Lilly pays up to $1.04bn for neurology gene therapy biotech Prevail

Eli Lilly has acquired Prevail, a biotech focusing on gene therapies for neurodegenerative diseases including Parkinson's, in a deal potentially worth more than $1 billion.

The big US pharma is to pay up to $1.04 billion to buy Prevail, paying $22.5 per share up front plus a $4 contingent value right (CVR) to sweeten the deal.

The CVR pays out if one of Prevail’s gene therapies is approved in one of several developed countries before December 31, 2024.

Prevail is working on gene therapies based on adeno-associated virus 9 (AAV9) technology, which must be approved in any of the group of countries comprising the US, Japan, UK, Germany, France, Italy, or Spain.

Lilly pointed out that there can be no assurance of payouts from the CVR – something that shareholders in other companies have found out the hard way.

Sanofi last year settled with holders of a CVR dating back to the French pharma’s acquisition of Genzyme that was contingent on MS drug Lemtrada achieving several goals – cash that never materialised.

And former Celgene shareholders are currently sweating over a CVR relating to three cancer drugs that looks increasingly unlikely to pay out because of delays with FDA reviews.

The acquisition is set to close in the first quarter of 2021 and will see several gene therapies added to the company’s pipeline.

Top of the list is PR001, a potentially disease-modifying single-dose gene therapy for Parkinson’s disease with GBA1 mutations (PD-GBA) and the rare condition neuronopathic Gaucher disease (nGD) that is injected into a gap at the base of the brain stem.

The phase 1/2 PROPEL clinical trial in PD-GBA is ongoing and the phase 1/2 PROVIDE trial in nGD has been granted Fast Track Designation in these indications.

Also in the pipeline is PR006 for patients with frontotemporal dementia with GRN mutations (FTD-GRN), also delivered by an injection in the same place.

This is being tested in the phase 1/2 PROCLAIM trial, where the first patient was dosed earlier this month.

Prevail is also developing PR004 for neurodegenerative diseases associated by the abnormal accumulation of alpha-synuclein protein in neurons, nerve fibres or glial cells.

It is also working on therapies for Alzheimer’s and amyotrophic lateral sclerosis (ALS).

Lilly's CEO David Ricks is pursuing a policy of "bolt-on" acquisitions to add to the company's pipeline, and scooped up dermatology specialist Dermira in a similar-sized deal at the beginning of the year.