Eli Lilly to acquire Centessa for $38.00 per share in cash plus one CVR

Eli Lilly (LLY) and Centessa (CNTA) announced a definitive agreement for Lilly to acquire Centessa. Under the terms of the transaction agreement, Lilly will acquire all of the issued and to be issued share capital of Centessa for $38.00 in cash per share plus one non-transferrable contingent value right that entitles the holder to receive up to an aggregate of $9.00 subject to the achievement of three milestones described below, for total potential aggregate per share consideration of up to $47.00. CVR holders would become entitled to receive contingent payments as follows: $2.00 per CVR in cash, upon U.S. FDA approval of cleminorexton or ORX142 for the treatment of narcolepsy type 2 prior to the fifth anniversary of transaction closing; $5.00 per CVR in cash, upon U.S. FDA approval of cleminorexton or ORX142 for the treatment of idiopathic hypersomnia prior to the fifth anniversary of transaction closing; and $2.00 per CVR in cash, upon the first U.S. FDA approval of cleminorexton or ORX142 for the treatment of any indication prior to January 1, 2030. There can be no assurance that any payments will be made with respect to the CVR. The upfront cash consideration represents an aggregate equity value of approximately $6.3B and the CVR represents an additional potential aggregate equity value of approximately $1.5B. The transaction, which will be effectuated by way of a scheme of arrangement under the laws of England and Wales, is expected to close in the third quarter, subject to approval by Centessa shareholders, sanction by the High Court of Justice of England and Wales and satisfaction of other customary closing conditions, including regulatory approvals.