The deal has Eli Lilly acquiring Prevail Therapeutics for a total of $880 million, or $22.50 per share. It also includes a non-tradable extra contingent value right that boosts the value to $1.04 billion, or $26.50 per share. LLY notes that its purchase price offer for PRVL stock is a 117% premium to its closing price on Monday.
The extra payment to shareholders of PRVL stock will only be paid if once Prevail Therapeutics gets its first regulatory approval of a product from its pipeline. This requires approval for the commercial sale of the product in the United States, Japan, United Kingdom, Germany, France, Italy, or Spain.
There’s also another stipulation to the additional payment that PRVL shareholders will want to know about. The full $4 per share is only payable if the above requirement is met by Dec. 31, 2024. After this, the value drops by 8.3 cents per month until it expires on Dec. 1, 2028.
Prevail Therapeutics points out that the deal has the unanimous support of its Board of Directors. Adding to that, shareholders representing roughly 51% of outstanding shares have agreed to tender their shares in the tender offer.
Eli Lilly and Prevail Therapeutics are expecting the deal to close in the first quarter of 2021. LLY says that it won’t require a change to its 2021 non-GAAP earnings per share guidance or research and development expense outlook.
PRVL stock was up 83.3% and LLY stock was up 2.2% as of Tuesday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.