Eli Lilly Snaps Up Gene Therapy Company Prevail Therapeutics in $1.04 Billion Deal

Eli Lilly_Jonathan Weiss

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Shares of Prevail Therapeutics have skyrocketed more than 84% in premarket trading after Eli Lilly announced it was acquiring the gene therapy company in a deal valued at approximately $1.04 billion. Since the deal was announced, Prevail’s stock has nearly doubled to $23 per share, higher than the tender offer of $22.50.

Indianapolis-based Eli Lilly said the acquisition of Prevail Therapeutics will establish a new modality for drug discovery and development. The acquisition will also extend Eli Lilly’s research efforts through the creation of a gene therapy program that will be anchored by Prevail's portfolio of clinical-stage and preclinical neuroscience assets.

New Yok-based Prevail is developing disease-modifying AAV9-based gene therapies for patients with neurodegenerative diseases. Prevail's lead gene therapies in clinical development are PR001 for patients with Parkinson's disease with GBA1 mutations (PD-GBA) and neuronopathic Gaucher disease (nGD) and PR006 for patients with frontotemporal dementia with GRN mutations (FTD-GRN). In February, PR001 was awarded Orphan Drug designation to a gene therapy under development by Prevail Therapeutics as a potential treatment for patients with Gaucher disease. The therapy was also granted Rare Pediatric Disease designation for neuronopathic Gaucher disease (nGD), the most severe form of the condition. At the end of October, the FDA awarded PR001 Fast Track Designation for nGD.

PR001 is currently in Phase I/II for the treatment of PD-GBA patients and in Phase I/II for Type 2 Gaucher disease.

In addition to PR001, Prevail is also assessing PR006 in a Phase I/II study for the treatment of FTD-GRN patients. PR006 is being developed as a potentially disease-modifying, single-dose AAV9-based gene therapy for patients with frontotemporal dementia with GRN mutations. PR006 has been granted Orphan Drug Designation for treatment of FTD and Fast Track Designation for FTG-GRN.

Prevail's preclinical pipeline includes PR004 for patients with specific synucleinopathies, as well as potential gene therapies for Alzheimer's disease, Parkinson's disease, amyotrophic lateral sclerosis (ALS), and other neurodegenerative disorders. PR004 uses an AAV9 vector to deliver the GBA1 gene, which encodes glucocerebrosidase (GCase), and a molecule that suppresses expression of α-Synuclein.

Mark Mintun, vice president of pain and neurodegeneration research at Lilly, called gene therapy a promising approach to treating disease and said the acquisition of Prevail will bring this approach under the umbrella of Eli Lilly. Prevail will be a cornerstone of the company’s new gene therapy program Lilly seeks to advance through clinical development.

Asa Abelovich, founder and chief executive officer of Prevail, said Eli Lilly shares the same commitment to neurodegenerative diseases and will be a good fit for his company and will maximize the potential of Prevail’s pipeline.

“I'm incredibly proud of the Prevail team, who have made great progress advancing our pipeline of gene therapy programs for patients with these devastating disorders. In just over three years, Prevail has advanced two first-in-class gene therapy programs into clinical development for PD-GBA, nGD, and FTD-GRN, established two manufacturing platforms, and developed a broad pipeline with great potential to impact patients in need of disease-modifying treatment options,” Abeliovich said in a statement.

Under terms of the agreement, Eli Lilly will pay $22.50 per share in cash for an aggregate of $880 million. The deal also includes a “contingent value right” worth $4 per share in cash. The CVR is payable upon the first regulatory approval of a product from Prevail’s pipeline before Dec. 31, 2024, the company said. For holders of those CVRs, the timetable can become nerve-wracking as the deadline looms, as Celgene CVR holders well know. People with those CVRs are hoping against hope that the final product tied to those shares will be approved before the end of this year in order to meet that timeline.

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