Lilly's Acquisition of Verve Therapeutics: A Turbulent Journey Amid Regulatory Upheaval

In a landmark deal that underscores the volatile nature of the gene editing sector, Eli Lilly has agreed to acquire Verve Therapeutics for $1.3 billion. The merger, announced on June 17, 2025, comes after months of intense negotiations and market turbulence, revealing the complex interplay of regulatory changes, political decisions, and industry dynamics that shape the pharmaceutical landscape.

Regulatory Turmoil and Its Impact

The departure of Peter Marks, former director of the FDA's Center for Biologics Evaluation and Research, in March 2025 sent shockwaves through the biotech industry. Marks' resignation, described by analysts as the industry's "worst fear," triggered a 7% drop in the S&P Biotech ETX (XBI) and a 21% decline in Verve's stock price. This event raised concerns about potential delays in drug candidate approvals and a more negative regulatory outlook for gene editing products.

The upheaval at the FDA extended beyond Marks' departure, with reports of dramatic staffing cuts and a potential shift in the regulatory landscape for CRISPR-based product candidates. These developments cast a shadow over the future of gene editing therapies, including Verve's pipeline.

Political Factors and Market Volatility

The pharmaceutical industry found itself caught in the crossfire of international trade disputes and domestic policy changes. President Donald Trump's announcement of widespread tariff measures in April 2025 sent global markets into turmoil, further stressing biotech companies like Verve, whose shares fell 18% to $3.41 on April 9.

Adding to the industry's challenges, Trump's proposed Most Favored Nation rule, aimed at tying U.S. prescription drug prices to those paid in other countries, caused additional market volatility. The XBI fell 2% and Verve's stock dropped 4% in response to this news in mid-May.

The Deal: A Response to Industry Challenges

Against this backdrop of regulatory uncertainty and market instability, Verve's board recognized the need for substantial capital—between $1.5 billion and $2 billion—to support its candidates through initial launch. The board noted the difficulty of raising such funds in the current environment, characterized by macroeconomic challenges, drug pricing pressures, and uncertainty surrounding coverage for "one-and-done" treatments like gene editing.

Lilly's interest in acquiring Verve, first expressed in November 2024, evolved through several rounds of negotiations. The final agreement, reached on May 23, 2025, consists of an upfront payment of $10.50 per share and a $3 contingent value right (CVR) tied to the dosing of the first patient in a Phase III trial of VERVE-102 for atherosclerotic cardiovascular disease (ASCVD).

This deal reflects both companies' assessment of the challenging landscape facing gene editing firms and represents a strategic move to consolidate resources and expertise in the face of regulatory and market uncertainties.