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Eli Lilly Snatches Up Akouos Treating Ear Conditions for $487 million
Eli Lilly announced a definitive agreement for their acquisition of a precision genetic medicine company, Akouos, on October 18. The relatively young company is known for its portfolio containing a slew of gene therapies treating inner ear conditions.
The value of the proposed deal is around $487 million. However, certain milestones could result in a bump in the total payment. This marks Eli Lilly’s second gene therapy acquisition after they picked up Prevail Therapeutics in 2021.
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Treating Ear Conditions With Gene Therapy
Akouos started in 2016 with a focus on providing gene therapies for hearing loss, specifically centered on conditions in the inner ear. Among their developing pipeline are treatments such as AK-OTOF.
AK-OTOF is a dual adeno-associated viral (AAV) vector-based gene therapy designed for treating OTOF-mediated hearing loss, a condition resulting from mutations in the otoferlin gene. This gene encodes the protein otoferlin, resulting in inner hair cells of the cochlea releasing neurotransmitter vesicles as a response to sound stimulation from auditory neurons.
In September this year, the United States Food and Drug Administration (FDA) granted clearance for AK-OTOF’s advancement into a pediatric Phase 1/2 clinical trial. Currently, there are no other gene therapies available for the treatment of this sort of hearing loss.
Considered their flagship product, AK-OTOF only makes up one part of Akouos’ developing pipeline, which caught Eli Lilly’s attention.
Millions Funneled into Treating Ear Conditions
The terms of the agreement between Eli Lilly and Akouos lists price per share at around $12.50 per share in cash for an approximate total of $487 million. However, contingent value right holders are entitled to additional payments for up to $15 per share or $610 million in total. Eli Lilly’s only other gene therapy acquisition occurred in 2021, where they grabbed Prevail Therapeutics for a total of $1.04 billion.
This extra money is contingent on a number of factors, including the administration of the fifth patient with the AK-OTOF gene therapy before December 31, 2024. Other factors include other milestones centered around the administration of various treatments.
On the acquisition, Emmanuel Simons, Ph.D., M.B.A., co-founder, president, and chief executive officer of Akouos, said, “Joining Lilly – a company that shares our purpose to make life better for people around the world – will help us accelerate the development of a broad pipeline of inner ear genetic medicines.”
Both companies’ boards of directors approved the acquisition, with a target closing date sometime in the fourth quarter of 2022. A second-step merger will acquire any non-tender shares remaining after the successful closing.
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