09:06 AM EDT, 07/08/2024 (MT Newswires) -- Eli Lilly ( LLY ) will buy biopharmaceutical company Morphic ( MORF ) for roughly $3.2 billion in a bid to expand its immunology portfolio with oral therapies targeting cell proteins for chronic diseases.

The drugmaker will launch a tender offer to acquire all outstanding shares of Morphic ( MORF ) for $57 a share, a premium of about 79% to the latter's closing price on Friday, according to a joint statement by the companies. Morphic ( MORF ) shares surged 75% in premarket activity, while Eli Lilly ( LLY ) edged up 0.3%.

Morphic ( MORF ) is currently evaluating its lead therapeutic candidate, MORF-057, for inflammatory bowel disease in two clinical studies involving ulcerative colitis and one trial in Crohn's disease. The company is also developing a preclinical pipeline of other molecules for the treatment of autoimmune diseases, pulmonary hypertensive diseases, fibrotic diseases and cancer.

"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 Daniel Skovronsky, chief scientific officer of Eli Lilly ( LLY ). "This strategic transaction reinforces our commitment to developing new therapies in the field of gastroenterology."

The transaction, which requires the tender of a majority of Morphic's ( MORF ) shares, is expected to be complete in the third quarter. It's not subject to any financing conditions and both boards have approved it, the companies said.

"Morphic ( MORF ) has always believed that the immense potential of MORF-057 to benefit patients suffering from (inflammatory bowel disease) could be optimized by the ideal strategic partner," Morphic ( MORF ) Chief Executive Praveen Tipirneni said in the statement. "We eagerly anticipate the path forward for MORF-057 and other integrin medicines under Lilly's stewardship."

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