Lilly acquires struggling Adverum in backloaded gene therapy deal

Eli Lilly will buy gene therapy developer Adverum for $3.56 per share upfront, a 15% discount to its previous day market price, with the deal’s true value hinging on up to $8.91 per share in future milestone payments tied to its lead therapy, which could bring the estimated total to $261M.

Why it matters: This acquisition gives Lilly a deeper foothold in genetic medicine, while offering Adverum a lifeline amid financial troubles and industry skepticism around eye gene therapies.

Backstory: Adverum, once known as Avalanche Biotechnologies, has spent years trying to develop a gene therapy, ixo-vec, for wet age-related macular degeneration. But the company faced clinical setbacks, investor pullback, and cash shortages, reporting just $44M on hand in mid-2025 with $131M in losses in 2024.

Zoom in: In addition to the acquisition of Adverum, Lilly is supporting the production of the company’s genetic medicine products with a $65M loan to continue trials and regulatory work. Analysts say hitting the needed milestones for ixo-vec is tough due to safety concerns and strong competition from AbbVie, Eyepoint, and others.

Big picture: Lilly has been scooping up distressed genetic medicine biotechs, like Prevail, Akouos, Sigilon, and Verve, as part of its long-term bet on next-gen therapies. These deals are typically structured with low upfront payouts and high back-end milestones.