Eli Lilly Shows Appetite for Oral Immunology Drugs, Swallowing Morphic in $3.2B Deal

July 10, 2024  Source: drugdu 44

Eli Lilly’s Morphic acquisition brings an oral small molecule that blocks the same target as Entvyio, an injectable inflammatory bowel disease drug from Takeda Pharmaceutical. The Morphic deal follows Lilly’s 2023 acquisition of Dice Therapeutics, another company developing oral immunology medications.

By Frank Vinluan"/Eli Lilly has immunology and inflammation products administered by injection, but the pharmaceutical giant is among the companies interested in bringing patients more convenient pill formulations. Its $3.2 billion acquisition of Morphic comes with a lead drug candidate that’s an oral small molecule in mid-stage development for inflammatory bowel disease.
According to deal terms announced Monday, Lilly is paying $57 in cash for each share of Waltham, Massachusetts-based Morphic. That price represents a 79% premium to Morphic’s closing stock price on Friday. The deal, which has been approved by the boards of directors of both companies, is expected to close in the third quarter of this year.
Morphic’s research focuses on integrins, which are receptors that play a role in regulating biological processes such as cell proliferation, tissue repair, and inflammation. The integrin-targeting drugs currently available are large molecules that must be injected. Morphic’s technology platform develops integrin-targeting small molecules formulated as pills.
Lead Morphic program MORF-057 is a small molecule designed to block an integrin called alpha 4 beta 7. That target is currently addressed by Takeda Pharmaceutical’s blockbuster product Entyvio, an injectable antibody drug whose approved uses span two forms of inflammatory bowel disease (IBD), ulcerative colitis and Crohn’s disease. Morphic is testing its lead program in in two Phase 2 clinical trials in ulcerative colitis and one Phase 2 study in Crohn’s disease. Data from the ulcerative colitis studies are expected in the first half of next year.
Lilly’s portfolio has a relatively new ulcerative colitis drug. The antibody mirikizumab, brand name Omvoh, won FDA approval last fall. This drug is currently in late-stage development in Crohn’s. But the pharma giant had previously demonstrated interest in oral drugs for immunology. Last year, Lilly paid $2.4 billion to acquire Dice Therapeutics, a clinical-stage company with a platform technology for discovering oral small molecules capable of drugging the same targets as infused or injected biological medications.
The Lilly pipeline currently lists two programs from Dice: DC-806 (now renamed LY4100504) in Phase 2 development for psoriasis and DC-853 in Phase 1 testing for autoimmune diseases. Both drugs are small molecules designed to block IL-17, a signaling protein involved in several inflammatory disorders, including IBD. With biologic medications already in hand and small molecules from Dice and Morphic in clinical development, the door is open to potential drug combinations that bring multiple mechanisms of action to IBD.
“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,” Lilly Chief Scientific Officer Daniel Skovronsky said in a prepared statement.
Dice’s pipeline had included a preclinical oral small molecule inhibitor of alpha 4 beta 7. In a note sent to investors Monday, Leerink Partners analyst Thomas Smith noted that no oral integrin inhibitors from Dice have advanced to the clinic yet. But he added that Lilly striking the deal for Morphic ahead of MORF-057’s Phase 2 data readout speaks to the pharma giant’s confidence in the molecule’s clinical profile and commercial opportunity to offer a safe and effective oral IBD therapy. Smith said the risk of the Federal Trade Commission opposing the Morphic acquisition is low due to limited direct overlap of the biotech’s programs with Lilly’s. Following the Dice deal, Smith sees the Morphic acquisition continuing Lilly’s strategy of acquiring and developing oral drugs for targets that have been clinically and commercially validated by biologic medications.
“We believe [Lilly’s] addition of MORF-057 represents a meaningful expansion into the IBD space, where well-tolerated and clinically effective oral therapies are expected to become useful options across the treatment paradigm,” Smith said.
The Lilly pipeline has another oral immunology drug from a different deal. Ocadusertib, a RIPK1-targeting small molecule from an alliance with Rigel Pharmaceuticals, is in Phase 2 testing in rheumatoid arthritis.
Photo: maxsattana, Getty Images

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