Eli Lilly Buys Bowel Disease Drug Developer Morphic In $3.2 Billion Deal

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Eli Lilly And Company In Madrid

The biotech firm is developing therapies for serious chronic diseases

Eli Lilly will acquire biopharmaceutical firm Morphic Holding in a deal valued at $3.2 billion, both companies announced Monday, a transaction that includes an experimental medication for inflammatory bowel disease and treatments for other chronic diseases.


KEY FACTS

Lilly will pay $57 a share in cash for Morphic, roughly 79% more than the company’s closing price on Friday, Eli Lilly and Morphic said in a statement.

Morphic is developing a treatment for IBD that is being studied in three mid-stage clinical trials, including two for patients with ulcerative colitis and another for patients with Crohn’s disease, an autoimmune disease that inflames the digestive tract.

The company is also developing unspecified treatments for other autoimmune diseases, pulmonary hypertensive diseases—affecting blood pressure in the lungs—and cancers, Eli Lilly and Morphic said.

The transaction is expected to close in Eli Lilly’s third quarter this year pending regulatory approval, both companies said, and has already been approved by the boards of both companies.


Shares of Morphic surged 75% Monday morning, as Eli Lilly’s shares rose slightly (0.5%).


3.1 million. That’s the estimated number of adults in the U.S. who have been diagnosed with IBD, including Crohn’s disease and ulcerative colitis, according to the Centers for Disease Control and Prevention. Adults with IBD are also more likely to have other chronic conditions, including heart disease, lung disease and cancer, among others, the CDC said.


KEY BACKGROUND

Morphic’s bowel disease treatment will be the latest provided by Eli Lilly for treating inflammatory bowel disease. Eli Lilly announced last year its medication Omvoh was approved by the Food and Drug Administration for treating adults with moderate-to-severe ulcerative colitis. Morphic has been developing its IBD treatment for years, and shares for the biotech firm plummeted 55% over two days in September after tests for its ulcerative colitis drug underperformed a medication being developed by Takeda Pharmaceutical.

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