Eli Lilly (LLY) is acquiring Centessa Pharmaceuticals (CNTA) for $7.8 billion, a deal that gives the U.S. pharmaceutical giant a portfolio of treatments for sleep disorders.
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British-based Centessa develops treatments for excessive daytime sleepiness and other neurological conditions. Its lead therapy is currently in mid-stage clinical trials for disorders such as narcolepsy. Eli Lilly is paying $38 per share for each Centessa stock, a premium of 37% to CNTA stock’s last closing price.
Eli Lilly is also offering Centessa shareholders one non-transferable contingent value right of $9 per share, worth a total of $1.5 billion. The acquisition is expected to close in this year’s third quarter, subject to regulatory and shareholder approvals.
Centessa’s Pipeline of Medications
Centessa’s pipeline of medications includes additional clinical and preclinical-stage treatments that have the potential to treat a range of neurological and psychiatric conditions, the companies said in a joint news release announcing the deal.
Eli Lilly, which is best known today for its blockbuster weight-loss drugs, has been making sizable investments to bolster other parts of its medication pipeline. Earlier this year, Eli Lilly purchased Orna Therapeutics for $2.4 billion to expand its next-generation cell therapy treatments.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 19 Wall Street analysts. That rating is based on 16 Buy, two Hold, and one Sell recommendations issued in the last three months. The average LLY price target of $1,247.38 implies 31.53% upside from current levels.
