Just as Adverum’s cash reserves were running dry, Eli Lilly has swooped in to buy the biotech and its phase 3-stage eye disease gene therapy.
The prize for Lilly is ixo-vec, an adeno-associated-virus-based gene therapy Adverum entered into a phase 3 study for wet age-related macular degeneration (wAMD) back in March. The biotech has been touting the intravitreal gene therapy as a potential one-and-done treatment that could “preserve sight for life.”
But Adverum’s big plans for ixo-vec looked in doubt as the biotech faced its remaining $44.4 million in cash reserves held in July running dry this month. In fact, Lilly and Adverum explained in this morning’s release that if the deal falls through, Adverum’s remaining funds are only enough to finance the biotech for the final days of October and then wind down the business.
Andrew Adams, Ph.D., Lilly group vice president, molecule discovery, said ixo-vec “has the potential to transform wAMD treatment from a paradigm of chronic care with repeated intravitreal injections to a convenient one-time therapy.”
Under the proposed deal, Adverum’s stockholders will receive $3.56 per share of the biotech—slightly below Adverum’s closing price Thursday of $4.18—along with a nontransferable contingent value right (CVR). The CVR entitles the holder to receive up to a total of $8.91 cash if ixo-vec is approved within seven years and annual sales hit $1 billion within a decade.
With an estimated 20.9 million Adverum shares outstanding, Fierce calculates that Lilly is spending around $74 million for Adverum, rising to $260 million if the CVRs are paid out in full.
It’s not the first time Lilly has come to the rescue of a cash-strapped gene therapy company. Back in April, the Big Pharma threw struggling Sangamo Therapeutics an $18 million lifeline in return for using the biotech's neurotropic AAV capsid to develop a gene therapy for a central nervous system disease.
“We are excited about the potential to join Lilly, with a proven track record in the discovery, development, and commercialization of innovative medicines for chronic and age-related conditions,” Adverum’s CEO Laurent Fischer, M.D., said in the Oct. 24 release.
“We share Lilly's commitment to healthy aging and genetic medicines innovation,” Fischer added. “Their scientific depth and global reach offer the opportunity to accelerate our vision to deliver a transformative one-and-done therapy that can potentially restore and preserve vision for millions of patients living with wAMD.”
Adverum had previously assessed the intravitreal injection in diabetic macular edema, an effort that was eventually discontinued after a patient went blind in the treated eye.
It’s been a busy year for eye-related gene therapies. While Johnson & Johnson’s $130 million bet on an X-linked retinitis pigmentosa candidate suffered a phase 3 setback in May, the likes of Opus Genetics, MeiraGTx, Beacon Therapeutics and 4D Molecular Therapeutics have seen better news in the clinic.
Meanwhile, the $135 million series B and Big Pharma backing secured by Stargardt disease-focused SpliceBio in June suggests investors can still be enthused by the potential for gene therapies to treat rare ocular diseases.