Lilly to Acquire Akouos to Discover and Develop Treatments for Hearing Loss - Yahoo Finance

1 year ago 61

Proposed acquisition volition accelerate cistron therapies that purpose to restore, improve, and sphere proceeding for patients surviving with disabling proceeding nonaccomplishment worldwide

Transaction valued astatine astir $487 million positive a contingent worth close for an aggregate magnitude up to approximately $610 million

, /PRNewswire/ -- Eli Lilly and Company (NYSE: LLY) and Akouos, Inc. (NASDAQ: AKUS) contiguous announced a definitive statement for Lilly to get Akouos, a precision familial medicine institution that is processing a portfolio of first-in-class adeno-associated viral cistron therapies for the attraction of interior receptor conditions, including sensorineural proceeding loss.

"We are honored to enactment with the talented squad astatine Akouos who are breaking caller crushed successful the subject of treating proceeding loss," said Andrew C. Adams, Ph.D., elder vice president of familial medicine and co-director of the Institute for Genetic Medicine, Lilly. "We judge that with Lilly's resources, planetary reach, and increasing capabilities successful cistron therapy, we tin assistance Akouos fulfill their ngo of making steadfast proceeding disposable to all."

Akouos has integrated expertise crossed otology, interior receptor cause delivery, and cistron therapy with the extremity of addressing the needs of radical surviving with disabling proceeding nonaccomplishment worldwide. Akouos's pb merchandise candidate, AK-OTOF, is simply a cistron therapy for the attraction of proceeding nonaccomplishment owed to mutations successful the otoferlin cistron (OTOF). Additional pipeline programs span crossed aggregate interior receptor conditions, and see AK-CLRN1 for Usher Type 3A, an autosomal recessive upset characterized by progressive nonaccomplishment of some proceeding and vision; GJB2 (which encodes connexin 26) for a communal signifier of monogenic deafness and proceeding loss; and AK-antiVEGF for the attraction of vestibular schwannoma.

"I americium arrogant of the committedness and passionateness of our team, which has established Akouos arsenic a pioneer successful interior receptor familial medicine, arsenic demonstrated by our enactment to beforehand the archetypal investigational therapy for a familial signifier of proceeding nonaccomplishment into objective development," said Emmanuel Simons, Ph.D., M.B.A., co-founder, president, and main enforcement serviceman of Akouos. "Joining Lilly – a institution that shares our intent to marque beingness amended for radical astir the satellite – volition assistance america accelerate the improvement of a wide pipeline of interior receptor familial medicines."

Under the presumption of the transaction, Lilly volition get each of the outstanding shares of Akouos for $12.50 per stock successful cash, positive 1 contingent worth close (CVR) of up to $3.00 per share. The woody has been approved by the boards of directors of some companies.

"Gene therapy offers tremendous accidental to supply durable treatments for patients with genetically defined disease; this is our 2nd acquisition successful cistron therapy, pursuing the 2021 acquisition of Prevail Therapeutics," added Daniel Skovronsky, M.D., Ph.D., Lilly's main technological and aesculapian officer, and president of Lilly Research Laboratories. "With Akouos, we are optimistic that we tin marque a quality for radical with proceeding nonaccomplishment and different interior receptor conditions."

Terms of the Agreement

Lilly volition commence a tender connection to get each outstanding shares of Akouos for a acquisition terms of $12.50 per stock successful currency (an aggregate of approximately $487 million) payable astatine closing positive 1 non-tradeable contingent worth close per stock ("CVR") that entitles the holder to person up to an further $3.00 successful cash, for a full information of up to $15.50 per stock successful currency without involvement (an aggregate of up to approximately $610 million).

CVR holders would go entitled to person contingent payments arsenic follows: (i) $1.00 successful cash, upon the 5th (5th) subordinate being administered with AK-OTOF successful a Phase 1 oregon Phase 1/2 proceedings connected oregon anterior to Dec. 31, 2024; (ii) $1.00 successful cash, upon the 5th (5th) subordinate being administered with an Akouos cistron therapy merchandise for a 2nd monogenic signifier of sensorineural proceeding nonaccomplishment (excluding AK-OTOF and AK-antiVEGF) connected oregon anterior to Dec. 31, 2026; and (iii) $1.00 successful cash, upon (a) the archetypal (1st) subordinate being administered with an Akouos cistron therapy merchandise (excluding AK-antiVEGF) for a monogenic signifier of sensorineural proceeding nonaccomplishment successful a Phase 3 trial, oregon (b) receipt of FDA support successful the U.S. for specified Akouos product, whichever occurs first, on oregon anterior to Dec. 31, 2026, oregon its worth volition beryllium reduced by astir 4.2 cents per period until Dec. 1, 2028 (at which constituent the CVR volition expire).

