Lilly to Acquire Autoimmune Drugmaker for Up to $2.875 Billion

Eli Lilly will acquire Merida Biosciences, a developer of autoimmune disease treatments, for up to $2.875 billion, or approximately 4 trillion won.

According to Fierce Biotech, a U.S. biotechnology and pharmaceutical news outlet, on the 31st local time, Lilly signed an agreement to acquire Merida to gain technology that selectively breaks down pathogenic autoantibodies to treat disease.

The purchase price combines an upfront payment and milestone payments. Through the transaction, Lilly will acquire a pipeline centered on a Graves’ disease drug candidate.

Merida emerged last year after raising $121 million. While many existing treatments work by suppressing the immune system, Merida’s candidates target disease-causing antibodies that bind abnormally to healthy cells.

Francisco Ramirez-Valle, Lilly’s senior vice president of immunology research and early clinical development, said in a statement, “Merida’s approach aligns with Lilly’s direction, which focuses on changing the course of disease itself rather than its downstream effects.”

Merida began a phase 1 trial of its Graves’ disease candidate MER511 in December last year. Participants are receiving MER511 intravenously or subcutaneously.

In Graves’ disease, autoantibodies bind to the thyroid-stimulating hormone receptor (TSHR), stimulating the production of thyroid hormones and potentially leading to thyroid eye disease (TED). Lilly said early phase 1 data showed a substantial reduction in thyroid-stimulating antibodies.

Current treatments for Graves’ disease include drugs that block thyroid hormone production or inhibit its activity. Tepezza, from Amgen, is one treatment option for patients with TED.

Graves’ disease treatments in development include FcRn blockers from argenx and Immunovant, as well as Sanofi’s BTK inhibitor rilzabrutinib. Biohaven is developing the IgG degrader BHV-1300, while Lycia Therapeutics is developing LCA-0321, a candidate designed to bind and remove TSHR autoantibodies.

In addition to Graves’ disease, Merida is advancing MER769, a treatment for IgE-mediated allergic diseases, and a primary membranous nephropathy program into clinical development. Lilly said MER769 could potentially be used to treat food allergies, asthma and chronic spontaneous urticaria.

The acquisition continues Lilly’s active pursuit of assets, fueled by strong sales of GLP-1 drugs. This year, Lilly has successively entered into multibillion-dollar acquisition and licensing agreements with atai Life Sciences, Cencora and Kelonia Therapeutics.