Eli Lilly announced Monday it will acquire privately held Merida Biosciences for up to $2.88 billion in cash. The deal includes an upfront payment plus contingent milestone payments, with the transaction expected to close in Q4 2026.
LLY stock dipped 0.3% in premarket trading on the news.
Merida is developing biologic drugs that selectively target harmful antibodies linked to autoimmune and allergic conditions. Its lead candidate, MER511, is in early clinical development for Graves’ disease and thyroid eye disease.
Graves’ disease causes an overactive thyroid to produce excess hormone. Thyroid eye disease can lead to inflammation, eye bulging, double vision, and vision loss.
Lilly said initial data showed MER511 substantially lowered the thyroid-stimulating antibodies tied to both conditions, while showing a favorable early safety profile.
Current treatments for Graves’ disease include antithyroid medications, radioactive iodine, and surgery. Two FDA-approved medicines already exist for thyroid eye disease: Amgen’s Tepezza and Viridian Therapeutics’ Lumvoa.
The Merida deal is Lilly’s latest move to build out its immunology pipeline. In February 2026, Lilly agreed to buy Orna Therapeutics, a developer of B-cell-driven autoimmune therapies, for $2.4 billion in cash.
Merida’s pipeline extends beyond MER511. MER769 is an experimental treatment targeting food allergy, asthma, and other allergic diseases, with earlier-stage programs also covering kidney and immune-mediated conditions.
“Merida’s lead program is designed to do exactly that,” said Francisco Ramirez-Valle, Lilly’s senior vice president of immunology research and early clinical development, referring to therapies that change the course of disease rather than just its effects.
Lilly’s deal activity in 2026 has outpaced prior years. The company closed acquisitions of Kelonia Therapeutics and Ajax Therapeutics in Q2, both building on its blood cancer franchise.
In late June, Lilly completed its biggest deal of the year, acquiring Centessa Pharmaceuticals for $7.8 billion, bringing in treatments for neurological and sleep-wake disorders including narcolepsy.
Total biopharma M&A through early June 2026 reached $106 billion across 201 transactions, according to PitchBook data. Lilly, the largest pharmaceutical company by market cap, has been one of the most active buyers.
The company has been funding its acquisition push largely through revenue generated by its GLP-1 weight-loss drug franchise, as it looks to build growth drivers in areas beyond obesity and diabetes.
The Merida transaction is expected to close in Q4 2026, pending customary closing conditions.
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