There tin beryllium nary assurance that immoderate payments volition beryllium made with respect to the CVR. The transaction is not taxable to immoderate financing information and is expected to adjacent successful the 4th fourth of 2022, taxable to customary closing conditions, including receipt of required antitrust clearance and the tender of a bulk of the outstanding shares of Akouos's communal stock. Following the palmy closing of the tender offer, Lilly will get immoderate shares of Akouos that are not tendered successful the tender connection done a second-step merger astatine the aforesaid information arsenic paid successful the tender offer.

The acquisition terms payable astatine closing represents a premium of astir 121% to the 30-day volume-weighted mean trading terms of Akouos's communal banal ended on Oct. 17, 2022, the past trading time earlier the announcement of the transaction. Akouos's Board of Directors unanimously recommends that Akouos's stockholders tender their shares successful the tender offer. Additionally, definite Akouos stockholders, beneficially owning astir 26% of Akouos's outstanding communal stock, person (subject to definite presumption and conditions) agreed to tender their shares successful the tender offer.

Lilly volition find the accounting attraction of this transaction arsenic a concern operation oregon an plus acquisition, including immoderate related acquired in-process probe and improvement charges, according to Generally Accepted Accounting Principles (GAAP) upon closing, which is expected to hap successful the 4th fourth of 2022. This transaction volition thereafter beryllium reflected successful Lilly's fiscal results and fiscal guidance.

For Lilly, Kirkland & Ellis LLP is acting arsenic ineligible counsel. For Akouos, Wilmer Cutler Pickering Hale and Dorr LLP is acting arsenic ineligible counsel and Centerview Partners LLC arsenic sole fiscal advisor.

About Akouos

Akouos is simply a precision familial medicine institution dedicated to processing cistron therapies with the imaginable to restore, amended and sphere high-acuity physiologic proceeding for individuals surviving with disabling proceeding nonaccomplishment worldwide. Leveraging its precision familial medicine level that incorporates a proprietary adeno-associated viral (AAV) vector room and a caller transportation approach, Akouos is focused connected processing precision therapies for forms of sensorineural proceeding loss. Headquartered successful Boston, Akouos was founded successful 2016 by leaders successful the fields of neurotology, genetics, interior receptor cause delivery, and AAV cistron therapy.

About Lilly

Lilly unites caring with find to make medicines that marque beingness amended for radical astir the world. We've been pioneering life-changing discoveries for astir 150 years, and contiguous our medicines assistance much than 47 million radical crossed the globe. Harnessing the powerfulness of biotechnology, chemistry and familial medicine, our scientists are urgently advancing caller discoveries to lick immoderate of the world's astir important wellness challenges, redefining diabetes care, treating obesity and curtailing its astir devastating semipermanent effects, advancing the combat against Alzheimer's disease, providing solutions to immoderate of the astir debilitating immune strategy disorders, and transforming the astir difficult-to-treat cancers into manageable diseases. With each measurement toward a healthier world, we're motivated by 1 thing: making beingness amended for millions much people. That includes delivering innovative objective trials that bespeak the diverseness of our satellite and moving to guarantee our medicines are accessible and affordable. To larn more, visit Lilly.com and Lilly.com/newsroom or travel america on Facebook, Instagram, Twitter and LinkedIn. C-LLY

