Eli Lilly to acquire gene therapy specialist Prevail Therapeutics for £770 million

on Dec 15, 2020
  • Eli Lilly to acquire gene therapy specialist Prevail Therapeutics for £770 million.
  • Prevail Therapeutics jumped 91% in premarket trading on Tuesday.
  • Lilly forecasts £19.73 billion to £20.85 billion of revenue in fiscal 2021.

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Eli Lilly & Co. (NYSE: LLY) expressed plans of acquiring Prevail Therapeutics Inc. (NASDAQ: PRVL) on Tuesday for £770 million – a move that it says will help it expand its footprint in gene therapy. Lilly announced a 15% increase in quarterly dividend earlier this week.

Lilly’s shares jumped roughly 1% in premarket trading on Tuesday. The stock continued the rally on market open and gained a little under 4%. On a year-to-date basis, the American pharmaceutical company is now close to 25% up in the stock market. At the time of writing, Lilly is valued at £118 billion and has a price to earnings ratio of 27.13.

Lilly forecasts up to £20.85 billion of revenue in fiscal 2021

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Lilly also said on Tuesday that it expects its revenue in fiscal 2021 to fall in the range of £19.73 billion and £20.85 billion, including up to £1.49 billion of sales attributed to its COVID-19 treatments. According to Refinitiv, experts, on the other hand, are calling for a lower £19.71 billion of sales for the pharmaceutical company in 2021.

In a report published in the last week of October, Lilly said its net income contracted to £920 million in the fiscal third quarter.

The Indianapolis-based company wants to buy Prevail for £16.76 per share that represents a premium of 80% on the price at which Prevail Therapeutics closed the regular session in the stock market on Monday. Founded in 2017, the Nasdaq-listed company develops gene therapies as a potential treatment for dementia, Parkinson’s disease and other neurodegenerative disorders.

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Prevail Therapeutics jumped 91% in premarket trading

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The deal between the two healthcare companies also includes £2.98 per share of “contingent value right” in cash. It will be payable when Prevail receives the first regulatory approval for one of its products that are currently in the pipeline.

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The European Commission and the U.S. Food and Drug Administration has so far given “orphan drug” and “fast track” labels to many of Prevail’s therapies.

Shares of Prevail Therapeutics jumped 91% in premarket trading on Tuesday. Including the price action, the gene therapy company is now roughly 100% up year to date in the stock market. If you want to invest in the stock market online, you will need a reliable stockbroker – here’s a list of the top few to make selection easier for you.

At the time of writing, Prevail Therapeutics has a market cap of £578 million.


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