Eli Lilly & Co. is set to acquire Centessa Pharmaceuticals Plc in a transaction worth up to $7.8 billion, underscoring its push to broaden its drug development pipeline. The Centessa Pharmaceuticals deal highlights the company’s effort to expand into therapeutic areas beyond its current core focus, particularly within neuroscience.
Under the terms announced Tuesday, Lilly will pay $38 a share for Centessa, along with an additional $9 per share tied to the achievement of three milestone targets. The structure represents a 70% premium to Monday’s close. The upfront component values Centessa at approximately $6.3 billion, with a further $1.5 billion linked to potential milestone-based payouts. The deal is centered on Centessa’s portfolio targeting sleep-wake disorders, including narcolepsy.
Centessa is developing treatments aimed at addressing underlying biological causes of sleep disorders. Its lead candidate, ORX750, targets orexin deficiency—a key driver of narcolepsy—by boosting levels of the peptide in the brain. Existing treatments for sleep conditions often come with limitations such as dependency and next-day residual effects, positioning newer approaches as potentially more effective alternatives.
The acquisition aligns with Lilly’s broader strategy to diversify its pipeline as it builds capabilities outside obesity treatments. While the company retains significant patent protection for its diabetes and obesity drugs Mounjaro and Zepbound, it is simultaneously investing in additional therapeutic areas to offset potential long-term revenue pressures. Lilly has already established a presence in sleep-related treatments, with Zepbound currently the only approved medication for sleep apnea, a condition affecting more than 23 million American adults.
Beyond sleep disorders, Lilly continues to expand its neuroscience portfolio with Kisunla for Alzheimer’s disease and other pipeline candidates targeting the condition. The company has also indicated interest in developing non-addictive pain treatments. Centessa’s ORX750, part of a new class of selective orexin agonists, could potentially compete with Takeda Pharmaceutical Co’s oveporexton, which is under review at the US Food and Drug Administration.
Lilly is purchasing Centessa from a “position of strength,” BMO Capital Markets analyst Evan Seigerman said in a note. “We remain positive on Lilly’s early efforts to diversify and grow their pipeline.”
