Lilly to acquire Verve in $1B bet on gene editing for heart disease

Dive Brief:

• Eli Lilly agreed to buy Verve Therapeutics for $1 billion, betting on the promise of one-and-done gene therapies to treat cardiovascular disease. 
• The deal announced Tuesday offers Verve stockholders $10.50 a share, plus a contingent value right worth another $3 a share. The non-tradeable CVR would pay out if the company’s experimental VERVE-102 treatment advances enough to dose a patient in a Phase 3 trial within 10 years of the transaction’s closing.
• Verve CEO Sekar Kathiresan and other top stockholders have already agreed to tender shares that represent about 17.8% of Verve’s outstanding stock and the gene editing company’s board recommends that all investors agree to the tender offer, Lilly said. A second-step merger will follow if needed. The companies expect to complete the transaction in the third quarter.

Dive Insight:

For Lilly, the acquisition offers greater control of a pipeline it’s already invested in. The company inked a deal with Verve in 2023 to develop a product now known as VERVE-301 that’s still in preclinical research. Later that year, Lilly bought other Verve opt-in rights from Beam Therapeutics that include the program for VERVE-102.

“The deal makes sense for Verve shareholders and makes sense given the exposure Lilly has to Verve’s entire disclosed pipeline,” William Blair analyst Myles Minter wrote in a note to clients. Lilly is also stepping in at a time when Verve shares are undervalued, Minter said.

Verve went public in 2021 with one of the largest initial offerings of the year in the biotech industry, raising almost $270 million by selling shares at $19 each. As an investment boom continued that year amid high hopes for gene therapies, Verve’s shares soared above $70.

But the company’s lead product, VERVE-101, encountered safety concerns and Verve decided to scrap it in favor of a successor, VERVE-102, that used a different lipid nanoparticle for delivery of the treatment. That product has shown early promise.

Even so, Verve shares closed at $6.27 yesterday, hurt by a general slump in investment in cell and gene therapy companies. “Eli Lilly is getting a bargain here,” Minter wrote. Still, the 67% premium to the current share price is “a win for Verve shareholders and the gene editing space more broadly, which has been under significant macro pressure in a difficult funding environment.”

The CVR is likely to pay out, Minter said. The timeframe of 10 years shouldn’t be an issue; dosing in a Phase 3 trial is more dependent on continued demonstration of safety in earlier-stage research, he wrote. 

The larger question for Lilly is whether patients and doctors will embrace genetic medicines for cardiovascular disease, when more traditional treatment options are readily available. Other companies have struggled in that situation.

Verve counters that many patients drop off standard medications, putting themselves in danger of complications like a heart attack. The company’s lead product is administered as an infusion, which also sets it apart from the complicated administration process that underlies high-profile gene editing treatments such as Vertex’s Casgevy.

Verve’s medicine “could shift the treatment paradigm for cardiovascular disease from chronic care to one-and-done treatment,” Ruth Gimeno, Lilly’s group vice president for diabetes and metabolic research and development, said in the company’s press release.

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