut by about 8.3 cents a share per month until Dec. 1, 2028, the companies said.

At the expected closing in the first quarter, the deal would amount to an 80% premium over Prevail's closing price of $12.50 on Monday. If Prevail gets the full $160 million in contingent value right, the premium would be 112%.

Write to Dave Sebastian at [e-mail]

(END) Dow Jones Newswires

December 15, 2020 07:02 ET (12:02 GMT)

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