Lilly hedges IP risk in $1.3bn Verve acquisition

Eli Lilly has announced its intention to acquire Verve Therapeutics for approximately US$1.3 billion, aiming to accelerate development of one-time gene-editing treatments for cardiovascular disease. The acquisition builds on a pre-existing collaboration between the two companies focused on in vivo gene editing and positions Lilly to compete more directly in the growing space of CRISPR-based therapeutics.

The deal grants Lilly full control over Verve’s pipeline, including VERVE-101 and VERVE-102—targeting PCSK9 for LDL cholesterol reduction—as well as proprietary base-editing technology. The transaction is expected to close in the third quarter of 2025, subject to customary closing conditions.

In brief:

• The acquisition expands Lilly’s capabilities in single-dose gene therapies.
• Verve’s IP portfolio is dominated by two families covering base editing and RNA delivery.
• The deal includes a CVR that could be reduced by up to US$0.50 to offset patent defence costs.
• The offset applies up to a maximum of US$44 million across all CVRs.
• The offset provision indicates patent ownership questions remain unresolved.

Verve has a growing patent portfolio

Verve was founded in 2018, and has since accumulated a patent portfolio of 90 application patents, and 20 granted patents, across 10 patent families.

Verve is pursuing filings worldwide, as it seeks commercial opportunities globally

Verve has actively filed in 13 different countries as it seeks to protect its intellectual property in countries it believe are commercially attractive. The main countries are the UK, United States, Canada, Australia, Israel and Korea.

Two patent families account for 68% of the application patents

Two Verve patent families account for 37 and 24 application patents, respectively.

78022701: BASE EDITING OF PCSK9 AND METHODS OF USING SAME FOR TREATMENT OF DISEASE (most common title) [espacenet | google patents]

• 37 application patents [AU | BR | CA | EP | GB | IL | JP | KR | MX | PH | US | WO]
• 9 granted patents [GB | AU | US]

77612786: Compositions and methods for targeted rna delivery (most common title) [espacenet | google patents]

• 24 application patents [AU | BR | CA | EP | GB | IL | KR | MX | PH | US | WO]
• 9 granted patents [GB | US]

Eli Lilly seeks to limit financial exposure in case of essential patent dispute

The Eli Lilly offer to acquire Verve is made up of two part

(i) $10.50, net to the stockholder in cash, without interest and less any applicable tax withholding

(ii) one non-tradable CVR per Share, which represents the contractual right to receive a contingent payment of up to $3.00 per CVR, net to the stockholder in cash, without interest and less any applicable tax withholding, upon the achievement of a certain specified milestone

The CVR agreement includes a clause that allows Eli Lilly to reduce the milestone payment by up to $0.50 per CVR if it incurs costs related to securing or defending ownership of certain patents.

These reductions apply in the event of a "Final Resolution"—a defined outcome of a dispute regarding the Relevant Patents—and cover 50% of qualifying expenses, including licensing fees, legal counsel, expert witnesses, and arbitration or court costs. Any such offset is distributed pro rata across all outstanding CVRs.

The Eli Lilly offer document makes explicit mention of the following patents.

Relevant Patents: means the claims under PCT patent application publication numbers WO2021207710, WO2021207711, and WO2021207712, together with any patents issuing therefrom.

• WO2021207710 | BASE EDITING OF ANGPTL3 AND METHODS OF USING SAME FOR TREATMENT OF DISEASE [espacenet | google patents]
  • Provided herein are compositions for gene modification or editing and methods of using same to treat or prevent certain conditions. Specific compositions and methods capable of safely and effectively editing gene targets expressed in the liver to durably lower LDL-C thereby treating a leading cause of cardiovascular disease are disclosed.
• WO2021207711A2 | CHEMICALLY MODIFIED GUIDE RNAS FOR GENOME EDITING WITH CAS9 [espacenet | google patents]
  • Provided herein are compositions for gene modification or editing and methods of using same to treat or prevent certain conditions. Specific compositions and methods capable of safely and effectively editing gene targets expressed in the liver to durably lower LDL-C thereby treating a leading cause of cardiovascular disease are disclosed.
• WO2021207712A2 | BASE EDITING OF PCSK9 AND METHODS OF USING SAME FOR TREATMENT OF DISEASE [espacenet | google patents]
  • Provided herein are compositions for gene modification or editing and methods of using same to treat or prevent certain conditions. Specific compositions and methods capable of safely and effectively editing gene targets expressed in the liver to durably lower LDL-C thereby treating a leading cause of cardiovascular disease are disclosed.

This mechanism shifts part of the financial risk associated with potential patent disputes from Lilly to the CVR holders. It protects Lilly from having to absorb the full cost of defending or acquiring exclusive rights to the underlying intellectual property.

Is this a small offset with a symbolic signal?

It’s worth asking why Lilly included this clause at all. The maximum offset—$0.50 per CVR—equates to about $44 million in total, or roughly 4.4% of the upfront cash component of the deal. But as a share of the $3.00 CVR itself, it represents a potential reduction of 16.7%. That’s a more noticeable impact for CVR holders, especially given that the pay-out is already contingent.

The offset may ultimately function more as a symbolic hedge than a material one—signalling that ownership of the underlying IP isn’t entirely settled, even if the cost of defending it may be.

Source:

Lilly to acquire Verve Therapeutics to advance one-time treatments for people with high cardiovascular risk
https://ir.vervetx.com/news-releases/news-release-details/lilly-acquire-verve-therapeutics-advance-one-time-treatments

Tender offer schedule and amendment filed by a third party
https://ir.vervetx.com/node/9096/html