Eli Lilly said Monday it plans to pay $3.2 billion in cash for Morphic Therapeutic, a biotech working on oral integrin drugs for chronic diseases, as the autoimmune space continues to drum up pharma interest.
The Boston-area biotech comes with a broad pipeline of experimental medicines across some of Lilly’s main therapeutic areas, like autoimmune diseases and cancer, and into other domains it has less exposure to, including pulmonary hypertensive diseases and fibrotic diseases.
It marks the first biotech acquisition Lilly has disclosed this year after making a string of deals last year for Dice Therapeutics, Sigilon, Versanis Bio and Point Biopharma. Earlier this year, Lilly bought a healthtech startup called Aparito.
The Monday morning M&A action also marks the return of a public buyout as most pharma acquisitions so far in 2024 have centered on private startups. The deal comes at a 79% premium to Morphic’s Friday closing price and is expected to close this quarter.
Lilly could enter similar territory as Takeda’s blockbuster drug Entyvio as it will get its hands on an α4β7 integrin inhibitor dubbed MORF-057, which is currently in two Phase 2 trials in ulcerative colitis and a mid-stage test in Crohn’s disease. (It’s not clear what will happen with a discovery-stage α4β7 asset Lilly picked up with its $2.4 billion Dice acquisition last June. A Lilly spokesperson couldn’t immediately be reached for comment.)
Research from Morphic founder Timothy Springer helped lead to Entyvio. The integrins legend became a billionaire thanks to his early investing in Moderna. He owns, through various vehicles, about 15% of Morphic, according to an April SEC filing — which would add up to about $480 million. Springer has contributed significant chunks of his wealth to his Institute for Protein Innovation, though didn’t answer a question about any payout on the Morphic deal.
While Morphic has other programs, the α4β7 integrin inhibitor was Lilly’s primary interest, he said.
“The trials for inflammatory bowel disease are very long and a major pharmaceutical partner was always a consideration,” Springer said in an email to Endpoints News on Monday morning. “Lilly’s bid was unexpected. The company was not put up for sale. Lilly only wanted the a4b7 program.”
Morphic also has a preclinical TL1A program. That target has spurred multiple multibillion-dollar pharma deals since early 2023, including Merck’s Prometheus Biosciences deal, Roche’s Telavant acquisition, and Sanofi and Teva’s tie-up, among others.
“Morphic has always believed that the immense potential of MORF-057 to benefit patients suffering from IBD could be optimized by the ideal strategic partner. Lilly brings unparalleled resources and commitment to the inflammation and immunology field,” Morphic CEO Praveen Tipirneni said in a statement.
The biotech had previously been partners with Johnson & Johnson and AbbVie, but both pharma giants backed out of their collaborations.
Lilly already markets immunology drugs like Omvoh. It also has multiple investigational treatments in mid-stage testing for psoriasis, atopic dermatitis, rheumatoid arthritis and other conditions.
Editor’s note: This story has been updated to include an M&A chart and comment from Morphic founder and board member Timothy Springer.
