Eli Lilly & Co. (LLY) has announced that it is buying biopharmaceutical company Morphic Holding (MORF) for $3.2 billion U.S.
Under terms of the deal, Eli Lilly will pay $57 U.S. a share for Morphic stock, representing a 79% premium to the closing price of $31.84 U.S. on July 5.
The deal is expected to close in the third quarter of this year, subject to regulatory approval.
Morphic develops treatments for chronic diseases, specifically inflammatory bowel disease.
This deal is expected to help Eli Lilly expand further into the gastroenterology medical specialty.
Last fall, the U.S. Food and Drug Administration (FDA) approved Eli Lilly’s drug “Omvoh,” which is used to treat ulcerative colitis.
Shares of Morphic were up 75% in premarket trading on news of the acquisition. Prior to today (July 8), the stock had declined 46% over the last 12 months and was trading at $31.84 U.S. per share.
Eli Lilly’s stock has gained 102% in the past year to trade at $914.57 U.S. a share.