Eli Lilly said on ‌Monday it would acquire privately held Merida Biosciences for up to $2.88 billion in cash, strengthening its immunology portfolio with an experimental treatment for thyroid-related autoimmune conditions.

Lilly has been on an acquisition spree following windfall ​profits from the success of its weight-loss drugs. Its deal spending in 2026 has outpaced ​that in the prior years, as the pharma giant aims to ⁠expand beyond obesity and diabetes.

Merida is developing a new class of precision therapeutics ​to selectively target antibodies that cause a range of immunity-related conditions. Its lead drug ​candidate, MER511, is in the early stage of development for autoimmune disorders such as Graves’ disease and thyroid eye disease.

“We’re building our pipeline around therapies that meaningfully change the course of disease, not ​just its downstream effects,” said Francisco Ramírez-Valle, senior vice president, Lilly immunology research ​and early clinical development. “Merida’s lead program is designed to do exactly that.”

Lilly said the deal for ‌Merida includes ⁠an upfront amount and payments contingent on meeting certain milestones, but did not disclose the details. The company expects the transaction to close in the fourth quarter.

We see this acquisition as further evidence of management’s intent to diversify Lilly’s pipeline beyond obesity, ​said Leerink Partners ​analyst David Risinger.

Graves’ disease ⁠causes an overactive thyroid gland to produce excess hormone, while thyroid eye disease is a condition that can cause inflammation, eye bulging, double ​vision and vision impairment.

Lilly said initial data showed MER511 substantially ​lowered the ⁠thyroid-stimulating antibodies linked to the diseases, while showing a favorable initial safety profile.

Treatments for Graves’ disease currently include antithyroid medications, radioactive iodine and surgery, while there are two FDA-approved medicines 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 for kidney and other ​immune-mediated conditions.