LONDON (ShareCast) - (Sharecast News) - Eli Lilly said on Tuesday that it has agreed to buy gene therapy company Prevail Therapeutics in a deal valued at $1.04bn, as it boosted its guidance for 2020.
Under the terms of the acquisition, Eli Lilly will pay $22.50 a share in cash, plus one non-tradable contingent value right (CVR) worth up to $4.00 per share in cash, for up to $26.50. The CVR is payable upon the first regulatory approval of a product from Prevail's pipeline.

Prevail is a biotechnology company developing potentially disease-modifying AAV9-based gene therapies for patients with neurodegenerative diseases.

Mark Mintun, M.D., vice president of pain and neurodegeneration research at Eli Lilly, said: "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.

"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. We look forward to completing the proposed acquisition and working with Prevail to advance their groundbreaking work through clinical development."

Eli Lilly also updated its 2020 guidance. It now expects revenues of between $24.2bn and $24.7bn, up from previous guidance of between $23.7bn and $24.2bn. Earnings per share guidance was lifted to between $6.28 and $6.48, from between $6.20 and $6.40.

The company also set guidance for 2021, saying it expects revenues of $26.5bn to $28bn and EPS of $7.25 to $7.90.

Chief financial officer Josh Smiley said: "We're pleased with our performance despite the unprecedented challenges facing the world in 2020. We expect 2021 to be another exciting year for Lilly, characterised by robust volume-driven revenue growth for our key medicines, while we continue to invest in and progress our pipeline, expand operating margins and deliver impressive EPS and cash flow growth."

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