US pharmaceutical company Eli Lilly and Company (NYSE: LLY) on Monday announced that it has agreed to acquire Merida Biosciences, Inc., a biotechnology business developing precision biologics for autoimmune and allergic diseases.

The transaction, valued at up to USD2.875bn in cash including contingent milestone payments, is expected to close in the fourth quarter of 2026 subject to regulatory approvals.

Merida engineers biologics that selectively degrade pathogenic autoantibodies, aiming to address the underlying drivers of immune-mediated conditions rather than broadly suppressing immune activity. Its lead programme, MER511, is in Phase 1 trials for Graves' disease and thyroid eye disease, both caused by thyroid-stimulating immunoglobulins. Initial Phase 1 data show MER511 achieved strong reductions in these antibodies with a favourable early safety profile.

Graves' disease affects around 3 million people in the US, with elevated cardiovascular risk and mortality, while 25–40% of patients develop thyroid eye disease, which can lead to pain, disfigurement and, in severe cases, vision loss. Existing treatments do not directly target the autoantibodies responsible for either condition.

Lilly will determine the accounting treatment of the deal under GAAP upon closing, after which the transaction will be reflected in its financial results and guidance.