By Hannah Green
Eli Lilly and Co. is buying a Waltham biotech in a deal valued at around $3.2 billion.
The startup being acquired is Morphic Holding Inc. (NASDAQ: MORF), a Waltham company working on treatments for chronic diseases such as types of inflammatory bowel disease.
Indianapolis-based Lilly (NYSE: LLY) plans to acquire all outstanding shares of Morphic for $57 per share in cash. The purchase price at closing is a premium of around 79% to the closing stock price on Friday.
The deal is expected to close in the third quarter of 2024.
Morphic came into 2024 with 121 full-time employees and, as of March 31, 2024, had $658.8 million in cash, cash equivalents, and marketable securities.
The acquisition comes after a few hard years for Morphic.
Last year, Morphic’s lead drug, MORF-057, produced less promising than expected data from a midstage study in ulcerative colitis. Morphic said on Monday that MORF-057 is being evaluated in two Phase 2 studies in ulcerative colitis and one Phase 2 study in Crohn’s disease.
Also in 2023, Johnson & Johnson Inc. (NYSE: JNJ) exited its partnership with Morphic, four years after it signed a deal worth up to $725 million for multiple disease areas.
That wasn’t the only major pharma partner that stepped away from the Waltham biotech in recent years.
In 2022, AbbVie Inc. (NYSE: ABBV) pulled out of a partnership centered around a fibrosis drug that the two had been working on since 2018. AbbVie cited safety issues in its decision. The collaboration was worth $100 million when the two companies announced the deal.