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After surging weight loss drug sales have made it the largest pharmaceutical company in the world, Zepbound maker Eli Lilly has set its sights on tackling treatments for inflammatory bowel disease.
The Indianapolis-based pharma giant announced Monday that it is acquiring Morphic for about $3.2 billion. Morphic, a Massachussetts-based drug maker, is developing oral therapies that target ulcerative colitis and Crohn’s disease, collectively known as inflammatory bowel disease.
The disease is characterized by the chronic inflammation of the gastrointestinal tract. It affects about 3.1 million Americans, according to the Centers for Disease Control and Prevention.
“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 Eli Lilly chief scientific officer Daniel Skovronsky in a press release. “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.”
The deal, which is expected to close in the third quarter of 2024, includes Morphic’s leading drug candidate MORF-057. The treatment is currently in separate phase 2 clinical trials testing its effectiveness at treating ulcerative colitis and Crohn’s disease. Morphic is also developing drugs for the treatment of autoimmune diseases, pulmonary hypertensive diseases, fibrotic diseases and cancer.
As part of the deal, Eli Lilly has agreed to buy all outstanding shares of Morphic for a purchase price of $57 per share in cash — a 79% premium on the stock’s closing price on Friday.
Following the announcement, Morphic stock soared 75% during Monday morning trading.