Form 4: Adverum Director Sells All Holdings Post-Eli Lilly Merger

Adverum Biotechnologies director James Paul Scopa reported the disposition of all common stock and stock options following the company's merger with Eli Lilly and Company.

Summary

• Adverum Biotechnologies, Inc. completed its merger with Eli Lilly and Company's direct wholly-owned subsidiary, Flying Tigers Acquisition Corporation, effective December 9, 2025.
• As a result of the merger, Adverum became a wholly-owned subsidiary of Eli Lilly and Company.
• Tendering stockholders received $3.56 per share in cash, without interest and less any applicable tax withholding (Cash Consideration).
• Stockholders also received one non-tradable contingent value right (CVR) for each share, representing the contractual right to receive up to two contingent cash payments of up to an aggregate of $8.91 per CVR, net to the stockholder in cash, upon the achievement of specified milestones.
• James Paul Scopa, a director, disposed of 10,333 shares of Common Stock on December 9, 2025, resulting in zero shares beneficially owned.
• Stock options with an exercise price equal to or greater than the Cash Consideration ($3.56) were fully vested and then cancelled for no consideration.
• Stock options with an exercise price less than the Cash Consideration were cancelled, and holders received cash equal to the difference between the Cash Consideration and the exercise price, multiplied by the number of shares, plus one CVR for each share subject to the option.

Sentiment

Score: 7

Explanation: The merger successfully closed, providing immediate cash and potential future value to former shareholders through CVRs, which is generally positive. However, the cancellation of out-of-the-money options for no consideration is a negative for those specific option holders.

Positives

• The merger successfully closed, providing immediate cash consideration of $3.56 per share to tendering stockholders.
• Former shareholders have the potential to receive additional payments of up to an aggregate of $8.91 per CVR upon the achievement of specified milestones.

Negatives

• Stock options with an exercise price equal to or greater than the Cash Consideration were cancelled for no consideration, resulting in a loss for those option holders.
• Adverum Biotechnologies, Inc. is no longer an independent publicly traded company, limiting future direct investment opportunities in the entity.

Risks

• The contingent value right (CVR) payments are not guaranteed and are dependent on the achievement of specified milestones, which may or may not occur.

Future Outlook

Adverum Biotechnologies, Inc. is now a wholly-owned subsidiary of Eli Lilly and Company, meaning its future operations and strategic direction will be integrated within Eli Lilly's corporate framework. For former Adverum shareholders, the future value beyond the cash consideration is tied to the achievement of CVR milestones.

Industry Context

This acquisition represents a common strategic move in the biotechnology and pharmaceutical industry, where larger pharmaceutical companies acquire smaller biotech firms to expand their pipeline, technology, or market presence. The use of Contingent Value Rights (CVRs) is a frequent mechanism in such deals to bridge valuation gaps or share future risks and rewards related to specific drug development milestones.

Comparison to Industry Standards

• The acquisition of a biotechnology company by a major pharmaceutical firm like Eli Lilly is a standard industry practice, often driven by the desire to acquire promising drug candidates or technological platforms.
• The inclusion of Contingent Value Rights (CVRs) in the deal structure is a common approach in biotech M&A, particularly when there is uncertainty regarding the future success or regulatory approval of pipeline assets. This mechanism allows the acquirer to mitigate risk while providing the acquired company's shareholders with potential upside.
• The terms of the cash consideration and CVR structure are specific to this transaction and would need to be compared against similar-stage acquisitions in the biotech sector to assess their relative attractiveness, though no specific comparable companies or projects are detailed in this filing.

Corporate Governance

Stakeholder Impact

• Shareholders: Received cash consideration and contingent value rights (CVRs) for their shares, providing immediate liquidity and potential future payments.
• Employees: Adverum employees are now part of Eli Lilly and Company, subject to Eli Lilly's corporate policies and integration plans.
• Option Holders: Those with in-the-money options received cash and CVRs, while those with out-of-the-money options had them cancelled for no value.

Next Steps

• Former Adverum shareholders holding CVRs will await updates on the achievement of specified milestones to determine if additional contingent cash payments will be made.
• Eli Lilly and Company will proceed with the integration of Adverum Biotechnologies, Inc. into its operations.

Key Dates

Keywords

Adverum Biotechnologies, ADVM, Eli Lilly, Merger, Acquisition, Form 4, Insider Transaction, Stock Options, CVR, Contingent Value Right, Tender Offer