Centessa Pharmaceuticals' shares rocketed in premarket action on Tuesday, rising by more than 46% after Eli Lilly revealed a definitive agreement to buy the clinical-stage biotech in a transaction that can reach $7.8 billion when contingent payments are included.
Under the terms announced, Lilly will pay $38 per Centessa share in cash, representing an initial consideration of roughly $6.3 billion. In addition, Centessa shareholders will receive a non-transferable contingent value right that could deliver up to an extra $9 per share if specified regulatory milestones are achieved.
The offer equates to a 40.5% premium relative to Centessa's 30-day volume-weighted average price, according to the companies.
The acquisition gives Lilly control of Centessa's orexin receptor 2 (OX2R) agonist program, anchored by cleminorexton. The drug is described in the announcement as a "potential best-in-class therapeutic" for sleep-wake disorders, including narcolepsy type 1 and type 2 as well as idiopathic hypersomnia. Centessa's pipeline that will transfer with the deal also includes several earlier-stage candidates with potential applications across a range of neurological and neuropsychiatric disorders.
"Orexin receptor biology represents one of the most compelling mechanistic opportunities in neuroscience," said Carole Ho, president of Lilly Neuroscience, adding that bringing teams together would enable Lilly to develop Centessa's programs "at the speed and scale it deserves."
Centessa CEO Mario Alberto Accardi said the company is "at the forefront of orexin science," and that the portfolio "could help redefine what's possible in neuroscience." He added that joining Lilly should "accelerate the advancement of our orexin portfolio across a broad range of neuroscience indications."
The companies stated the deal is expected to close in the third quarter. Further details on timing, and conditions required to effect closing, were not expanded upon in the announcement.
Market participants and investors often weigh the structure of such transactions carefully: this agreement blends a sizable upfront cash component with contingent value rights that depend on achieving regulatory milestones, aligning some part of the ultimate consideration with future clinical and regulatory outcomes.
Separately, promotional material embedded with the announcement referenced an analytical tool that evaluates Eli Lilly (LLY) across more than 100 financial metrics. That material described the tool as using AI to identify stocks with attractive risk-reward profiles and noted it has highlighted prior winners, while offering to show whether LLY is currently included in any of its strategies.
For now, Centessa's shareholders will see an immediate premium and potential upside linked to regulatory progress, while Lilly gains a portfolio focused on orexin receptor science and broader neuroscience opportunities.