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Eli Lilly and Co. said Monday it has agreed to buy a Massachusetts-based biopharmaceutical company that is developing therapies for inflammatory bowel disease and other chronic diseases for $3.2 billion.
Indianapolis-based Lilly said it will acquire Morphic Holding Inc., a nine-year old, publicly traded company that is developing a class of drugs known as oral integrin therapies to treat autoimmune diseases, pulmonary hypertensive diseases, fibrotic diseases and cancer.
Lilly will pay $57 per share in cash, or about $3.2 billion in the deal. The purchase price represents a premium of approximately 79% to Morphic’s closing stock price on July 5.
The transaction has been approved by the boards of directors of both companies.
Shares of Lilly edged up $1.43 in premarket trading Monday, to $916 each. Shares of Morphic, based in Waltham, Massachusetts, jumped 77%, to $56.45.
Morphic’s lead program is an oral treatment for inflammatory bowel disease that the companies said has the potential to improve outcomes and expand treatment options for patients. The molecule, known as MORF-057, is being evaluated in two Phase 2 studies for ulcerative colitis and one Phase 2 study for Crohn’s disease.
For Lilly, the deal will help expand their platform of autoimmune treatments. Last fall, the Food and Drug Administration approved a Lilly drug called Omvoh for the treatment of moderately to severely active ulcerative colitis, a chronic inflammatory bowel disease, for adults.
“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,” said Dr. Daniel Skovronsky, president of Lilly Research Laboratories.
Morphic officials said the deal would help them develop and sell their pipeline products through Lilly’s huge research and marketing network.
“Lilly brings unparalleled resources and commitment to the inflammation and immunology field,” said Dr. Praveen Tipirneni, CEO of Morphic.
The deal is expected to close in the third quarter.
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