Eli Lilly agreed on Monday to acquire Merida Biosciences for up to $2.875 billion in cash, adding a biotechnology platform designed to eliminate the antibodies that cause autoimmune and allergic diseases.

The deal includes an upfront cash payment and contingent milestone payments, the company said. It is expected to close in the fourth quarter of 2026, subject to regulatory approvals and other customary closing conditions.

Cambridge, Massachusetts-based Merida is developing biologics engineered to target and degrade disease-causing antibodies without broadly suppressing the immune system — an approach the company says differs from many existing therapies. Its lead drug candidate, MER511, is in Phase 1 development for Graves' disease and thyroid eye disease, two conditions driven by autoantibodies that activate the thyroid-stimulating hormone receptor. Graves' disease affects roughly 3 million people in the U.S., and 25 to 40 percent of those patients go on to develop thyroid eye disease, which can cause pain, disfigurement, and vision loss, the company said. No approved treatments currently target the autoantibodies behind either condition.

Initial Phase 1 data for MER511 showed reductions in the relevant autoantibodies, with what the company described as a favorable early safety profile.

Merida's pipeline also includes MER769, a preclinical program targeting the antibody that triggers food allergy, asthma, and chronic spontaneous urticaria, along with earlier-stage work in kidney diseases such as membranous nephropathy.

"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 of Lilly immunology research and early clinical development, in a statement. "We see potential to apply this precision approach across a broad range of antibody-driven diseases."

Adam Townsend, chief executive officer of Merida, said in a statement that the company was founded to treat autoimmune and allergic diseases by targeting the antibodies driving them rather than suppressing the immune system broadly. "Joining Lilly gives our science the resources and commitment to realize its potential for patients with immune-mediated conditions," he said.

The acquisition continues a stretch of deal-making for Indianapolis-based Lilly, which has been flush with cash from its weight-loss drug business. Last month the company struck a deal to buy mental-health-focused AtaiBeckley for an initial $2.8 billion, and in late May it reached agreements to purchase three vaccine developers in transactions worth up to nearly $4 billion combined, according to the Wall Street Journal .