(Updates shares, adds analysts' comment in paragraph 10, background in paragraphs 8 and 9) By Mariam Sunny Oct 24 (Reuters) – Eli Lilly said on Friday it would acquire gene therapy developer Adverum Biotechnologies in a deal valued at up to $261.7 million, aiming to strengthen its pipeline with an experimental eye disease treatment. The deal will give Lilly access to Adverum's candidate, Ixo-vec, marking the U.S. drugmaker's latest effort to tap the eye care market and underscoring its focus on gene therapies. Lilly has offered $3.56 for each share of Adverum held, totaling about $74.7 million in cash. Shareholders may also get up to $8.91 per share in milestone payments, contingent on U.S. approval of Ixo-vec within seven years and achieving more than $1 billion in annual global sales within 10 years of deal close. This brings the total potential payout to $12.47 per share. Adverum shares closed at $4.18 on Thursday. They rose nearly 3% to $4.29 in morning trading on Friday. The deal provides a crucial lifeline for Adverum, whose cash reserves were only sufficient to sustain operations through this month. Ixo-vec is being studied in a late-stage trial as a one-time eye injection for wet age-related macular degeneration, or wAMD, a leading cause of blindness among the elderly. The wAMD treatment market, with about 1.5 million patients in the United States, is currently crowded with treatments including Roche's Lucentis and Regeneron's Eylea, which require frequent eye injections. There are other players competing to bring a wAMD gene therapy to the market, including 4D Molecular Therapeutics , and Regenxbio in collaboration with AbbVie . TD Cowen analysts see blockbuster potential for the drug in the U.S. even with modest market penetration, and forecast global sales of $1.3 billion in 2033. Earlier this year, Lilly agreed to acquire gene-editing startup Verve Therapeutics for up to $1.3 billion, eyeing one-time therapies for cardiovascular diseases. Lilly expects the Adverum deal to close in the fourth quarter. (Reporting by Mariam Sunny and Padmanabhan Ananthan in Bengaluru; Editing by Sriraj Kalluvila and Pooja Desai)
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