The pharmaceutical giant Eli Lilly announced that it will buy the genetic medicine company Akouos focused on hearing improvement, for up to $610 million.
Shares of Akouos soared 85% in morning trading Tuesday to $13, while Lilly’s stock slipped 0.22%.
The merger of these two companies is meant to help them accelerate gene therapies that will help improve hearing for patients, according to a joint news release.
“We believe that with Lilly’s resources, global reach, and growing capabilities in gene therapy, we can help Akouos fulfill their mission of making healthy hearing available to all,” Andrew Adams, co-director at the Lilly Institute for Genetic Medicine, said in the news release.
Lilly (ticker: LLY) will commence a tender offer to acquire all outstanding shares of Akouos (AKUS) for a purchase price of $12.50 per share in cash, which equals around $487 million. The size of the deal could grow to about $610 million, or bump it up an extra $3-a-share to $15.50 if certain goals are hit linked to drug trials.
Such contingent value rights will be paid based on the treatments for hearing loss hitting certain milestones throughout the next few years and gaining regulatory approval by the Food and Drug Administration by or before Dec. 31 of 2026.
The transaction is expected to close in the fourth quarter of 2022.
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