Eli Lilly and Co (NYSE: LLY) is set to acquire Merida Biosciences Inc. for up to $2.88 billion in cash, marking a strategic push into autoimmune and allergic disease treatments as the pharma giant looks to reduce its heavy reliance on the weight-loss and diabetes markets that propelled it to the top of the global pharmaceutical valuation charts.

Merida, a privately held biotechnology firm, specializes in developing therapies that target disease-causing autoantibodies without compromising the body's natural immune defenses. Its most advanced candidate is currently in Phase 1 clinical trials for Graves' disease and thyroid eye disease.

This potential acquisition is part of a broader M&A blitz this year, with Eli Lilly having announced deals surpassing $20 billion in total value since January. Powered by the substantial cash flows generated from its blockbuster drugs Zepbound and Mounjaro, the company is aggressively diversifying its pipeline, with a particular focus on early-stage assets to position itself for the next major therapeutic breakthrough.

Earlier this year, the pharmaceutical heavyweight agreed to pay up to $7.8 billion for sleep medication developer Centessa Pharmaceuticals Plc and up to $7 billion for cancer drug researcher Kelonia Therapeutics—both ranking among the largest acquisitions in company history. In May, it also inked a deal worth up to $3.8 billion to acquire three vaccine development firms. Management has signaled that additional transactions are on the horizon.

Under the terms of the agreement, Eli Lilly will make an upfront cash payment, with potential milestone payments tied to the successful advancement of Merida's experimental products through the pipeline. Specific financial terms were not disclosed. The transaction is expected to close in the fourth quarter.

Shares of Eli Lilly were down 0.2% in pre-market trading, though the stock has gained nearly 10% year-to-date.