WALTHAM, MA—Morphic Holding, Inc. (NASDAQ:MORF), a pharmaceutical company, has been acquired by Eli Lilly and Company (NYSE:LLY), an Indiana corporation, in a transaction that concluded on Friday. The acquisition followed a tender offer for all outstanding shares of Morphic Holding (NASDAQ:MORF) at a price of $57 per share in cash.
The tender offer, which expired on the preceding Thursday, resulted in approximately 92.8% of Morphic's shares being tendered. With the minimum tender condition met, Eli Lilly proceeded to accept payment for the shares. This transaction led to Morphic becoming a wholly owned subsidiary of Eli Lilly.
In connection with the acquisition, Morphic's equity awards were addressed, with certain stock options and restricted stock units being vested and converted into cash rights. Additionally, the company's various stock incentive and equity inducement plans were terminated.
The completion of the acquisition also triggered changes to Morphic's board of directors and executive officers. All previous directors resigned, and new directors and officers, associated with the acquiring entity, were appointed effective immediately.
Furthermore, Morphic notified Nasdaq of the acquisition's completion and requested the suspension of trading and delisting of its common stock. They also intend to deregister the common stock and suspend the company's reporting obligations under the Securities Exchange Act.
The amended and restated certificate of incorporation and bylaws of Morphic Holding, Inc. are now in effect, aligning with the terms of the merger agreement.
In other recent news, Morphic Holding has been the subject of acquisition plans by Eli Lilly and Company, a development that has led to a shift in stock ratings by TD Cowen and RBC Capital.
Both firms downgraded Morphic's stock, TD Cowen from Buy to Hold and RBC Capital from Outperform to Sector Perform, aligning with the proposed acquisition price of $57 per share. This acquisition, valued at approximately $3.2 billion, is expected to be finalized in the third quarter of 2024.
The deal is primarily driven by Eli Lilly's interest in Morphic's lead drug, MORF-057, currently undergoing multiple phase 2 studies for the treatment of ulcerative colitis and Crohn's disease.
This acquisition will expand Eli Lilly's portfolio in the treatment of autoimmune diseases and potentially enhance the treatment landscape for patients with inflammatory bowel disease.
Analysts from both TD Cowen and RBC Capital expect the acquisition to proceed without major antitrust concerns. They believe the deal presents a logical progression for Morphic, bringing together Morphic's expertise with Eli Lilly's resources.
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