Lilly also forecast 2021 revenue to be between $26.5 billion and $28 billion, including sales of about $1 billion to $2 billion from its COVID-19 treatments.
Analysts on average were expecting 2021 sales of $26.47 billion, according to IBES data from Refinitiv.
Lilly said it would acquire Prevail, which develops gene therapies for patients with neurodegenerative diseases such as Parkinson's disease and dementia, for $22.50 per share, a premium of 80% to the stock's Monday close.
Shares of Prevail soared 91.9% in premarket trading on Tuesday, while Lilly's stock rose 2%.
The deal also includes a "contingent value right" worth $4 per share in cash, payable upon the first regulatory approval of a product from Prevail's pipeline.
Several of Prevail's therapies have been granted "fast track" and "orphan drug" tags by the U.S. Food and Drug Administration and the European Commission.
Prevail's lead gene therapies currently in clinical development include those for Parkinson's disease with a type of mutation, neuronopathic Gaucher disease and dementia.
The company's preclinical pipeline includes potential gene therapies for Alzheimer's disease, amyotrophic lateral sclerosis (ALS), and other neurodegenerative disorders, the companies said.
Gene therapies aim to correct diseases by replacing the missing or mutated version of a gene found in a patient's cells with healthy copies, but the treatments are also extremely complex to make, involving the cultivation of living material.