From weight loss drugs to tackling sleep disorders! Eli Lilly plans to acquire Centessa for up to $7.8 billion, entering the treatment field for narcolepsy and wakefulness disorders.

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Eli Lilly is leveraging its strong capital accumulated in the obesity field to bet on the next high-potential health sector.

The American pharmaceutical giant announced that it will acquire the biotechnology company Centessa Pharmaceuticals for up to $7.8 billion, marking the second largest acquisition in Lilly’s history. Centessa specializes in developing drugs to treat narcolepsy and various daytime wakefulness disorders, with its core pipeline centered around the innovative mechanism of "orexin receptor agonists".

RBC Capital Markets analyst Trung Huynh said, this move fills Lilly’s gap in the insomnia sector. The field has “very high unmet demand" and is expected to open up a new multi-billion-dollar market.

Additionally, researchers believe that the application prospects of orexin drugs may extend far beyond sleep disorders, potentially expanding into broader neurological and psychiatric fields such as neurodegenerative diseases and ADHD, further increasing market attention to this sector.

Lilly’s Continued Expansion in the Sleep Sector

This acquisition is not Lilly’s first foray into the sleep sector. The company’s weight loss drug Zepbound is currently the only approved medication for obstructive sleep apnea; in 2004, Lilly acquired an insomnia drug from Germany’s Merck; a few years later, it bought the small biotech company Hypnion, which focused on developing drugs for sleep disorders.

The nearly $8 billion bet on Centessa is a continuation of Lilly’s ongoing expansion strategy in the central nervous system sector. Analyst Trung Huynh points out that Lilly has always aimed to expand its CNS business, and this acquisition precisely fills its critical gap in the insomnia field.

Takeda Leads for Now, Lilly Aims to Overtake

In the orexin receptor agonist field, Lilly faces direct competition from Takeda Pharmaceuticals and Alkermes Plc. Among them, Takeda’s progress is the most advanced—their investigational drug oreporexton was granted US FDA priority review status in February this year, with the indication for type 1 narcolepsy, and is expected to have a review result within the year. Takeda states that the global peak sales for this drug in this indication could reach $2-3 billion.

Takeda’s head of R&D, Andrew Plump, said in an interview, “Lilly’s willingness to pay such a high price for a small company with early-stage molecules shows the excitement and potential of this field.” According to Takeda’s research published in JAMA Neurology last December, oreporexton not only improved wakefulness but also significantly enhanced patients’ attention, memory, and executive function within eight weeks.

Lilly’s strategy mirrors its approach in the obesity market—not to seize the first mover advantage, but to leverage its strong capital and commercialization ability to overtake the competition and compete in this promising multi-billion-dollar sector.

Greater Imagination: Crossing Over from Sleep to Neuropsychiatric Diseases

The potential market for orexin drugs may far exceed narcolepsy itself. Centessa’s investigational drugs are also being tested for idiopathic hypersomnia, and researchers noted that these drugs may benefit sleep apnea in the future—a condition affecting over 23 million adults in the US.

Alkermes is expanding indications to ADHD, Parkinson’s disease, and multiple sclerosis-related fatigue. Medicxi co-founder Giovanni Mariggi stated that these drugs not only “induce wakefulness” but are beginning to show cognitive improvement benefits, which are especially valuable for patients with neurodegenerative diseases. Centessa was actually formed through the merger of several biotech companies spearheaded by Medicxi.

Stanford sleep medicine professor Emmanuel Mignot believes orexin agonists “are very likely to be applied in many medical fields; any scenarios involving excessive sleepiness or sedation have potential.” Foresite Capital founder Jim Tananbaum also commented that if clinical trials confirm their applications beyond sleep disorders, it would represent a huge market opportunity.

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