Eli Lilly has once again returned to the M&A table, striking a $2.875bn agreement to buy autoimmune and allergic disease drug developer Merida Biosciences.
The deal for Merida, which includes upfront and milestone payments, sees Lilly bolster its pipeline with biologics engineered to selectively degrade pathogenic autoantibodies, the disease-causing agents behind a range of immune-mediated conditions.
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Merida’s lead programme, MER511, is in Phase I development for Graves’ disease and thyroid eye disease (TED), conditions driven by thyroid-stimulating immunoglobulins, which are autoantibodies that activate the thyroid-stimulating hormone receptor. The trial (NCT07305818) began in December last year, with patients receiving intravenous or subcutaneous doses of the candidate.
Graves’ disease affects approximately 3 million people in the US, with roughly 25% to 40% of patients going on to develop TED. While there are approved treatments for Graves’, such as the thionamide methimazole, none directly target the autoantibodies that cause them. Merida’s technology aims to address the biological cause of diseases without disrupting healthy processes.
According to the biotech, its platform has applications beyond just Graves’ disease and TED. Its pipeline also includes MER769, a preclinical programme focused on food allergy, asthma, chronic spontaneous urticaria and other diseases driven by the antibody responsible for triggering allergic reactions, as well as earlier-stage programmes in kidney diseases.
“Merida was founded to fundamentally change how autoimmune and allergic diseases are treated, by targeting the antibodies driving them directly, rather than suppressing the immune system broadly,” said Merida’s CEO Adam Townsend in a statement.
The deal marks a fast exit for Merida that only in April last year exited stealth with a $121m Series A.
For Lilly, it marks an autoimmune bolstering of its pipeline that has already undergone significant strengthening this year. With plenty of cash to burn on account of surging sales for its weight loss therapies, the big pharma company has now inked more than a dozen acquisition agreements in 2026. The latest of these was its $2.8bn takeover of psychedelic biotech AtaiBeckley, with Merdia continuing Lilly’s streak of striking an acquisition in nearly every month of the year so far.
In a research note following the deal’s announcement, Citi analysts commented: “We think Lilly’s acquisition of Merida expands its immunology toolkit beyond immune modulation and into selective elimination of disease-causing antibodies, an approach we view as both scientifically differentiated and potentially applicable across multiple autoimmune and allergic diseases.
“Lilly is continuing to build immunology as a long-term growth pillar, with Merida offering exposure to diseases where directly removing pathogenic antibodies could ultimately prove more durable and targeted than broad immunosuppression.”
