Eli Lilly on Tuesday reached a deal to buy Centessa Pharmaceuticals, a company developing treatments for the sleep disorder narcolepsy and other neurological conditions.
Lilly, which is flush with cash from sales of its weight-loss drug and has been on a deal-making spree, agreed to initially pay $6.3 billion in cash for the company. Lilly could end up paying an additional $1.5 billion if U.S. regulators were to eventually approve a pair of drugs that Centessa is developing.
Centessa, which is publicly traded and has headquarters in Boston and Britain, does not yet have any drugs on the market. The company has been conducting a midstage clinical trial of its lead drug for narcolepsy and is expected to be years away from a potential approval.
There has been growing investment in the pharmaceutical industry in drugs for sleep disorders. While past medicines have aimed to help patients sleep better, a new generation of drugs like the one from Centessa is also aimed at helping people stay awake during the day. And even though sleep disorders like narcolepsy are rare, drugmakers could eventually tap into a much larger market of people who experience sleepiness due to more common conditions like Alzheimer’s.
Lilly, which has its headquarters in Indiana, is best known today for selling its weight-loss drug, which is sold as Zepbound for obesity and Mounjaro for diabetes.
On Monday, InSilico, a company that focuses on using artificial intelligence to discover new medicines, announced that it had struck a drug development deal with Lilly. And earlier this year, Lilly agreed to buy a company working on cell therapies and another tackling inflammation.
Lilly’s latest acquisition must still be approved by Centessa shareholders and regulators and it is expected to be finalized before October.
Late last year, Lilly became the first company in health care to reach a trillion-dollar valuation, though its market value has since dipped under that threshold as the broader market has slumped.
Rebecca Robbins is a Times reporter covering the pharmaceutical industry. She has been reporting on health and medicine since 2015.
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