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Mergers & Acquisitions

Lilly to pay $3.2 billion for Springer lab spin-out Morphic

Massachusetts biotech is developing small molecules for gastrointestinal disorders

by Rowan Walrath
July 9, 2024

A biotech firm founded by Harvard Medical School chemist and molecular biologist Timothy Springer will become part of Eli Lilly and Company’s R&D pipeline following a $3.2 billion acquisition.

Lilly is slated to buy the Waltham, Massachusetts, start-up Morphic Therapeutic, which spun out of Springer’s lab in 2016. The company develops small molecules that inhibit integrins, proteins found on the surfaces of cells throughout the body that are involved in a range of autoimmune diseases, cancers, and fibrosis.

A headshot of Bruce Rogers, wearing a dark suit and smiling into the camera.
Credit: Morphic Therapeutic
Bruce Rogers is the president of Morphic Therapeutic.

At the heart of the deal is an integrin inhibitor called MORF-057. The compound targets the α4β7 integrin, a glycoprotein expressed on circulating B and T immune cells. The integrin binds to adhesion molecules on certain endothelial cells, including in the gastrointestinal wall (Ther. Adv. Chronic Dis. 2015, DOI: 10.1177/2040622315586970). Morphic is testing MORF-057 in midstage studies for inflammatory bowel disease (IBD), specifically ulcerative colitis and Crohn’s disease.

As drug candidates go, the compound is a relatively sure bet. It has the same mechanism of action as Takeda Pharmaceuticals’ Entyvio, or vedolizumab, which the US Food and Drug Administration approved in 2014 as a treatment for both ulcerative colitis and Crohn’s. But Entyvio is a monoclonal antibody that must beinjected, whereas MORF-057 is an oral treatment, making it a strong potential competitor.

Morphic has been open about its desire to partner with a larger pharmaceutical company to carry MORF-057 through late-stage studies and, should those succeed, regulatory approval and commercialization. Lilly will now shoulder those burdens. It will also continue developing Morphic’s other integrin-targeting molecules, which include potential treatments for other gastrointestinal disorders, myelofibrosis, solid-tumor cancers, and pulmonary hypertensive diseases.

“We believe it is the best path for patients, as Lilly has the scale, resources, global footprint, and approval track record to advance MORF-057—as well as our integrin discovery platform—beyond what we could as a stand-alone company,” Morphic spokesperson Chris Erdman says in an email.

Lilly is among several large pharmaceutical companies seeking to buy or license biotechs and their assets this year following a lull in M&A activity. Novo Nordisk, Johnson & Johnson, and Bayer have all recently signaled their willingness to spend money for the right programs.

For its part, Lilly has been scouting for partnership and acquisition opportunities, particularly in neuroscience, diabetes, immunology, and oncology. Its other recent acquisitions include Akouos, a developer of genetic medicines for hearing loss, and Dice Therapeutics, which is behind oral IL-17 inhibitors for immunological illnesses. Like MORF-057, Dice’s drug candidates are small-molecule versions of biologics with known mechanisms of action, as Leerink Partners stock analyst Thomas Smith points out in a research note.

“Overall, we believe the [Morphic] acquisition is a strong fit for [Lilly],” Smith writes. “[We] see the [Morphic] deal as continuing to build on [Lilly’s] strategy of acquiring and developing oral forms of targets that have been clinically and commercially validated by injectable biologics.”


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