USA—Eli Lilly and Company has agreed to acquire Merida Biosciences, Inc., a biotechnology company developing targeted therapies for autoimmune and allergic diseases, in a deal valued at up to US$2.875 billion.
The acquisition will give Lilly access to Merida’s technology for developing biologics that selectively eliminate disease-causing autoantibodies.
Unlike conventional treatments that broadly suppress the immune system, the approach aims to remove the specific antibodies responsible for driving disease while preserving normal immune function.
Lead programme targets Graves’ disease
Merida’s lead candidate, MER511, is currently in Phase 1 development for Graves’ disease and thyroid eye disease (TED).
Both conditions are associated with thyroid-stimulating immunoglobulins, autoantibodies that activate the thyroid-stimulating hormone receptor.
Graves’ disease affects about 3 million people in the United States and is associated with increased cardiovascular risks.
Meanwhile, about 25% to 40% of people with Graves’ disease develop TED, which can cause eye pain, changes in appearance, and, in severe cases, vision loss.
Although treatments are available for both conditions, none directly targets the autoantibodies that cause them.
Merida is therefore developing MER511 as a more targeted approach to treating the underlying cause of the diseases.
The company is also developing MER769, a preclinical programme targeting food allergy, asthma, chronic spontaneous urticaria and other conditions driven by the antibody responsible for triggering allergic reactions.
Additional early-stage programmes focus on kidney diseases, including membranous nephropathy, as well as other immune-mediated disorders.
Lilly to expand antibody targeting platform
“Merida’s lead programme is designed to selectively and directly eliminate the autoantibodies causing Graves’ disease and thyroid eye disease while preserving normal immune function,” said Francisco Ramírez Valle, M.D., PhD, senior vice president of immunology research and early clinical development at Lilly.
He added that initial Phase 1 findings indicate the potential for improved efficacy and safety and said Lilly plans to explore the technology across other antibody-driven diseases.
Adam Townsend, chief executive officer of Merida, said the company was established to change the treatment of autoimmune and allergic diseases by directly targeting the antibodies responsible for them rather than broadly suppressing the immune system.
He credited Merida’s chief scientific officer and founder, Dario Gutierrez, and the company’s team with advancing the technology from an initial concept to clinical development.
Deal expected to close in fourth quarter
Under the agreement, Lilly will acquire Merida for up to US$2.875 billion in cash, comprising an upfront payment and contingent milestone payments.
The transaction remains subject to customary closing conditions, including regulatory approvals, and Lilly expects it to close in the fourth quarter of 2026.
The company will determine the accounting treatment under generally accepted accounting principles upon completion and subsequently reflect the transaction in its financial results and guidance.
Ropes & Gray LLP is advising Lilly as legal counsel, while Centerview Partners LLC is serving as Merida’s exclusive financial adviser and Goodwin Procter LLP is providing legal counsel.
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