Lilly agrees to buy Merida Biosciences for up to $2.88 billion

Eli Lilly said on August 31 that it will acquire Merida Biosciences, a privately held biotech, in a deal worth up to $2.875 billion in cash ^[2][3]. The agreement covers an upfront payment plus milestone payments tied to development progress, though Lilly did not break out the specific amounts ^[2][3]. The companies expect the deal to close in the fourth quarter of 2026, pending regulatory approval ^[1][2].

Merida's lead drug, MER511, is in Phase 1 testing for Graves' disease and thyroid eye disease, two conditions caused by antibodies that mistakenly attack the thyroid-stimulating hormone receptor ^[2][3]. Instead of broadly suppressing the immune system the way many current treatments do, MER511 is designed to selectively find and destroy those specific disease-causing antibodies while leaving the rest of the immune system alone ^[2][3]. Lilly said early Phase 1 data showed the drug substantially lowered levels of the harmful antibodies with a favorable initial safety profile ^[1][2].

Graves' disease affects roughly 3 million people in the United States and raises patients' risk of heart problems and death ^[2][3]. Between 25% and 40% of people with Graves' disease go on to develop thyroid eye disease, which can cause eye pain, bulging, double vision, and in severe cases permanent vision loss ^[2][3]. Two FDA-approved drugs already treat thyroid eye disease — Amgen's Tepezza and Viridian Therapeutics' Lumvoa — but Lilly says none of the current treatments for either condition directly target the antibodies that cause the disease ^[1][3].

Merida's pipeline also includes MER769, an earlier-stage program aimed at food allergy, asthma, and chronic hives, along with programs for kidney disease and other immune conditions ^[2][4]. Lilly's immunology research chief, Francisco Ramírez-Valle, said the company sees potential to use this "precision degradation" approach across a broad range of antibody-driven diseases beyond the initial targets ^[1][2].

Why it matters for patients

This deal does not involve semaglutide, tirzepatide, or orforglipron, and it will not change access to or pricing of Ozempic, Wegovy, Mounjaro, Zepbound, Rybelsus, or Foundayo. But it signals where Lilly's profits from those weight-loss and diabetes drugs are being spent. Reuters reported that Lilly has been on an acquisition spree funded by windfall profits from its GLP-1 medicines, and analysts described the Merida purchase as further evidence that Lilly is diversifying its pipeline beyond obesity and diabetes ^[1][4]. For patients with Graves' disease or thyroid eye disease, the deal means a new experimental treatment approach is moving forward, though it remains in early, Phase 1 testing and is not close to being available. Whether MER511 will prove safe and effective in larger trials, and whether it will eventually reach patients, is not yet known from these sources.

What happens next

The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals ^[1][2]. Once it closes, Lilly will fold Merida's Phase 1 program for MER511 and its earlier-stage pipeline, including MER769 for allergic disease and programs for kidney conditions, into its own immunology research operations ^[2][4]. No specific dates for further clinical trial results were included in these sources. BioSpace noted this is one of several large deals Lilly has made in 2026, following a roughly $3.8 billion deal for AtaiBeckley in psychedelics, a $6.3 billion purchase of Centessa Pharmaceuticals in sleep medicine, and a $7 billion acquisition of Kelonia Therapeutics, with more than $25 billion in business-development spending so far this year ^[4].