Eli Lilly and Co (NYSE:LLY) said on Monday it will acquire privately held Merida Biosciences for up to $2.88 billion in cash, part of a deal-making push to broaden its treatments for immune-related and allergic diseases.
The acquisition continues a run of dealmaking for Lilly, whose deal spending this year has outpaced prior years as it looks to diversify beyond its blockbuster obesity and diabetes franchises.
The agreement includes an upfront payment and additional amounts tied to milestones, though Lilly did not disclose specific terms.
Merida is developing medicines that selectively target antibodies driving a range of immune-related conditions. Its lead candidate, MER511, is in early-stage development for autoimmune disorders including Graves' disease and thyroid eye disease. Lilly said initial data showed the drug substantially lowered thyroid-stimulating antibodies linked to those conditions, with a favorable early safety profile.
Graves' disease causes the thyroid to produce excess hormone, while thyroid eye disease can lead to inflammation, eye bulging, double vision and impaired vision. Current treatments include antithyroid medications, radioactive iodine and surgery, alongside two FDA-approved drugs for thyroid eye disease, Amgen's Tepezza and Viridian Therapeutics' Lumvoa.
Merida's pipeline also includes MER769, an experimental treatment for food allergy, asthma and other allergic diseases, along with earlier-stage programs targeting kidney and other immune-mediated conditions.
The deal is expected to close in the fourth quarter.
Shares of Lilly were down around 1.7% on Monday morning.