Lilly (LLY.US) acquires Verve (VERV.US) to boost the industry, gene editing sector sees an increase.

The stock price of a biotechnology company focused on gene therapy has risen, as Eli Lilly (LLY.US) has agreed to acquire the gene-editing startup Verve Therapeutics (VERV.US) in Boston for a total price not exceeding $1.3 billion, providing a positive boost to the struggling industry. Companies performing well include Editas Medicine (EDIT.US), Prime Medicine (PRME.US), Intellia Therapeutics (NTLA.US), CRISPR Therapeutics (CRSP.US), and Beam Therapeutics (BEAM.US), all of which have experienced significant declines in the past 12 months. Wall Street has responded positively to Eli Lilly's latest acquisition proposal, driving the stock price of Verve Therapeutics, focused on foundational genetics and CRISPR-Cas gene editing technology, up by approximately 74%. The deal includes a contingent value right, priced over 100% higher than the company's 30-day average stock price. However, BMO Capital Markets is skeptical of the rationale behind the transaction, stating "We are skeptical of the actual market demand for these additional gene therapies in these indications." The company's research report notes, "While the proposed deal size is relatively modest relative to Lilly's financial strength, we believe the company may have better uses for capital at this time." On the other hand, investment firm William Blair is more optimistic, pointing out that this deal is very beneficial for Verve Therapeutics' shareholders, who will receive payments related to the CVR in the coming years, as the pharmaceutical giant from Indiana acquired the biotech company at a very low price. Analyst Myles Minter stated, "This deal makes sense for Verve Therapeutics' shareholders, and based on the entire product line of Verve Therapeutics involved in the deal with Lilly, it is also reasonable."