Form 4: Frazier Life Sciences Exits Adverum Stake Post-Merger

Frazier Life Sciences Public Fund, L.P. disposed of its entire stake in Adverum Biotechnologies, Inc. following the completion of its merger with Eli Lilly and Company's subsidiary.

Summary

• Frazier Life Sciences Public Fund, L.P., along with its general partners FHMLSP, L.P. and FHMLSP, L.L.C., disposed of 4,288,949 shares of Adverum Biotechnologies, Inc. common stock.
• The disposition occurred on December 9, 2025, upon the consummation of the merger between Adverum Biotechnologies, Inc. and Tigers Acquisition Corporation, a wholly-owned subsidiary of Eli Lilly and Company.
• Each share was exchanged for $3.56 in cash plus one non-tradable contingent value right (CVR).
• The CVR entitles the holder to receive up to an additional $8.91 per CVR in cash upon the achievement of two specific milestones described in the Merger Agreement.

Sentiment

Score: 7

Explanation: The filing reports the expected disposition of shares by a 10% owner due to a merger, which is a neutral event in itself but represents a successful exit for the reporting person with potential future upside from CVRs. For the issuer, it signifies the completion of its acquisition.

Positives

• Received $3.56 per share in cash for 4,288,949 shares, providing immediate liquidity.
• Received one non-tradable contingent value right (CVR) per share, offering potential additional cash payments of up to $8.91 per CVR upon milestone achievement.

Negatives

• Frazier Life Sciences Public Fund, L.P. no longer beneficially owns any shares of Adverum Biotechnologies, Inc. common stock, ending its direct equity exposure.
• The contingent value rights (CVRs) are non-tradable, limiting the ability to monetize them before milestones are met or expire.

Risks

• The contingent value rights (CVRs) are non-tradable, which restricts liquidity and the ability to sell the rights in the market.
• The additional cash payment of up to $8.91 per CVR is contingent upon the achievement of two specific milestones, introducing uncertainty regarding the full realization of the potential value.

Future Outlook

The future outlook for the reporting person, Frazier Life Sciences Public Fund, L.P., is tied to the achievement of the two specific milestones associated with the contingent value rights (CVRs), which could yield up to an additional $8.91 per CVR.

Management Comments

• Steve R. Bailey, CFO of FHMLSP, L.L.C., GP of FHMLSP, L.P., GP of Frazier Life Sciences Public Fund, L.P., signed the filing on December 9, 2025.

Industry Context

This transaction reflects the ongoing trend of consolidation within the biotechnology sector, where larger pharmaceutical companies like Eli Lilly acquire smaller biotech firms to expand their pipelines, particularly in specialized areas such as gene therapy. The use of contingent value rights (CVRs) is a common mechanism in such acquisitions to manage risk and align incentives, especially when the acquired assets have significant future development milestones.

Comparison to Industry Standards

• The acquisition structure, combining an upfront cash payment with contingent value rights (CVRs), is a standard practice in the biotechnology industry for deals involving assets with future clinical or regulatory milestones.
• Eli Lilly's acquisition of Adverum Biotechnologies aligns with the broader pharmaceutical industry trend of strategic investments in gene therapy and other advanced therapeutic modalities.
• The CVR component, representing a significant portion of the potential deal value ($8.91 vs. $3.56 upfront cash), indicates that a substantial part of the acquisition's value is tied to the successful achievement of future development or commercialization milestones, a common risk-sharing approach in biotech M&A.

Stakeholder Impact

• Shareholders of Adverum Biotechnologies, Inc. received $3.56 per share in cash and one non-tradable contingent value right (CVR) per share, with potential for an additional $8.91 per CVR, marking the end of their investment in Adverum as an independent public entity.
• Frazier Life Sciences Public Fund, L.P. successfully exited its investment in Adverum, receiving cash and CVRs, aligning with its investment strategy.

Next Steps

• Monitoring the achievement of the two specific milestones described in the Merger Agreement to determine the payout, if any, from the contingent value rights (CVRs).

Key Dates

Keywords

Adverum Biotechnologies, ADVM, Eli Lilly, Merger, Acquisition, Form 4, Insider Transaction, Frazier Life Sciences, Contingent Value Right, CVR, Biotechnology, Pharmaceutical