Dave Ricks, Chairman and CEO of Lilly, speaks during a press conference for Eli Lilly and Company in Houston, Texas, the United States, September 23, 2025.
Antranik Tavitien | Reuters
Elie Lilly has agreed to pay up to $7.8 billion to acquire Centessa Pharmaceuticals and its experimental drug for excessive daytime sleepiness, the company announced Tuesday.
Centessa is one of several companies working on a new class of drugs to treat narcolepsy, a condition that leaves people unable to stay awake during the day. The drugs may also be used to treat other neurological conditions accompanied by drowsiness, such as Alzheimer’s disease and depression, and perhaps even more widely.
“Orexin receptor biology represents one of the most exciting 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 built a portfolio broad and deep enough to improve wakefulness across a broad range of indications.”
Under the terms of the deal, Lilly will pay $38 per share upfront, or $6.3 billion for Centessa, a 38% premium to Monday’s closing price. If Centessa’s drugs win approval from the U.S. Food and Drug Administration within certain deadlines, Lilly will have to pay up to $1.5 billion more.
The transaction is expected to close in the third quarter, subject to regulatory approval.
Lilly shares rose about 3% on Tuesday, while Centessa shares jumped 45%.
Orexin agonists used to treat narcolepsy and another serious sleep disorder, called idiopathic hypersomnia, could represent a $15 billion to $20 billion market if about a quarter of patients sought treatment, according to an estimate by Kostas Biliouris, an analyst at Oppenheimer. Sales could increase further if the drugs were used more widely.
Centessa will not be the first to market its orexin agonist. A rival drug Takeda is under review by 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 in mid-stage trial data that Centessa’s treatment could become best-in-class.
Lilly, for her part, is a long-time leader in the field of neuroscience. The company’s antidepressant Prozac propelled Lilly to the forefront of the pharmaceutical industry after its approval in 1987.
More recently, Lilly introduced a drug called Kisunla for the early stages of Alzheimer’s disease and another trial is underway to see if the treatment can prevent this memory-destroying disease.
Lilly has expressed plans to use money from its top-selling obesity and diabetes drugs, Zepbound and Mounjaro, to place more bets.
Already this year, Lilly announced plans to acquire cell therapy company Orna Therapeutics and Ventyx Biosciences, which specializes in inflammation.