Lilly completes $3.2 billion acquisition of Morphic to add oral IBD drug candidate

Eli Lilly and Company agreed on July 8, 2024 to acquire Morphic Holding, Inc. for $57 a share in cash — about $3.2 billion — to add oral integrin therapies for inflammatory bowel disease (IBD) to its immunology pipeline ^[1]. The transaction closed on Aug. 16, 2024, after a tender offer that brought in roughly 92.8% of Morphic's shares ^[2].

The $57-per-share price represented a premium of approximately 79.0% over Morphic's closing stock price on July 5, 2024, the last trading day before the announcement, and 87.2% over the 30-day volume-weighted average trading price through that date ^[1]. Both boards of directors approved the deal, which was not subject to a financing condition, and Lilly expected it to close in the third quarter of 2024 through a tender offer followed by a second-step merger at the same price ^[1].

The tender offer expired at one minute past 11:59 p.m. Eastern time on Aug. 15, 2024, and was not extended. Computershare advised Lilly that 46,731,511 shares — about 92.8% of the shares outstanding — had been validly tendered and not validly withdrawn ^[2]. Lilly then completed the second-step merger, and Morphic's common stock was delisted from the Nasdaq Global Market ^[2].

What Lilly is buying

Morphic's lead program, MORF-057, is a selective oral small molecule inhibitor of α4β7 integrin being evaluated in two Phase 2 studies in ulcerative colitis and one Phase 2 study in Crohn's disease ^[1]. Morphic is also developing a preclinical pipeline of other molecules for autoimmune diseases, pulmonary hypertensive diseases, fibrotic diseases and cancer ^[1].

Results from the MORF-057 Phase 2 studies have not been reported in the acquisition announcements, and no readout dates were disclosed ^[1][2].

Daniel Skovronsky, M.D., Ph.D., Lilly's chief scientific officer and president of Lilly Research Laboratories and Lilly Immunology, said oral therapies "could open up new possibilities for earlier intervention in diseases like ulcerative colitis" and provide "the potential for combination therapy to help patients with more severe disease" ^[1]. In August he said the acquisition "reinforces our growing capabilities in gastroenterology," building on Omvoh, Lilly's approved ulcerative colitis medicine, and "allows Lilly to research potential combination treatments" ^[2].

Omvoh (mirikizumab-mrkz) is approved in the United States for moderately to severely active ulcerative colitis in adults and was under regulatory review for Crohn's disease as of the August announcement ^[2]. Treatment starts with 300-mg intravenous infusions once every four weeks for a total of three infusions, then moves to two 100-mg subcutaneous injections every four weeks ^[2].

Morphic chief executive Praveen Tipirneni, M.D., said MORF-057 has "the potential to be well tolerated and efficacious" ^[1]. That is a company expectation stated at the time of the deal, not trial data.

Why it matters for patients

MORF-057 is a pill, while several existing IBD treatments are given by infusion or injection. If it works, an oral option could change how treatment fits into daily life — but the announcements include no efficacy or safety results, so whether it works in people with ulcerative colitis or Crohn's disease is not yet known ^[1][2].

This is a business event rather than a clinical one, and it does not change which medicines are available to patients today. The announcements describe Lilly's immunology and gastroenterology work; they do not describe any effect on GLP-1 medicines for diabetes or obesity ^[1][2].

For patients or families following who owns a drug program, the ownership of MORF-057 and Morphic's earlier-stage molecules has now moved from Morphic to Lilly ^[1][2].

What happens next

Because the acquisition has already closed, further milestones rest with Lilly, which said it would continue developing MORF-057 and other integrin medicines under its stewardship ^[1][2]. No dates for Phase 2 results, regulatory submissions or an approval decision have been disclosed ^[1][2]. Lilly said it would determine the accounting treatment of the transaction, including any related acquired in-process research and development charges, at closing ^[1].