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Can LLY's Merida Deal Boost Its M&A Push to Diversify Beyond GLP-1s?
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Key Takeaways
Eli Lilly's 2026 deals add platforms and assets across immunology, oncology, neuroscience and vaccines.
Eli Lilly's Merida deal adds an antibody-engineering platform and early-stage immunology candidate MER511.
Merck, Gilead and AbbVie are also using acquisitions to broaden pipelines and diversify into new areas.
Earlier this week, Eli Lilly (LLY - Free Report) announced its 10th acquisition deal of 2026, agreeing to acquire Merida Biosciences for up to $2.875 billion in cash, including an upfront payment and contingent milestone payments. The agreement would add Merida’s antibody-engineering platform and its lead candidate, MER511, to Lilly’s immunology pipeline. MER511 is in early-stage development for Graves’ disease and thyroid eye disease and is designed to selectively eliminate disease-causing autoantibodies. The deal is expected to close in the fourth quarter of 2026.
Lilly’s 2026 dealmaking began in January, when it agreed to acquire Ventyx Biosciences for about $1.2 billion, adding oral NLRP3 inhibitor programs targeting inflammatory, neurodegenerative and cardiometabolic diseases. In February, it agreed to acquire Orna Therapeutics for up to $2.4 billion, adding an in vivo CAR-T platform and the clinical study-ready candidate ORN-252 for B-cell-driven autoimmune diseases. In March, Lilly announced the up-to-$7.8 billion Centessa deal, gaining an orexin receptor 2 agonist portfolio for narcolepsy and other sleep-wake disorders. In April, Lilly agreed to acquire Kelonia Therapeutics for up to $7 billion, adding an early-stage BCMA-targeted in vivo CAR-T candidate KLN-1010 for multiple myeloma. In the same months, LLY also announced the Ajax acquisition for up to $2.3 billion, adding the phase I JAK2 inhibitor AJ1-11095 for myelofibrosis.
In May, Lilly announced three additional acquisitions — Curevo for up to $1.5 billion, adding the phase II shingles vaccine candidate amezosvatein; LimmaTech for up to $780 million, adding the phase I Staphylococcus aureus vaccine LTB-SA7; and Vaccine Company for up to $1.55 billion, adding a preclinical vaccine platform led by a phase I-ready Epstein-Barr virus candidate. In July, Lilly agreed to acquire AtaiBeckley for approximately $2.8 billion upfront plus up to $1 billion in milestone payments. The successful closing of the deal will add neuroscience assets led by the late-stage candidate BPL-003 for treatment-resistant depression to LLY’s portfolio.
The breadth of these deals clearly reflects Lilly’s deliberate effort to diversify its portfolio beyond cardiometabolic health. Mounjaro (for diabetes) and Zepbound (for obesity) accounted for 65% of Lilly’s total revenues in the first half of 2026, highlighting the concentration of the company’s current business around its GLP-1 medicines. At the same time, Eli Lilly’s oncology, immunology and neuroscience businesses are also showing growth, creating a foundation for further expansion beyond cardiometabolic health. Its 2026 acquisitions build on this momentum by adding new platforms and clinical-stage assets across these areas, which could help create additional revenue streams and reduce reliance on GLP-1 medicines over the longer term.
Other Pharma Giants Turn to Acquisitions to Diversify Portfolios
Lilly is not alone in using acquisitions to strengthen future growth. Several large drugmakers are making sizeable deals to add late-stage assets, replenish pipelines and expand into therapeutic areas with long-term commercial potential.
Merck (MRK - Free Report) has pursued two major acquisitions in 2026 to broaden its pipeline. In January, Merck completed its $9.2 billion acquisition of Cidara Therapeutics, adding MK-1406 (formerly CD388), a long-acting antiviral undergoing phase III development to prevent seasonal and pandemic influenza in people at high risk of complications. In May, MRK completed the $6.8 billion acquisition of Terns Pharmaceuticals, adding TERN-701, an investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor in phase I/II development for certain patients with chronic myeloid leukemia.
Gilead Sciences (GILD - Free Report) also stepped up dealmaking in 2026, with acquisitions spanning oncology and inflammation. Gilead's $7.8 billion acquisition of Arcellx gained full control of anito-cel, an investigational BCMA-directed CAR-T therapy for relapsed/refractory multiple myeloma. The $3.15 billion acquisition of Tubulis added next-generation ADC assets, including TUB-040, which is in phase Ib/II development for platinum-resistant ovarian cancer and non-small cell lung cancer. In addition, Gilead’s $1.675 billion acquisition of Ouro Medicines added gamgertamig (OM336), a BCMAxCD3 T-cell engager being developed in a phase I/II study for autoimmune diseases.
AbbVie (ABBV - Free Report) announced its largest 2026 deal in June, agreeing to acquire Apogee Therapeutics for approximately $10.9 billion. The transaction would add zumilokibart (APG777), a late-stage IL-13 antibody being developed for atopic dermatitis, along with APG273, a long-acting IL-13/TSLP combination being evaluated for asthma. The deal is designed to deepen AbbVie’s immunology portfolio and expand its presence in respiratory diseases. The transaction is expected to close in the third quarter of 2026.
LLY’s Price Performance, Valuation and Estimates
Lilly stock has risen 7.9% so far this year compared with the industry’s growth of 13%. During the same time frame, the company has outperformed the sector, but underperformed the S&P 500, as seen in the chart below.
LLY Stock Price Movement
Image Source: Zacks Investment Research
From a valuation standpoint, Lilly stock is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 27.23 forward earnings, higher than 18.55 for the industry. However, the stock is trading below its five-year mean of 34.56.
