Eli Lilly and Company (NYSE:LLY) entered into a definitive agreement to acquire Prevail Therapeutics Inc. (NasdaqGM:PRVL) from Pontifax Ltd., OrbiMed Advisors LLC and others for approximately $780 million on December 14, 2020. Pursuant to the terms, Eli Lilly and Company will pay $22.5 for each share of Prevail Therapeutics at closing and one non-tradeable contingent value right (CVR) worth up to $4 per share in cash, payable upon the first regulatory approval for commercial sale of a Prevail product in one of the following countries: United States, Japan, United Kingdom, Germany, France, Italy or Spain. To achieve the full value of the CVR, such regulatory approval must occur by December 31, 2024. If such regulatory approval occurs after December 31, 2024, the value of the CVR will be reduced by approximately 8.3% per month until December 1, 2028 at which point the CVR will expire.

The transaction will be carried out as tender offer which is set to expire on January 21, 2021. Upon successful closing of the tender offer, Eli Lilly will acquire remaining shares through a second-step merger at the same consideration as paid in the tender offer. The Merger Agreement also includes customary termination provisions for both the Prevail and Eli Lilly, subject, in certain circumstances, to the payment by Prevail to Eli Lilly or payment by Eli Lilly to Prevail, a termination fee of $30 million.

The transaction is subject customary closing conditions, including receipt of required regulatory approvals and the tender of a majority of the outstanding shares of Prevail's common stock and any applicable waiting period under the HSR Act in respect of the contemplated transaction has expired or been terminated. The transaction is not subject to any financing condition. Prevail's Board of Directors unanimously recommended that Prevail's stockholders tender their shares in the tender offer and the Board of Directors of Eli Lilly also approved the transaction. Certain stockholders of Prevail, beneficially owning approximately 51% of Prevail's outstanding common stock, have (subject to certain terms and conditions) agreed to tender their shares in the tender offer. The waiting period applicable to the offer under the HSR Act expired effective January 19, 2021. Accordingly, the antitrust condition has been satisfied. The transaction is expected to close in first quarter of 2021. There will be no change required to Eli Lilly's 2021 financial guidance for research and development expense or non-GAAP earnings per share as a result of this transaction. Lazard Freres & Co. LLC acted as financial advisor and Raymond Gietz, Matthew Gilroy, Jeffrey Osterman, Marisa Geiger, Amy Rubin, Helyn Goldstein and Eric Remijan of Weil, Gotshal & Manges LLP acted as legal advisors for Eli Lilly. Centerview Partners LLC acted as financial advisor and fairness opinion provider and Chris Comeau, Tara M. Fisher, Paul M. Kinsella, Marc Rubenstein, Renata Ferrari, Mike McFalls, David Hennes, Leo Arnaboldi, Al Cacozza and Stephanie Lapidus of Ropes & Gray LLP and Cooley LLP acted as legal advisors for Prevail Therapeutics. Georgeson LLC acted as an information agent and Computershare Trust Company, NA acted as Depository for Eli Lilly. Prevail's Board has agreed to pay Centerview an aggregate fee of approximately $18.6 million, $1 million of which was payable upon the rendering of Centerview's opinion and approximately $17.6 million of which is payable contingent upon consummation of the transactions. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Centerview Partners LLC.

Eli Lilly and Company (NYSE:LLY) completed the acquisition of Prevail Therapeutics Inc. (NasdaqGM:PRVL) from Pontifax Ltd., OrbiMed Advisors LLC and others on January 22, 2021. As of January 22, 2021, 27.4 million shares had been validly tendered and not properly withdrawn pursuant to the offer, representing approximately 79.8% of the then issued and outstanding shares of Prevail Therapeutics. Eli Lilly has accepted for payment, and has stated that it will promptly pay for, all shares that were validly tendered and not properly withdrawn pursuant to the offer. Each outstanding share (other than (i) shares owned by Prevail (ii) shares owned by Lilly or any direct or indirect wholly-owned subsidiary of Lilly immediately prior to the effective time and (iii) shares held by any stockholder who was entitled to demand and properly demanded appraisal of such shares pursuant to, and who complied in all respects with, Section 262 of the DGCL and who, as of the effective time, had neither effectively withdrawn nor lost its rights to such appraisal and payment under the DGCL with respect to such shares), was cancelled and converted into the right to receive the same offer price from Eli Lilly. The acquisition was funded primarily through cash on hand and the issuance of commercial paper. The cash portion of purchase price was aggregate of $747.4 million, net of cash acquired. Following the acquisition, Prevail surviving as a wholly-owned subsidiary of Lilly. Following the merger, all shares ceased trading prior to the opening of trading on The Nasdaq Stock Market LLC (“Nasdaq”) on January 22, 2021, and will be delisted from Nasdaq and deregistered under the Exchange Act. All of the conditions to the Offer have been satisfied.