Shares in Verve Therapeutics (VERV -0.54%) soared 80.5% this week on the news of an agreement for Eli Lilly (LLY -2.65%) to acquire Verve. The deal centers on an exciting cardiovascular health medicine program, VERVE-102.

What is VERVE-102?

It's easy to see why Lilly is excited about the program. VERVE-102 targets the PCSK9 gene, aiming to deactivate it in the liver, and achieves this with a single infusion. Given that PCSK9 binds to low-density lipoprotein (LDL) (often called "bad" cholesterol) receptors and prevents them from recycling to the cell surface, it follows that inhibiting PCSK9 will improve the body's ability to remove bad cholesterol.

The initial results from the phase 1b trial give cause for optimism. According to Verve's press release:

• "VERVE-102 was well-tolerated, with no treatment-related serious adverse events (SAEs) and no clinically significant laboratory abnormalities observed" across 14 patients given three different dose levels.
• Dose dependency was established, with the lowest dose (0.3mg/kg) patients achieving a "mean reduction in blood LDL-C of 21%," rising to 41% at the 0.45mg/kg dose, and 53% at the 0.6mg/kg dose.

Image source: Getty Images.

Terms of the Lilly/Verve agreement

Lilly is offering:

• $10.50 per share for all the outstanding shares
• Plus a nontradable contingent value right (CVR) that pays up to $3 per share upon "the first patient being dosed with VERVE-102 for ASCVD in a U.S. phase 3 clinical trial on or prior to the tenth anniversary of closing or termination of the CVR."

The share price is $11.12 as I write, implying that the market is willing to pay $0.62 for the CVR, suggesting a 21% chance that Lily will take VERVE-102 to a stage 3 trial -- a reasonable assumption for a novel medicine under a major pharmaceutical company.