United States – In a similar announcement, Eli Lilly (LLY. N) committed to purchasing Morphic Holding (MORF. O) for USD 3.2 billion in cash, the companies said on Monday, strengthening its position in the multi-billion dollar market as it adds to the range of inflammatory bowel disease (IBD) drugs it owns.
Morphic’s Stock Surges on Acquisition News
The stock of Morphic, Waltham, Massachusetts-based, increased almost 75% to USD 55.62 in morning trading on Lilly’s proposal to acquire the company for USD 57 per share, which is 79% more than its prior day closing price, as reported by Reuters.
With the acquisition, Lilly will acquire a new IBD therapy that is still in development, and it will give patients an easier way to administer the drug compared to using injections, as is the case with other IBD drugs such as Omvoh, which the company launched last year.
Competitive IBD Market
Lilly is not alone as other pharmaceutical firms like Abbvie Inc (ABBV. N), Pfizer (PFE. N), and Johnson & Johnson (JNJ. N) are vying for a slice of the bowel disease market.
For instance, Lilly expects Omvoh to be among the growth drivers in the future, in addition to the popular weight loss treatment, Zepbound, and the new Mounjaro diabetes medicine.
Focus on MORF-057
Morphic’s principal drug candidate is MORF-057, which is in mid-stage three trials for two bowel diseases, namely ulcerative colitis and Crohn’s disease.
Morphic is also in the process of developing other drugs, which are undergoing trials either on animal or test tubes, for autoimmune diseases, pulmonary hypertensive diseases, fibrotic diseases, or cancers.
The companies predict that the acquisition will be complete by the third quarter of the year 2024.
Seigerman added that the deal aligns with Lilly’s proposed strategy of moving away from obesity treatments and joining a series of recent “bolt-on” acquisitions for the company, all of which value at below USD 10 billion, as reported by Reuters.
The morphic deal follows a series of acquisitions in the past year, such as the USD 2.4 bn takeover of Dice Therapeutics and the USD 1.4 bn deal signed with Point Biopharma Global.