Eli Lilly & Co. agreed to buy U.S. gut-drug maker Morphic Holding Inc. for about US$3.2 billion, plowing some of the proceeds from obesity blockbuster Zepbound into its experimental pipeline.
Lilly will pay $57 a share in cash for Waltham, Massachusetts-based Morphic, or 79 per cent more than the closing price Friday, the companies said in a statement Monday. Morphic’s board recommends that stockholders tender their shares in the offer.
Immunology is a core area for Lilly, whose Chief Executive Officer Dave Ricks has promised more early-stage deals to acquire new technologies. For Morphic shareholders, the takeover is a turnaround after disappointing data in a clinical trial led to a selloff last September.
Morphic’s shares soared 75 per cent to $55.78, the highest price since September. The company climbed 10 per cent this year prior to the deal being announced. Lilly’s shares rose less than 1 per cent.
Morphic is developing a so-called selective oral small molecule inhibitor for the treatment of inflammatory bowel disease. The U.S. biotech’s most advanced experimental compound is being studied in three mid-stage clinical trials, two in ulcerative colitis and one in Crohn’s disease. Lilly is already active in the area, winning U.S. Food and Drug Administration approval last year for its Omvoh injection for ulcerative colitis.
Pills like the one Morphic is developing could help doctors treat patients with diseases like ulcerative colitis earlier and also potentially allow for combination treatment for people who are sicker, Daniel Skovronsky, Lilly’s chief scientific officer, said in a statement.
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