Eli Lilly Chair and CEO Dave Ricks speaks during a press conference in Houston, Texas, Sept. 23, 2025.
Antranik Tavitian | Reuters
Eli Lilly has agreed to pay up to $7.8 billion to acquire Centessa Pharmaceuticals and its experimental drug for excessive daytime sleepiness, the company said Tuesday.
Centessa is one of several companies working on a new class of drugs to treat narcolepsy, a condition that makes it difficult for people to stay awake during the day. The drugs may also be used to treat other neurological conditions that are accompanied by drowsiness, such as Alzheimer’s disease and depression, and possibly even more broadly.
“Orexin receptor biology represents one of the most compelling mechanistic opportunities in neuroscience as a direct intervention on the master switch of the sleep-wake cycle,” Dr. Carole Ho, president of Lilly Neuroscience, said in a statement. “Centessa has assembled a portfolio with the breadth and depth to improve wakefulness across a broad array of indications.”
Under the terms of the deal, Lilly will pay $38 a share upfront, or $6.3 billion for Centessa, a 38% premium to Monday’s closing price. If Centessa’s drugs win approval by the U.S. Food and Drug Administration by certain deadlines, Lilly will pay up to another $1.5 billion.
The transaction is expected to close in the third quarter, pending regulatory approval.
Shares of Lilly rose roughly 3% Tuesday, while Centessa’s stock surged 45%.
Orexin agonists used to treat narcolepsy and another severe sleep condition, called idiopathic hypersomnia, could amount to a $15 billion to $20 billion market if even about one quarter of patients seek treatment, according to an estimate from Oppenheimer analyst Kostas Biliouris. Sales could go even higher if the drugs are used more broadly.
Centessa won’t be the first to market with its orexin agonist. A rival drug from Takeda is under review with the FDA and could be approved later this year.
Biliouris said he doesn’t expect Centessa’s drug to be approved until 2028, but he sees signs from mid-stage trial data that Centessa’s treatment could become the best in class.
Lilly, for its part, is a longtime leader in neuroscience. The company’s antidepressant Prozac catapulted Lilly to the top ranks of the pharmaceutical industry after it was approved in 1987.
More recently, Lilly introduced a drug called Kisunla for the early stages of Alzheimer’s disease with another trial on the horizon to see if the treatment can prevent the memory-robbing disease.
Lilly has been vocal about its intention to use the cash coming from its best-selling obesity and diabetes drugs Zepbound and Mounjaro to place more bets.
Already this year, Lilly announced its intention to acquire cell-therapy company Orna Therapeutics and inflammation-focused Ventyx Biosciences.
