Lilly acquires Merida for $2.88 billion as SpaceX turbine plans pressure GE Vernova
Eli Lilly is deploying its obesity drug profits into a $2.875 billion autoimmune acquisition to diversify its pipeline, while Elon Musk’s push into gas turbine manufacturing rattles power equipment suppliers.
Eli Lilly agreed to acquire Merida Biosciences for up to $2.875 billion in cash, expanding its pipeline into autoimmune and allergic disease therapeutics. The Indianapolis-based drugmaker is targeting a new class of biologics designed to degrade pathogenic autoantibodies rather than broadly suppressing the immune system.
Merida’s lead programs focus on early-stage treatments for Graves' disease and thyroid eye disease. Chief Executive David Ricks told CNBC’s Sara Eisen that the deal aligns with the company's strategy of "investing in technologies that can really change other diseases like we've changed obesity."
Ricks noted the company has been highly acquisitive in 2026, completing more transactions this year than in all of last year to put its obesity windfall to work. He also addressed PepsiCo’s recent decision to drop GLP-1 coverage for employees due to escalating costs, calling the overall employer impact "flat" because of offsetting additions.
"I think what I'd say to PepsiCo or anybody else, you're already paying for obesity whether you cover the drugs or not," Ricks said. He argued that treating the condition is a smarter financial play for employers, as obesity drives major health costs through diabetes and heart attacks.
In the industrial sector, shares of GE Vernova fell 2% and Howmet Aerospace declined after Elon Musk announced SpaceX is developing in-house casting for natural gas turbine blades and vanes. The initiative aims to accelerate production of the power-generating equipment by up to 18 months.
Jefferies analysts cautioned that it could take at least four years for SpaceX to bring the blades to market due to the time required to industrialize facilities and improve manufacturing yields. Consequently, the turbine bottleneck will likely persist, preserving strong pricing power for GE Vernova in the near term.
However, Jefferies downgraded GE Vernova last Monday over concerns that political pushbacks could delay data center projects ahead of midterm elections. The corporate moves come as broader markets face headwinds from U.S. and Iran strikes pushing Brent crude above $90 a barrel, and Federal Reserve Chairman Kevin Warsh’s hawkish remarks driving the 10-year Treasury yield to 4.75%.
