Eli Lilly, the world's largest drugmaker by market capitalization, announced Tuesday its acquisition of gene-editing startup Verve Therapeutics for up to $1.3 billion, marking another significant expansion of the pharmaceutical giant's pipeline beyond its blockbuster weight-loss and diabetes medications.
The Boston-based biotech will be acquired for $10.5 per share, representing a 67.5% premium to Verve's last closing price. Shares of Verve jumped 76% to $11.03 in premarket trading following the announcement, while Lilly's stock declined 1%.
Deal Structure and Strategic Rationale
The acquisition includes an upfront payment of almost $1 billion, with an additional $300 million contingent on Verve achieving certain clinical milestones. This transaction represents Lilly's continued investment in gene-editing technologies, following multiple partnership deals with gene-editing companies over the past two years.
The two companies had already established a partnership to develop one-time gene-editing therapies designed to reduce high cholesterol in people with heart disease. These treatments are expected to be used in combination with other drugs, positioning Lilly to compete in the expanding genetic medicines market.
Verve's Gene-Editing Technology Platform
Verve's lead therapies utilize base editing, a next-generation form of gene editing that erases and rewrites specific letters in genes. This technology enables one-time changes to DNA, potentially turning off genes that contribute to elevated cholesterol levels.
The company's gene-editing medicines target three key genes responsible for regulating blood cholesterol: PCSK9, ANGPTL3, and LPA. Verve's lead candidate, VERVE-102, is currently being studied in early-stage trials for patients with familial hypercholesterolemia, a genetic disorder characterized by high levels of bad cholesterol and premature coronary artery disease.
Market Skepticism and Competitive Landscape
Despite the acquisition announcement, some analysts have expressed reservations about the market potential for additional genetic medicines in cholesterol management. BMO Capital Markets analyst Evan Seigerman noted skepticism about "the true market need of additional genetic medicines in these indications," citing existing data from cholesterol-lowering treatments developed by competitors Merck and AstraZeneca.
The acquisition comes as Lilly seeks to diversify its portfolio and reduce dependence on its current blockbuster drugs in the weight-loss and diabetes markets. The gene-editing approach represents a potentially transformative treatment paradigm, offering the possibility of one-time interventions rather than chronic medication regimens for cholesterol management.