LLY Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings per share has risen from $33.74 to $35.93 over the past 30 days, while that for 2027 has risen from $44.98 to $45.87.
View the Zacks #1 Rank List
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Can LLY's Merida Deal Boost Its M&A Push to Diversify Beyond GLP-1s?
Key Takeaways
Earlier this week, Eli Lilly (LLY - Free Report) announced its 10th acquisition deal of 2026, agreeing to acquire Merida Biosciences for up to $2.875 billion in cash, including an upfront payment and contingent milestone payments. The agreement would add Merida’s antibody-engineering platform and its lead candidate, MER511, to Lilly’s immunology pipeline. MER511 is in early-stage development for Graves’ disease and thyroid eye disease and is designed to selectively eliminate disease-causing autoantibodies. The deal is expected to close in the fourth quarter of 2026.
Lilly’s 2026 dealmaking began in January, when it agreed to acquire Ventyx Biosciences for about $1.2 billion, adding oral NLRP3 inhibitor programs targeting inflammatory, neurodegenerative and cardiometabolic diseases. In February, it agreed to acquire Orna Therapeutics for up to $2.4 billion, adding an in vivo CAR-T platform and the clinical study-ready candidate ORN-252 for B-cell-driven autoimmune diseases. In March, Lilly announced the up-to-$7.8 billion Centessa deal, gaining an orexin receptor 2 agonist portfolio for narcolepsy and other sleep-wake disorders. In April, Lilly agreed to acquire Kelonia Therapeutics for up to $7 billion, adding an early-stage BCMA-targeted in vivo CAR-T candidate KLN-1010 for multiple myeloma. In the same months, LLY also announced the Ajax acquisition for up to $2.3 billion, adding the phase I JAK2 inhibitor AJ1-11095 for myelofibrosis.
In May, Lilly announced three additional acquisitions — Curevo for up to $1.5 billion, adding the phase II shingles vaccine candidate amezosvatein; LimmaTech for up to $780 million, adding the phase I Staphylococcus aureus vaccine LTB-SA7; and Vaccine Company for up to $1.55 billion, adding a preclinical vaccine platform led by a phase I-ready Epstein-Barr virus candidate. In July, Lilly agreed to acquire AtaiBeckley for approximately $2.8 billion upfront plus up to $1 billion in milestone payments. The successful closing of the deal will add neuroscience assets led by the late-stage candidate BPL-003 for treatment-resistant depression to LLY’s portfolio.
The breadth of these deals clearly reflects Lilly’s deliberate effort to diversify its portfolio beyond cardiometabolic health. Mounjaro (for diabetes) and Zepbound (for obesity) accounted for 65% of Lilly’s total revenues in the first half of 2026, highlighting the concentration of the company’s current business around its GLP-1 medicines. At the same time, Eli Lilly’s oncology, immunology and neuroscience businesses are also showing growth, creating a foundation for further expansion beyond cardiometabolic health. Its 2026 acquisitions build on this momentum by adding new platforms and clinical-stage assets across these areas, which could help create additional revenue streams and reduce reliance on GLP-1 medicines over the longer term.
Other Pharma Giants Turn to Acquisitions to Diversify Portfolios
Lilly is not alone in using acquisitions to strengthen future growth. Several large drugmakers are making sizeable deals to add late-stage assets, replenish pipelines and expand into therapeutic areas with long-term commercial potential.
Merck (MRK - Free Report) has pursued two major acquisitions in 2026 to broaden its pipeline. In January, Merck completed its $9.2 billion acquisition of Cidara Therapeutics, adding MK-1406 (formerly CD388), a long-acting antiviral undergoing phase III development to prevent seasonal and pandemic influenza in people at high risk of complications. In May, MRK completed the $6.8 billion acquisition of Terns Pharmaceuticals, adding TERN-701, an investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor in phase I/II development for certain patients with chronic myeloid leukemia.
Gilead Sciences (GILD - Free Report) also stepped up dealmaking in 2026, with acquisitions spanning oncology and inflammation. Gilead's $7.8 billion acquisition of Arcellx gained full control of anito-cel, an investigational BCMA-directed CAR-T therapy for relapsed/refractory multiple myeloma. The $3.15 billion acquisition of Tubulis added next-generation ADC assets, including TUB-040, which is in phase Ib/II development for platinum-resistant ovarian cancer and non-small cell lung cancer. In addition, Gilead’s $1.675 billion acquisition of Ouro Medicines added gamgertamig (OM336), a BCMAxCD3 T-cell engager being developed in a phase I/II study for autoimmune diseases.
AbbVie (ABBV - Free Report) announced its largest 2026 deal in June, agreeing to acquire Apogee Therapeutics for approximately $10.9 billion. The transaction would add zumilokibart (APG777), a late-stage IL-13 antibody being developed for atopic dermatitis, along with APG273, a long-acting IL-13/TSLP combination being evaluated for asthma. The deal is designed to deepen AbbVie’s immunology portfolio and expand its presence in respiratory diseases. The transaction is expected to close in the third quarter of 2026.
LLY’s Price Performance, Valuation and Estimates
Lilly stock has risen 7.9% so far this year compared with the industry’s growth of 13%. During the same time frame, the company has outperformed the sector, but underperformed the S&P 500, as seen in the chart below.
LLY Stock Price Movement
Image Source: Zacks Investment Research
From a valuation standpoint, Lilly stock is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 27.23 forward earnings, higher than 18.55 for the industry. However, the stock is trading below its five-year mean of 34.56.
LLY Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings per share has risen from $33.74 to $35.93 over the past 30 days, while that for 2027 has risen from $44.98 to $45.87.
LLY Estimate Movement
Image Source: Zacks Investment Research
LLY has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.