SCHEDULE: Ventyx Biosciences to Merge with Eli Lilly

Ventyx Biosciences, Inc. has entered into a definitive merger agreement to be acquired by Eli Lilly and Company for $14.00 per common share in cash.

Summary

• Ventyx Biosciences, Inc. (the "Issuer") has agreed to be acquired by Eli Lilly and Company ("Parent") through a merger with RYLS Merger Corporation, a wholly-owned subsidiary of Parent.
• Each outstanding common stock share will be converted into the right to receive $14.00 in cash, without interest and less any applicable tax withholding.
• Each outstanding preferred stock share will be converted into the right to receive $1,400.00 in cash, without interest and less any applicable tax withholding.
• Outstanding Issuer Stock Options will be cancelled for cash equal to the product of the number of shares subject to the option and the excess of $14.00 over the exercise price, if positive; out-of-the-money options will be cancelled without consideration.
• Outstanding Issuer RSUs will be cancelled for cash equal to the product of the number of shares subject to the RSU and $14.00.
• Somasundaram Subramaniam, a reporting person, and other parties have entered into Voting and Support Agreements with Parent, agreeing to vote their shares in favor of the merger and against any actions that would impair or delay it, and to refrain from transferring their shares.
• The reporting person, Somasundaram Subramaniam, beneficially owns 4,122,975 shares, representing 5.8% of the common stock, based on 71,358,638 shares outstanding as of November 3, 2025, plus 90,762 shares from vested options.

Sentiment

Score: 8

Explanation: The filing announces a definitive merger agreement where Ventyx Biosciences will be acquired by Eli Lilly for a fixed cash price per share. This provides immediate and certain value to shareholders and equity holders, typically at a premium, which is a strong positive event for investors. The only minor negative is the loss of future independent growth potential.

Positives

• Common stockholders will receive a cash consideration of $14.00 per share, providing immediate liquidity and a premium (assuming the current market price is below $14.00).
• Preferred stockholders will receive a significant cash consideration of $1,400.00 per share.
• Holders of in-the-money stock options and restricted stock units will receive cash payments for their equity awards, providing value realization.
• The merger provides a clear exit strategy and value realization for Ventyx Biosciences shareholders.

Negatives

• The acquisition means Ventyx Biosciences will cease to be an independent publicly traded company, removing future growth potential as a standalone entity.
• Shareholders will no longer participate in any potential upside beyond the $14.00 per share merger consideration.
• Out-of-the-money stock options (exercise price equal to or greater than $14.00) will be cancelled without consideration.

Risks

• The merger is subject to the terms and conditions outlined in the Merger Agreement, implying potential for non-completion if conditions are not met.
• The Voting and Support Agreement includes restrictions on transferring Subject Shares, limiting the reporting person's flexibility until the merger's effective time or termination.

Future Outlook

The filing details a definitive merger agreement for Ventyx Biosciences to be acquired by Eli Lilly and Company. This indicates a future where Ventyx Biosciences will operate as a wholly-owned subsidiary of Eli Lilly, ceasing to be an independent public entity. The transaction is expected to close, subject to customary closing conditions.

Industry Context

The acquisition of Ventyx Biosciences by Eli Lilly and Company is consistent with a broader trend in the pharmaceutical and biotechnology industry where larger established companies acquire smaller, innovative biotechs to bolster their pipelines and gain access to new therapeutic areas or technologies. This strategy allows big pharma to externalize R&D risks and quickly integrate promising assets, while providing an exit for biotech investors.

Comparison to Industry Standards

• The acquisition price of $14.00 per common share would need to be compared to Ventyx's trading price prior to the announcement to assess the premium offered. Typically, acquisitions in the biotech sector involve a significant premium over the pre-announcement share price to incentivize shareholder approval.
• Eli Lilly's acquisition strategy aligns with industry leaders like Pfizer, Johnson & Johnson, and Roche, who frequently engage in M&A to expand their portfolios, particularly in high-growth areas such as immunology, oncology, and neuroscience, which Ventyx's pipeline may address.
• The structure of the deal, offering cash consideration for shares and equity awards, is a standard approach for such transactions, providing certainty and liquidity to target company stakeholders.

Corporate Governance

Related Party Transactions

• The filing details the beneficial ownership of Somasundaram Subramaniam through various affiliated entities (NSV Investments I, L.P., NSV Partners II, LLC, NSV Partners III, L.P., NSV Partners III GP, LLC, New Science Ventures, LLC), indicating a network of related parties involved in the beneficial ownership and voting agreements.

Stakeholder Impact

• Shareholders: Common and preferred shareholders will receive a fixed cash payment for their shares, providing immediate liquidity and value realization.
• Equity Award Holders: Employees and other holders of stock options and RSUs will receive cash payments for their vested and in-the-money awards.
• Employees: While not explicitly detailed, mergers often lead to integration efforts that can impact employee roles and structures within the acquired company.
• Eli Lilly and Company: Will acquire Ventyx Biosciences, expanding its pipeline and market presence.

Next Steps

• The merger will proceed, with Merger Sub merging into Ventyx Biosciences, making Ventyx a wholly-owned subsidiary of Eli Lilly.
• The terms of the Merger Agreement will be executed, leading to the conversion of Ventyx's common and preferred stock into cash.
• Outstanding stock options and restricted stock units will be cancelled and converted into cash payments.
• The Voting and Support Agreements will remain in effect until the effective time of the Merger or termination of the Merger Agreement.

Key Dates

Recommendation

The announcement of a definitive merger agreement where Ventyx Biosciences is being acquired by Eli Lilly for a fixed cash price of $14.00 per common share represents a highly positive and price-sensitive event. Assuming the current market price is below $14.00, investors can purchase shares up to the merger price, expecting a near-term, certain return upon completion of the acquisition. This is a classic arbitrage opportunity, making it a strong buy for investors seeking low-risk, short-term gains, provided the merger is highly likely to close.

Keywords

Ventyx Biosciences, Eli Lilly, Merger Agreement, Acquisition, Common Stock, Preferred Stock, Stock Options, RSUs, Cash Consideration, Schedule 13D, Biotechnology, Pharmaceuticals, Corporate Governance, Shareholder Agreement