Acquisitive Lilly offers $2.88bn for Merida Bio

Eli Lilly has continued its lengthy streak of acquisitions in 2026 with a $2.88 billion agreement to buy immunology and inflammation specialist Merida Biosciences.

If it goes through, the deal will give Lilly rights to a pipeline of therapies headed by MER511 for Graves' disease and thyroid eye disease, both autoimmune diseases leading to an overactive thyroid gland.

The drug – which is designed to block the binding of the autoantibodies to thyroid-stimulating hormone receptors (TSHR) – has generated preliminary phase 1 clinical data that back up its proposed mechanism of action and point to a promising safety profile.

Graves' disease causes the thyroid to become overactive and leads to weight loss, irritability, and fatigue, while TED is a related condition characterised by swelling of the muscles and fat tissue behind the eyes, leading to proptosis, where the eyeball moves forward. Up to 40% of patients with Graves' disease will also develop TED.

Other programmes at Cambridge, Massachusetts-based Merida are focused on allergy and primary membranous nephropathy, a chronic autoimmune disease that affects the kidneys, and are also targeted at pathogenic autoantibodies. Its second candidate, MER769, is in preclinical testing and is being developed for food allergy, asthma, and chronic spontaneous urticaria (CSU).

Lilly has been spending freely in business development in the last few quarters, with the additions to its pipeline fuelled by cash generated by its fast-growing tirzepatide-based therapies – Mounjaro and Zepbound – for type 2 diabetes and obesity.

The new acquisition is Lilly's ninth since the start of the year, coming just a few weeks after it agreed to buy psychedelic medicines developer AtaiBeckley for up to $3.8 billion. Its spending on M&A is now approaching $29 billion in upfront and milestone payments.

Prior acquisitions include a trio of companies in the infectious diseases arena, obesity and diabetes drug developer Kelonia, sleep disorder specialist Centessa Pharma, in vivo CAR-T therapy developer Orna Therapeutics, and immunology-focused Ventyx Bio.

"We're building our pipeline around therapies that meaningfully change the course of disease, not just its downstream effects," said Francisco Ramírez-Valle, head of Lilly's immunology R&D division.

"We see potential to apply this precision approach across a broad range of antibody-driven diseases, and we look forward to advancing this novel technology working with the Merida team."

Lilly is paying up to $2.875 billion in cash for Merida, including an undisclosed upfront payment and contingent milestone payments, and expects the takeover to complete in the fourth quarter.

Third Rock Ventures-backed Merida raised $121 million in a Series A in April 2025 for its protein engineering platform, used to generate therapeutics based on the Fc region of an antibody that can bind to harmful autoantibodies and mark them for degradation by the liver. The candidates can also target the B cells that produce the autoantibodies, giving long-lasting suppression.