Indianapolis-based pharmaceutical giant Eli Lilly is on the verge of expanding its drug repertoire with the acquisition of Morphic, a biopharmaceutical company known for developing oral therapies designed to battle inflammatory bowel diseases, as both companies' boards of directors have signed off on the deal. According to a statement obtained by Fox59, Eli Lilly has agreed to purchase all outstanding shares of Morphic for $57 each, which totals around $3.2 billion.
The transaction, as per the companies' agreement, will be executed through a tender offer, followed by a second-step merger, with the price representing an approximately 79% premium on Morphic's last Friday closing stock price. Lilly seems ready to not just acquire but to also fully integrate their new assets, as Daniel Skovronsky, Lilly's chief scientific officer, remarked in a release, "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.", reported by Fox59.
With this move, Lilly continues to strategically diversify its pharmaceutical portfolio. As BMO analyst Evan Seigerman noted in a Reuters report, the acquisition fits into Lilly's broader effort to beef up its offerings beyond its strong presence in the obesity market. The acquisition is one among several for Lilly, as it follows last year's acquisition spree, which included a $2.4 billion buyout of Dice Therapeutics and a $1.4 billion deal for Point Biopharma Global.
Completing the deal is anticipated by the conclusion of the third quarter of this year, contingent on customary closing conditions. Morphic's stockholders have been encouraged by their board to tender their shares. Financial advisement for the acquisition comes from Citi for Lilly and Centerview Partners LLC for Morphic, with legal counsels being Kirkland & Ellis LLP and Fenwick & West LLP respectively. Lilly will determine its accounting treatment of the transaction, to either be considered as a business combination or an asset acquisition, upon closing and according to Generally Accepted Accounting Principles (GAAP), as reported by the Lilly press release.
