Lilly makes another gene therapy play with $1B deal to buy Prevail Therapeutics

Eli Lilly
(Eli Lilly)

Eli Lilly has joined the ranks of big pharma companies building a position in gene therapy, paying $26.50 per share to take control of New York-based Prevail Therapeutics and its two clinical-stage development programs.

Prevail has been snapped up just three years after being set up by OrbiMed's co-head of private equity Jonathan Silverstein, aiming to tackle Parkinson’s disease (PD) caused by mutations in the glucocerebrosidase (GBA1) gene—a disease Silverstein was diagnosed with in 2016.

The startup’s lead therapy—PR001—has now advanced into phase 1/2 testing for GBA1-positive PD as well as neuronopathic Gaucher disease, along with a second candidate (PR006) for frontotemporal dementia with GRN mutations.

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It has several other gene therapies in preclinical testing, including candidates for a group of neurodegenerative conditions known as synucleinopathies, as well as Alzheimer's disease and amyotrophic lateral sclerosis.

Shares in Prevail rocketed on the announcement of the deal, which represents a more than 80% premium on the biotech’s prior share price value and values it just over $1 billion.

Lilly’s offer takes the form of $22.50 per share plus a $4 contingent value right (CVR) payment if a product from Prevail’s pipeline gets regulatory approval—as long as that happens in a top pharma market before the end of 2024. After that, the value of the CVR will drop steadily until it expires at the end of 2028.

It’s the second gene-therapy-based deal in quick succession for Lilly, which until recently has been wary of jumping into the fast-evolving category. Last month, the big pharma stumped up $135 million upfront for an alliance with Precision BioSciences to develop in vivo gene therapies for three diseases, starting with Duchenne muscular dystrophy.

“Gene therapy is a promising approach with the potential to deliver transformative treatments for patients with neurodegenerative diseases such as Parkinson's, Gaucher and dementia,” said Mark Mintun, M.D., vice president of pain and neurodegeneration research at Lilly.

“The acquisition of Prevail will bring critical technology and highly skilled teams to complement our existing expertise at Lilly, as we build a new gene therapy program anchored by well-researched assets,” he added.

Lilly is only the latest big pharma to buy its way into gene therapy, with Roche, Novartis, Pfizer and GlaxoSmithKline among those buying into the promise of one-shot therapies for diseases that often resist conventional treatment approaches in the last few years.

The drugmaker does have a heritage in central nervous system disorders, with drugs like migraine therapies Emgality and Reyvow and Alzheimer’s diagnostic Amyvid.

It also has a series of R&D programs on the go in neurodegenerative diseases, however, and is plugging  away in dementia with phase 3 anti-amyloid candidate solanezumab for Alzheimer’s—despite serial setbacks in the clinic. Other projects include amyloid follow-up donanemab, dopamine receptor D1 receptor targeting mevidalen and anti-tau drug zagotenemab, which are all in phase 2.