Lilly Acquires Morphic to Enhance Inflammatory Bowel Disease Treatment

Eli Lilly and Company has successfully acquired Morphic Holding, Inc., a biopharmaceutical enterprise known for developing oral integrin therapies aimed at treating severe chronic illnesses. This acquisition, which includes the selective oral small molecule inhibitor MORF-057 for inflammatory bowel disease (IBD), significantly enhances Lilly’s immunology pipeline and strengthens their strategy to provide leading therapies in gastroenterology.

Daniel Skovronsky, M.D., Ph.D., chief scientific officer of Lilly and president of Lilly Research Laboratories and Lilly Immunology, emphasized the company’s commitment to innovative treatments for immunologic diseases. He noted that Morphic’s pipeline could improve patient outcomes and expand treatment options for conditions like IBD. The acquisition also builds on Lilly's existing gastroenterology capabilities, complementing Omvoh, their first-in-class molecule approved for ulcerative colitis and under review for Crohn’s disease. This move is seen as a step towards potential combination treatments that could surpass current available medications.

The acquisition process commenced with Lilly's tender offer to purchase all outstanding shares of Morphic at $57 per share, net to the stockholder in cash, without interest and subject to applicable tax withholding. This offer expired on Aug. 15, 2024, with 46,731,511 shares, representing approximately 92.8% of Morphic’s issued and outstanding shares, validly tendered and accepted for payment. Following this, Lilly completed the acquisition through a second-step merger, leading to the delisting of Morphic's common stock from The Nasdaq Global Market.

Citi acted as Lilly’s exclusive financial advisor, with Kirkland & Ellis LLP providing legal counsel. For Morphic, Centerview Partners LLC served as the exclusive financial advisor, with additional advice from Evercore Group L.L.C., and legal counsel from Fenwick & West LLP.

Omvoh (mirikizumab-mrkz), one of Lilly’s notable treatments, is an interleukin-23p19 antagonist indicated for moderately to severely active ulcerative colitis in adults. It targets the IL-23 pathway, crucial in the pathogenesis of ulcerative colitis, offering a treatment regimen that includes initial IV infusions followed by subcutaneous injections for maintenance. Despite its therapeutic benefits, Omvoh carries risks of hypersensitivity reactions, increased infection susceptibility, potential hepatotoxicity, and requires careful consideration regarding vaccinations.

Lilly, a company dedicated to transforming scientific discoveries into medicinal solutions, has been a pioneer in the pharmaceutical industry for nearly 150 years. Their innovations have significantly impacted global health, particularly in areas such as diabetes care, obesity treatment, Alzheimer’s disease, immune system disorders, and cancer management. Lilly remains committed to making their treatments accessible and affordable, and their diverse clinical trials aim to reflect the global population they serve.

The acquisition of Morphic underscores Lilly's strategic intent to enhance their therapeutic offerings and solidify their position in the gastroenterology sector, ultimately aiming to improve patient care and expand treatment possibilities for chronic gastroenterological diseases.