(Reuters) – Eli Lilly and Company said on Monday it will acquire Morphek Holdings Inc (NASDAQ:MLS) for $3.2 billion in cash, giving the U.S. drugmaker access to an experimental drug for a type of inflammatory bowel disease.
Shares of drug developer Morphek surged 76% to $56.15 premarket after Lilly’s offer of $57 per share, representing a 79% premium to the stock’s last closing price.
Morphek’s lead drug, MORF-057, is an oral treatment being evaluated in two Phase II studies in patients with ulcerative colitis and one Phase II study in Crohn’s disease.
Ulcerative colitis is a condition in which abnormal immune system reactions cause inflammation and ulcers in the inner lining of the colon, which can lead to diarrhea, blood in the stool, and abdominal pain.
Last year, the FDA approved Lilly’s Omvoh to treat adults with moderately to severely active ulcerative colitis.
The drug is among Lilly’s potential growth drivers this decade, along with its diabetes and obesity drugs, Mounjaro and Zepbound.
Other pharmaceutical companies such as Abbvie Inc, Pfizer Johnson & Johnson (NYSE:) is also vying for a share of the multibillion-dollar gastrointestinal disease market.