Centessa Pharmaceuticals (NASDAQ:CNTA) shares surged more than 46% in pre-market trading Tuesday after Eli Lilly (NYSE:LLY) revealed a definitive agreement to acquire the clinical-stage biotech company in a transaction valued at up to $7.8 billion, including contingent milestone payments.
Under the terms of the deal, Lilly will pay $38 per share in cash, representing an upfront value of about $6.3 billion. Shareholders will also receive a non-transferable contingent value right worth up to an additional $9 per share if certain regulatory milestones are achieved.
According to Lilly, the offer reflects a 40.5% premium to Centessa’s 30-day volume-weighted average share price.
The acquisition will give Lilly control of Centessa’s orexin receptor 2 (OX2R) agonist portfolio, including cleminorexton, which the company described as a “potential best-in-class therapeutic” aimed at treating sleep-wake disorders such as narcolepsy type 1 and type 2 and idiopathic hypersomnia.
The pipeline also includes several earlier-stage drug candidates that could potentially address a broader range of neurological and neuropsychiatric disorders.
Carole Ho, president of Lilly Neuroscience, said “orexin receptor biology represents one of the most compelling mechanistic opportunities in neuroscience” and noted that bringing the teams together would allow Lilly to advance Centessa’s pipeline “at the speed and scale it deserves.”
Centessa CEO Mario Alberto Accardi said the company is “at the forefront of orexin science,” adding that the portfolio “could help redefine what’s possible in neuroscience.”
He said that becoming part of Lilly will “accelerate the advancement of our orexin portfolio across a broad range of neuroscience indications.”
The companies expect the transaction to close during the third quarter.