Eli Lilly's $3.2 Billion Purchase of Morphic to Enhance Chronic Illness Therapies

By Madz Dizon

Jul 08, 2024 08:39 AM EDT

Eli Lilly's $3.2 Billion Purchase of Morphic to Enhance Chronic Illness Therapies
A flag flies above the headquarters campus of Eli Lilly and Company on March 17, 2024 in Indianapolis, Indiana. Lilly, a pharmaceutical company, employs more than 12.000 people in Indianapolis and more than 42,000 worldwide.
(Photo : Scott Olson/Getty Images)

Eli Lilly & Co. has announced its acquisition of US biopharma company Morphic Holding Inc. for approximately $3.2 billion.

This strategic move will enable Eli Lilly to access a range of promising experimental therapies for conditions such as inflammatory bowel disease and other chronic illnesses.

Eli Lily Acquires Morphic Holding Inc. for $3.2 Billion 

In a statement released on Monday, July 8, it was announced that Lilly has agreed to acquire Morphic for $57 per share, representing a significant increase of 79% over the closing price on Friday, July 5. The board of Morphic advises stockholders to consider tendering their shares in the offer, Reuters reported.

Morphic is currently working on the development of a selective oral small molecule inhibitor that shows promise in treating inflammatory bowel disease. The experimental therapy is currently undergoing evaluation in two mid-stage studies for ulcerative colitis, as well as an early-stage trial for Crohn's disease.

Morphic's lead drug, MORF-057, is currently undergoing evaluation in two phase 2 studies involving ulcerative colitis patients, as well as one phase 2 study focusing on Crohn's disease.

Ulcerative colitis is a condition characterized by inflammation and ulcers on the inner lining of the colon. This can result in symptoms such as diarrhea, the presence of blood in the stool, and abdominal pain.

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Morphic Board Urges Stockholders to Participate in Tender Offer 

Meanwhile, Lilly's Omvoh has received approval from the US Food and Drug Administration for the treatment of adults suffering from moderate-to-severe active ulcerative colitis.

Lilly's drug is expected to be a significant contributor to the company's growth in the coming years, along with its diabetes and obesity drugs, Mounjaro and Zepbound. Several pharmaceutical companies, including Abbvie Inc, Pfizer, and Johnson & Johnson, are competing to gain a portion of the lucrative bowel disease market.

According to Yahoo, the transaction is expected to close in the third quarter of 2024, pending customary closing conditions such as the tender of a majority of Morphic's common stock. No financing condition is applicable to this transaction.

After the tender offer is completed, Lilly will proceed with acquiring any remaining shares of Morphic through a second-step merger, offering the same consideration as in the initial tender offer.

The purchase price payable at closing reflects a significant increase compared to the closing stock price on July 5, 2024, and the 30-day volume-weighted average trading price of Morphic's common stock that ended on the same day, just before the transaction was announced.

The board of directors at Morphic strongly advises all stockholders to participate in the tender offer by tendering their shares.

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