LLY - Stifel cuts Morphic to hold doesn't see it as near-term M&A target
2023-08-09 18:43:54 ET
Stifel has downgraded Morphic ( NASDAQ: MORF ) to hold, stating that it believes open-label data for its anti-inflammatory drug candidate MORF-057 isn't enough to score a near-term M&A deal.
Stifel said that while the immunology and inflammation space has been attractive to potential acquirers, it's not convinced that a strategic partner would be willing to strike a deal based on results from a single-arm study.
The investment bank noted that Morphic shares have been trading in the range of several recent takeout targets, such as Dice Therapeutics ( DICE ), which is slated to be acquired by Eli Lilly ( LLY ) for $2.4B.
Stifel said that while it might be wrong about a "strategic" buying Morphic, it finds the thesis "challenging" as the buyer would have to pay more than Lilly did for Dice to hit a comparable premium.
The bank added that it has pushed out its timeline for the launch of MORF-057 to 2029 from 2027 "to better reflect timelines" and lowered its price target to $61 from $69.
Morphic released its Q2 earnings report on Aug. 3.
More on Morphic:
Morphic Holding, Inc. SEC Filing - Quarterly Report (10-Q) August 03, 2023
Morphic: High Valuation Not Justified By Data, Development Status, Or Cash Morphic Therapeutic slumps 6%, prices $240M offering
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Stifel cuts Morphic to hold, doesn't see it as near-term M&A target