Lilly agrees to buy US drugmaker Morphic in US$3.2 billion deal

ELI Lilly & Co agreed to buy US gut-drug maker Morphic Holding for about US$3.2 billion, ploughing some of the proceeds from obesity blockbuster Zepbound into its experimental pipeline. 

Lilly will pay US$57 a share in cash for Waltham, Massachusetts-based Morphic, or 79 per cent more than the closing price on Friday, the companies said in a statement on Monday (Jul 8). 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 sell-off last September. 

Morphic is developing a so-called selective oral small molecule inhibitor for the treatment of inflammatory bowel disease. The US 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 US 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 such as 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. BLOOMBERG