Eli Lilly continued its acquisition spree on Monday as the world's largest drugmaker agreed to pay roughly $2.9 billion in cash for a biotechnology company developing treatments for autoimmune diseases.

Privately held Merida Biosciences is creating biologic drugs that target specific, harmful antibodies. Lilly will acquire the rights to Merida's lead asset, MER511, which is currently in early clinical development for Graves' disease and thyroid eye disease.

The deal consideration includes an upfront cash payment and contingent milestone payments, Lilly said.

While much of investor attention has centered on Lilly's ever-expanding oncology portfolio, the Merida deal marks the drugmaker's latest move to bolster its immunology pipeline through strategic acquisitions. In February, Lilly agreed to buy Orna Therapeutics, a developer of therapies for B-cell-driven autoimmune diseases, in a $2.4 billion cash deal.

Lilly shares slipped 0.3% in premarket trading Monday. Futures tracking the benchmark S&P 500 were down nearly as much.