By Sneha S K
March 31 (Reuters) – Eli Lilly said on Tuesday it would buy Centessa Pharmaceuticals in a deal valued at up to $7.8 billion as the U.S. drugmaker looks to diversify beyond its metabolic portfolio and expand into treatments for sleep disorders.
UK-based Centessa is developing a new class of treatments designed to target orexin, a molecule in the brain that regulates the sleep-wake cycle. Its lead drug, cleminorexton, is in mid-stage studies for narcolepsy and idiopathic hypersomnia, disorders that cause excessive daytime sleepiness.
The narcolepsy market is currently worth about $2.5 billion and can significantly expand following the entrance of orexin agonists, Oppenheimer analyst Kostas Biliouris said in a note.
“Johnson & Johnson has also recently expressed desire to expand its neuroscience franchise and could make sense as rival bidder,” he said.
Lilly has offered $38 per share in cash, a premium of 37.8% to Centessa’s U.S.-listed stock’s last close. Centessa’s U.S.-listed shares jumped 46% in premarket trading.
The U.S. drugmaker has also offered one non-transferable contingent value right (CVR) of about $9 per share, or worth about $1.5 billion.
The deal is expected to close in the third quarter.
This marks Lilly’s biggest deal since its buyout of Loxo Oncology in 2019 for about $8 billion.
Eli Lilly, which touched a trillion-dollar valuation last year on the success of its blockbuster weight-loss treatments, has been ramping up investments to strengthen other parts of its pipeline.
This year, the company snapped up Orna Therapeutics in a $2.4 billion deal to expand its next-generation cell therapy capabilities, and paid more than $1 billion to buy autoimmune drug developer Ventyx Biosciences.
Centessa’s pipeline includes additional clinical and preclinical-stage treatments with potential to treat a broader range of neurological and neuropsychiatric conditions, the companies said.
(Reporting by Sneha S K in Bengaluru; Editing by Sriraj Kalluvila)
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