Eli Lilly (LLY) announced on Monday that it will acquire privately held Merida Biosciences for up to $2.88 billion in cash, the latest in a string of deals aimed at broadening a pipeline still heavily concentrated in obesity and diabetes. The transaction adds experimental therapies for immune-related and allergic diseases to Lilly’s portfolio, but it also raises a pressing question: can acquisitions alone offset the risks of relying on GLP-1 drugs for nearly two-thirds of revenue?
The deal includes an upfront payment plus milestone-based contingent payments, though specific figures were not disclosed. Lilly expects the transaction to close in the fourth quarter. Merida is focused on developing medicines that selectively target antibodies responsible for a range of immune-mediated conditions.
The centerpiece of the acquisition is MER511, an early-stage candidate for autoimmune disorders such as Graves’ disease and thyroid eye disease. Graves’ disease causes the thyroid gland to become overactive, while thyroid eye disease can lead to inflammation, eye bulging, double vision and vision impairment. Lilly said initial data showed MER511 substantially reduced thyroid-stimulating antibodies linked to these diseases, with a favorable early safety profile. Current treatment options for Graves’ disease include antithyroid medications, radioactive iodine and surgery, while two FDA-approved therapies exist 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, as well as earlier-stage programs targeting kidney and other immune-mediated conditions.
For Lilly, the acquisition reflects both the scale of its recent success and the concentration risk that comes with it. In the second quarter of 2026, sales of Mounjaro rose 91% year over year, Zepbound grew 46%, and the newly launched oral GLP-1 drug Foundayo began generating revenue. Together, these weight-loss treatments accounted for nearly $15 billion of the company’s roughly $23 billion in quarterly revenue—about two-thirds of the total.
That dependence is now colliding with signs of deceleration. Zepbound’s growth slowed from 172% in the second quarter of 2025 to 46% a year later, even as Mounjaro accelerated from 68% to 91%. As the old Wall Street saying goes, trees don’t grow to the sky.
Lilly has responded by deploying its GLP-1 windfall into acquisitions across immunology and other therapeutic areas. The Merida deal is a rational move to diversify, but drug development is long, costly and uncertain. Whether this $2.88 billion bet meaningfully reduces the company’s reliance on obesity drugs remains an open question. Investors will be watching three variables closely: the absolute size of the GLP-1 franchise, its growth trajectory, and how quickly non-GLP-1 assets can scale.
