Eli Lilly and Company (Lilly) has agreed to acquire Morphic Holding, a biopharmaceutical company developing oral integrin therapies for serious chronic diseases, for $3.2bn in cash.
Under the terms of the acquisition, Lilly will launch a tender offer to acquire all outstanding shares of Morphic for a purchase price of $57 per share in cash, at closing.
The transaction, approved by the boards of directors of both companies, is expected to close in the third quarter of this year.
Its closing is subject to certain customary conditions, including the tender of a majority of the outstanding shares of Morphic’s common stock.
Through the acquisition, Lilly will get an experimental oral IBD treatment with a more convenient dosing option, including Morphic’s IBD drug Omvoh, which was approved last year.
Lilly chief scientific officer, Lilly Research Laboratories and president, and Lilly Immunology president Daniel Skovronsky said: “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.
“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.”
Morphic is a biopharmaceutical company that develops oral integrin therapies for serious chronic diseases such as autoimmune, cardiovascular, metabolic diseases, fibrosis, and cancer.
The company is advancing its pipeline by partnering with Schrödinger, for its unique MInT technology platform that uses Morphic’s understanding of integrin structure and biology.
Morphic’s lead program, MORF-057, is a selective oral small molecule inhibitor of α4β7 integrin for the treatment of inflammatory bowel disease (IBD).
The drug candidate is being evaluated in two Phase 2 studies in ulcerative colitis and one Phase 2 study in Crohn’s disease.
In addition, the company is also developing a preclinical pipeline of other molecules for autoimmune diseases, pulmonary hypertensive diseases, fibrotic diseases and cancer.
Citi served as exclusive financial advisor and Kirkland & Ellis as legal counsel to Lilly, while Centerview Partners served as exclusive financial advisor to Morphic on the transaction.
Evercore Group served as an advisor and Fenwick & West is acting as legal counsel to Morphic.
Morphic Therapeutic CEO Praveen Tipirneni said: “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.
“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.”
