Pharma giant Eli Lilly and Co will buy privately held drug developer Versanis for up to $1.93 billion to improve its portfolio of obesity drugs.

Lilly said shareholders of the Oakland, CA-based clinical-stage biopharma could receive the proceeds in cash, including an upfront payment and subsequent payments upon hitting certain developmental and sales milestones.

Lilly will obtain bimagrumab, Versanis’ monoclonal antibody licensed from Novartis that is being studied in a Phase 2 trial in adults who are overweight or obese.

“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 vice president, diabetes, obesity and cardiometabolic research at Lilly.

Versanis, founded in 2021 by biotech investment firm Aditum Bio, will be supported by additional resources to develop medicines for treating cardiometabolic diseases.

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 to compete with other drugmakers in the increasingly crowded and lucrative obesity treatment and GLP-1 drugs market.

The acquisition marks yet another purchase for 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.