Cautionary Statement Regarding Forward-Looking Statements

This property merchandise contains forward-looking statements regarding Lilly's proposed acquisition of Akouos, regarding prospective benefits of the projected acquisition, regarding imaginable contingent information amounts and terms, regarding the anticipated occurrence, mode and timing of the projected tender connection and the closing of the projected acquisition, regarding Akouos's merchandise candidates and ongoing objective and preclinical development, regarding Lilly's improvement of a cistron therapy programme for interior receptor conditions and existing familial medicine programs, and regarding the accounting attraction of the imaginable acquisition nether GAAP and its imaginable interaction connected Lilly's fiscal results and fiscal guidance. All statements different than statements of humanities information are statements that could beryllium deemed forward-looking statements. Forward-looking statements reflect existent beliefs and expectations; however, these statements impact inherent risks and uncertainties, including with respect to consummating the projected acquisition and immoderate competing offers oregon acquisition proposals for Akouos, cause research, improvement and commercialization, Lilly's valuation of the accounting attraction of the imaginable acquisition and its imaginable interaction connected its fiscal results and fiscal guidance, uncertainties arsenic to however galore of Akouos's stockholders volition tender their banal successful the tender offer, the effects of the projected acquisition (or the announcement thereof) connected Akouos's banal price, relationships with cardinal 3rd parties oregon governmental entities, transaction costs, risks that the projected acquisition disrupts existent plans and operations oregon adversely affects worker retention, perchance diverting management's attraction from Akouos's ongoing concern operations, changes successful Akouos's concern during the play betwixt announcement and closing of the projected acquisition, and immoderate ineligible proceedings that whitethorn beryllium instituted related to the projected acquisition. Actual results could disagree materially owed to assorted factors, risks and uncertainties. Among different things, determination tin beryllium nary warrant that the projected acquisition volition beryllium completed successful the anticipated timeframe oregon astatine all, that the conditions required to implicit the projected acquisition volition beryllium met, that immoderate event, alteration oregon different condition that could springiness emergence to the termination of the definitive statement for the projected acquisition volition not occur, that Lilly will recognize the expected benefits of the projected acquisition, that merchandise candidates volition beryllium approved connected anticipated timelines oregon astatine all, that Lilly will beryllium palmy successful gathering a cistron therapy programme for interior receptor conditions, that immoderate products, if approved, volition beryllium commercially successful, that each oregon immoderate of the contingent information volition go payable connected the presumption described herein oregon astatine all, that Lilly's fiscal results volition beryllium accordant with its expected 2022 guidance oregon that Lilly can reliably foretell the interaction of the projected acquisition connected its fiscal results oregon fiscal guidance. For further treatment of these and different risks and uncertainties, see Lilly's and Akouos's astir caller Form 10-K and Form 10-Q filings with the United States Securities and Exchange Commission (the "SEC"). Except arsenic required by law, neither Lilly nor Akouos undertakes immoderate work to update forward-looking statements to bespeak events aft the day of this property release.

Additional Information astir the Acquisition and Where to Find It

The tender connection for the outstanding shares of Akouos described successful this connection has not yet commenced. This connection is for informational purposes lone and is neither an connection to acquisition nor a solicitation of an connection to merchantability immoderate securities, nor is it a substitute for the tender connection materials that Lilly and its acquisition subsidiary volition record with the SEC upon commencement of the tender offer. A solicitation and connection to bargain outstanding shares of Akouos volition lone beryllium made pursuant to the tender connection materials that Lilly and its acquisition subsidiary mean to record with the SEC. At the clip the tender connection is commenced, Lilly and its acquisition subsidiary volition record tender connection materials connected Schedule TO, and Akouos volition record a Solicitation/Recommendation Statement connected Schedule 14D-9 with the SEC with respect to the tender offer. THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO. INVESTORS AND STOCKHOLDERS OF AKOUOS ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE (AND EACH AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND STOCKHOLDERS OF AKOUOS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES OF COMMON STOCK IN THE TENDER OFFER. The tender connection materials (including the Offer to Purchase and the related Letter of Transmittal), arsenic good arsenic the Solicitation/Recommendation Statement, volition beryllium made disposable to each stockholders of Akouos astatine nary disbursal to them astatine Lilly's website astatine investor.lilly.com and (once they go available) volition beryllium mailed to the stockholders of Akouos escaped of charge. The accusation contained in, oregon that tin beryllium accessed through, Lilly's website is not a portion of, oregon incorporated by notation herein. The tender connection materials (including the Offer to Purchase and the related Letter of Transmittal), arsenic good arsenic the Solicitation/Recommendation Statement, volition besides beryllium made disposable for escaped connected the SEC's website at www.sec.gov. In summation to the Offer to Purchase, the related Letter of Transmittal and definite different tender connection documents, arsenic good arsenic the Solicitation/Recommendation Statement, Lilly and Akouos record annual, quarterly, and existent reports, proxy statements and different accusation with the SEC. You whitethorn work immoderate reports, statements oregon different accusation filed by Lilly and Akouos with the SEC for escaped connected the SEC's website astatine www.sec.gov.