Lilly Acquires Morphic Holding for $3.2 Billion to Strengthen IBD Pipeline

Jul 09, 2024 18:18 CST Updated 18:18

Morphic Therapeutic

Oral Drug Manufacturers

Eli Lilly

Global Pharmaceutical R&D and Production Company

July 8,Eli Lilly and Company Announces Agreement to Acquire Morphic Holding for $3.2 Billion in Cash to Strengthen Its Inflammatory Bowel Disease (IBD) Drug Portfolio and Expand Its Presence in This Multi-Billion-Dollar Market

According to the agreement, Eli Lilly will acquire Morphic Therapeutic, Inc. at a price of $57 per share in cash, which is higher than the closing price last Friday.Premium of 79%, with a total transaction value of approximately $3.2 billion. The deal is expected to close in Q3 2024.

Following the news, Morphic Therapeutic's stock price surged over 75% to $55.74 after the U.S. market opened, hitting the highest level since September of last year; Eli Lilly and Company’s stock price rose by less than 1%.

Through this deal, Eli Lilly will acquire aExperimental Oral IBD Treatment, including its IBD approved in the United States last yearInjection TherapyTogether with Omvoh, providing patients with a more convenient dosing option.

Compared with traditional injection or infusion treatment methods, oral integrin inhibitors can provide a more convenient and patient-compliant treatment approach.
Eli Lilly will Omvoh, as well as its best-selling weight loss drug Zepbound andDiabetes Drug Mounjaro, TogetherListed as the driving factor for its future performance growth。

IBD refers to two diseases——Crohn's Disease, Ulcerative Colitis, characterized by chronic inflammation of the gastrointestinal tract caused by an abnormal immune response. It is a high-potential field that major pharmaceutical companies are vying for in the autoimmune area.

Besides Eli Lilly, other pharmaceutical companies such as AbbVie, Pfizer, and Johnson & Johnson are also competing for a share of the gastrointestinal disease market.

Data shows that Morphic Therapeutic, Inc. is a biopharmaceutical company developing oral integrin therapies for the treatment of severe chronic diseases.

Its most advanced project is a selective oral α4β7 integrin small molecule inhibitor.（MORF-057）, for the treatment of inflammatory bowel disease (IBD), has the potential to improve patient outcomes and expand treatment options. It is currently being evaluated in two Phase 2 studies for ulcerative colitis and one Phase 2 study for Crohn's disease.

In addition, other drugs are included, which are being tested in animal or test-tube experiments.For autoimmune diseases, pulmonary arterial hypertension, fibrotic diseases, and cancer.

BMO analyst Evan Seigerman said that this transaction aligns with Eli Lilly's diversification plan beyond obesity and complementsThe company's recent series of "supplemental" deals, namely acquisitions below $1 billion。

Before the Morphic Therapeutic deal, Eli Lilly and Company had carried out a series of acquisitions, such as the $2.4 billion acquisition of Dice Therapeutics and the $1.4 billion agreement to acquire Point Biopharma Global.

cr：Lilly beefs up bowel disease drug portfolio with $3.2 bln Morphic deal By Reuters

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