Form 4: Verve Therapeutics Director Cashes Out Stock Options Following Eli Lilly Merger

Verve Therapeutics director Michael F. MacLean's stock options were cancelled and converted to cash and contingent value rights as a result of the merger with Eli Lilly and Company.

Summary

• Michael F. MacLean, a Director of Verve Therapeutics, Inc. (VERV), had his stock options cancelled and converted to cash and contingent value rights (CVRs) due to the merger with Eli Lilly and Company.
• The merger agreement, dated June 16, 2025, stipulated that all outstanding stock options with an exercise price less than $10.50 per share (the "Cash Consideration") were automatically cancelled at the Effective Time of the Merger on July 25, 2025.
• For each cancelled option, the holder received cash equal to the product of (a) the excess of the $10.50 Cash Consideration over the option's exercise price, multiplied by (b) the total number of shares subject to the option.
• Additionally, one non-tradeable contingent value right (CVR) was issued for each share subject to such options, regardless of vesting.
• Specifically, 136,139 stock options with an exercise price of $5.02 per share and 42,200 stock options with an exercise price of $5.73 per share were affected.
• Following these transactions, the reporting person beneficially owns 0 derivative securities related to these options.

Sentiment

Score: 7

Explanation: The sentiment is positive for the reporting person as they received a cash payout for their in-the-money options and contingent value rights, indicating a successful liquidity event due to the merger. However, it's not a 'strong buy' for the company as the company is being acquired.

Positives

• Director Michael F. MacLean received cash for his in-the-money stock options, providing a liquidity event.
• The receipt of contingent value rights (CVRs) offers potential future value based on specific conditions related to the merger.

Negatives

• The options were cancelled, meaning the director no longer holds direct equity exposure through these specific options in the merged entity.

Risks

• The contingent value rights (CVRs) are non-tradeable, limiting liquidity, and their value is dependent on future events or milestones, which may not be achieved.

Future Outlook

The filing indicates that holders of cashed-out stock options also received non-tradeable contingent value rights (CVRs), which represent potential future value dependent on specific conditions related to the merger.

Industry Context

This transaction is a direct consequence of the acquisition of Verve Therapeutics by Eli Lilly and Company, reflecting a common outcome for equity compensation in M&A scenarios within the biotechnology and pharmaceutical sectors. Such mergers often lead to the conversion or cancellation of outstanding stock options and other equity awards.

Stakeholder Impact

• Shareholders: The merger itself would have had a significant impact on shareholders, leading to the acquisition of their shares. This filing specifically details the impact on a director's equity compensation.
• Employees (Option Holders): Employees holding similar stock options would experience a similar cash-out and CVR conversion, providing a liquidity event for their equity compensation.

Next Steps

• The value of the contingent value rights (CVRs) will depend on the achievement of specific future milestones or conditions as outlined in the merger agreement.

Key Dates

Keywords

Verve Therapeutics, Eli Lilly, Merger, Stock Options, Form 4, Insider Transaction, Michael F. MacLean, Contingent Value Rights, VERV