Eli Lilly to acquire Merida Biosciences for up to $2.88bn in autoimmune push

Eli Lilly (LLY) has agreed to acquire privately held Merida Biosciences for up to $2.88bn in cash, bolstering its immunology pipeline with an experimental treatment for thyroid-related autoimmune conditions as the company accelerates its push beyond weight-loss drugs.

The transaction, which Lilly expects to close in the fourth quarter, comprises an upfront payment and contingent milestone payments, though the breakdown was not disclosed. The deal marks the latest in a series of acquisitions Lilly has pursued following windfall profits from its obesity franchise, with deal spending in 2026 already exceeding that of prior years.

Merida is developing a class of precision therapeutics designed to selectively target antibodies responsible for a range of immune-mediated conditions. Its lead candidate, MER511, is in early-stage development for Graves' disease — in which an overactive thyroid gland produces excess hormone — and thyroid eye disease, a condition that can cause inflammation, eye bulging, double vision and vision impairment. Initial data showed MER511 substantially reduced thyroid-stimulating antibodies linked to both diseases while demonstrating a favorable early safety profile.

Current treatments for Graves' disease include antithyroid medications, radioactive iodine and surgery. Two FDA-approved therapies exist for thyroid eye disease: Amgen's (AMGN) Tepezza and Viridian Therapeutics' (VRDN) Lumvoa.

"We're building our pipeline around therapies that meaningfully change the course of disease, not just its downstream effects," said Francisco Ramírez-Valle, senior vice president of immunology research and early clinical development at Lilly. "Merida's lead program is designed to do exactly that."

Merida's pipeline also includes MER769, an experimental treatment for food allergy, asthma and other allergic diseases, alongside earlier-stage programs targeting kidney and other immune-mediated conditions.

David Risinger, analyst at Leerink Partners, said the acquisition represents further evidence of management's intent to diversify Lilly's pipeline beyond obesity.