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A contingent value right (CVR) is a contractual instrument issued by an acquiring company to the shareholders of a target company, granting them the right to receive additional cash payments if specific future milestones are achieved after a merger closes. The initial deal price is paid at closing. The CVR pays out later, only if the agreed conditions are met. Think of it like a deferred bonus tied to the performance of what you just sold.
CVRs have surged in popularity. According to Deal Point Data, 27 completed or pending U.S. transactions included a CVR in 2025, compared to only 7 in 2024 and 9 in 2022. In biotech deals worth more than $500 million, CVRs accounted for an average of 37% of total deal consideration in 2025, according to Jefferies.
CVRs solve a common valuation problem in M&A: the buyer and seller disagree on what an asset is worth. The buyer refuses to pay for uncertain future outcomes. The seller believes those outcomes are likely and does not want to leave value on the table. A CVR bridges that gap by making part of the purchase price contingent on whether the seller's optimism turns out to be justified.
This is why CVRs are most common in pharmaceutical transactions. Drug development is binary: a compound either wins regulatory approval or it does not. Neither party can know the outcome at signing. The CVR lets the deal close at a price both sides accept, with the seller retaining upside exposure to the clinical and regulatory outcomes they believe in.
Every CVR agreement defines specific, measurable trigger events that activate payment. Common milestone types include:
Real examples from 2025 include Pfizer's acquisition of Metsera, which included a CVR tied to three specific clinical and regulatory milestones. Eli Lilly's bid for Adverum Biotechnologies carried a CVR worth 2.5 times the upfront price of $3.56 per share. Sanofi's $9.5 billion acquisition of Blueprint Medicines offered $129 per share at closing plus a CVR worth up to $6 per share tied to two milestones for BLU-808 through 2032.
CVRs have specific structural features that affect how you value and evaluate them.
While CVRs originated in biotech, they are increasingly appearing in other industries. Blackstone and TPG used a CVR structure in their $18.3 billion buyout of Hologic, a women's health company, in 2025. Technology and consumer deals have also started incorporating CVR-like earnout features as deal volume has increased in markets where valuations are uncertain.
With deep roots in traditional finance and the digital asset industry, Acquire.Fi operates as a specialist M&A advisory firm. Coverage spans M&A, secondaries, OTC, and capital markets advisory across digital assets and frontier tech. Our team has decades of combined experience across every stage of the deal lifecycle.
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