Eli Lilly announced Friday morning that it is purchasing Versanis for nearly $2 billion in a play to further strengthen its weight loss drug pipeline.

Lilly said shareholders of the private clinical-stage biopharma could receive up to $1.93 billion in cash, inclusive of an upfront payment and subsequent payments upon hitting certain developmental and sales milestones.

As part of the deal, Lilly will scoop up bimagrumab, Versanis’ monoclonal antibody that is being studied in a Phase 2 trial in adults who are overweight or obese. The drug is also being tested in combination with semaglutide to reduce fat mass while retaining muscle mass for people living with obesity. 

The deal is subject to customary closing conditions and will be reflected in Lilly’s financial results and forward-looking guidance, pending final approval.

“Lilly is committed to investigating potential new medicines to fight cardiometabolic diseases, including obesity, a chronic disease that affects over 100 million Americans,” said Ruth Gimeno, Ph.D., group VP of diabetes, obesity and cardiometabolic research at Lilly, in a statement. “By unifying the knowledge and expertise in incretin biology at Lilly with the deep understanding of activin biology at Versanis, we aim to harness the potential benefits of such combinations for patients.”

The Versanis acquisition marks yet another purchase for the dealmaking Lilly, which recently bought type 1 diabetes company Sigilon Therapeutics for $34.6 million upfront as well as Bay Area-based Dice Therapeutics for $2.4 billion.

Lilly also recently revealed Phase 2 data that indicated retatrutide, its investigational drug, cut weight by 24% at 48 weeks. The company plans to advance the drug to Phase 3 trials as it seeks to compete with other drugmakers in the increasingly crowded and lucrative obesity treatment and GLP-1 drugs market.

As for Versanis, the company will be supported by additional resources to develop medicines for treating cardiometabolic diseases. 

“It has been a privilege for our team to advance bimagrumab to address one of the greatest health crises of our time,” Versanis CEO Mark Pruzanski, MD, said in a statement. “As a global leader developing life-changing medicines, Lilly is ideally positioned to realize the potential of bimagrumab in combination with its incretin therapies to benefit people living with cardiometabolic diseases.”