Eli Lilly Strikes Deal to Acquire Morphic for $3.2 Billion

Image Credit: Adobe Stock Images/Dennis

Eli Lilly and Company has reached a definitive agreement to acquire Morphic Holding, Inc., a biopharmaceutical company specializing in oral integrin therapies for chronic diseases. The deal includes MORF-057, Morphic’s lead drug candidate that is currently in a Phase II study for ulcerative colitis and Crohn disease. Classified as a selective, oral small molecule inhibitor of α4β7 integrin, the company stated that the treatment has significant potential in improving outcomes and expanding treatment options for patients.¹

"Oral therapies could open up new possibilities for earlier intervention in diseases like ulcerative colitis, and also provide the potential for combination therapy to help patients with more severe disease," said Daniel Skovronsky, MD, PhD, chief scientific officer, Lilly, president, Lilly Research Laboratories, president, Lilly Immunology, in a press release. "We are eager to welcome Morphic colleagues to Lilly as this strategic transaction reinforces our commitment to developing new therapies in the field of gastroenterology, where Lilly has made significant investments to deliver first-in-class molecules for the benefit of patients."

Under terms of the deal, Lilly is expected to present an offer to acquire all outstanding shares of Morphic for an estimated total of $3.2 billion, with the transaction already approved by the board of directors of both companies. At closing, the purchase price was at a premium of approximately 79.0% to the closing stock price on July 5, 2024, and 87.2% to the 30-day volume-weighted average trading price of Morphic's common stock ended on July 5, 2024, the last trading day before the announcement of the transaction.¹

MORF-057 has shown promise in advancing the treatment of inflammatory bowel disease (IBD). Current IBD treatments include anti-inflammatory drugs, immune system suppressors, biologics, antibiotics, pain relievers, vitamins, nutritional support, and surgery for ulcerative colitis or Crohn disease.²

“The goal of inflammatory bowel disease treatment is to reduce the inflammation that triggers your signs and symptoms,” reports the Mayo Clinic. “In the best cases, this may lead not only to symptom relief but also to long-term remission and reduced risks of complications. IBD treatment usually involves either drug therapy or surgery.”

IBD can lead to colon cancer, toxic megacolon, and can result in a perforated bowel. It can also increase the risk of comorbidities, such as anemia, blood clots, eye pain, kidney stones, mouth sores, liver diseases such as cirrhosis, swollen joints, malnutrition, malabsorption, skin sores, and osteoporosis.³

"Morphic has always believed that the immense potential of MORF-057 to benefit patients suffering from IBD could be optimized by the ideal strategic partner. Lilly brings unparalleled resources and commitment to the inflammation and immunology field," said Praveen Tipirneni, MD, CEO, Morphic Therapeutic, in the press release. "We built the Morphic Integrin Technology platform to realize the vast opportunity of integrin therapeutics. MORF-057 is a tremendous example of those efforts, an oral small molecule α4β7 inhibitor with the potential to be well tolerated and efficacious, attributes that could unlock new possibilities in IBD treatment. My deepest thanks go to the entire Morphic Team for their expertise, creativity and tenacity. We are also grateful to the investigators and patients who have contributed to the success of MORF-057 thus far, and we eagerly anticipate the path forward for MORF-057 and other integrin medicines under Lilly's stewardship."

References

1. Lilly to Acquire Morphic to Improve Outcomes for Patients with Inflammatory Bowel Disease. Lilly. July 8, 2024. Accessed July 9, 2024. https://investor.lilly.com/news-releases/news-release-details/lilly-acquire-morphic-improve-outcomes-patients-inflammatory

2. Inflammatory bowel disease (IBD). Mayo Clinic. Accessed July 9, 2024. https://www.mayoclinic.org/diseases-conditions/inflammatory-bowel-disease/diagnosis-treatment/drc-20353320

3. Inflammatory Bowel Disease (Overview). Cleveland Clinic. Accessed July 9, 2024. https://my.clevelandclinic.org/health/diseases/15587-inflammatory-bowel-disease-overview