Lilly is leveraging the substantial capital accumulated in the obesity field to bet on the next highly promising health track.

The US pharmaceutical giant announced its plan to acquire biotechnology company Centessa Pharmaceuticals for up to $7.8 billion, a transaction second only to Lilly's largest acquisition in history. Centessa focuses on developing drugs for narcolepsy and various daytime wakefulness disorders, with its core pipeline centered around the innovative mechanism of "orexin receptor agonists."

Trung Huynh, an analyst at RBC Capital Markets, stated that this move fills Lilly's gap in the insomnia sector. This area has "extremely high unmet needs" and is expected to open up a new market worth billions of dollars.

Furthermore, researchers believe that the application prospects of orexin-based drugs may extend far beyond sleep disorders, potentially encompassing broader neurological and psychiatric fields such as neurodegenerative diseases and ADHD in the future, further increasing market attention on this track.

Lilly's Continued Expansion in the Sleep Domain

This acquisition is not Lilly's first foray into the sleep domain. The company's weight-loss drug Zepbound is currently the only drug approved for obstructive sleep apnea; in 2004, Lilly acquired an insomnia drug from Merck KGaA (Germany), and several years later acquired Hypnion, a small biotech company specializing in sleep disorder drug R&D.

The nearly $8 billion bet on Centessa continues Lilly's strategy of sustained expansion in the central nervous system field. Analyst Trung Huynh pointed out that Lilly has been committed to expanding its CNS business, and this acquisition precisely fills a key gap in its insomnia portfolio.

Takeda Leads, Lilly Aims for a Late-Stage Victory

In the orexin receptor agonist track, Lilly faces direct competition from Takeda Pharmaceutical and Alkermes Plc. Takeda is the most advanced, with its investigational drug, ovetorexant, receiving priority review status from the US FDA in February this year for type 1 narcolepsy, with approval results expected within the year. Takeda stated that the peak global sales for this drug in this indication are expected to reach $2 billion to $3 billion.

Andrew Plump, Takeda's Chief Medical Officer, stated in an interview, "The fact that Lilly is willing to pay such a high price for a small company with early-stage molecules demonstrates the excitement and potential of this field." According to research published by Takeda in JAMA Neurology last December, ovetorexant 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 field—not to seize the first-mover advantage, but to leverage its substantial capital and commercialization capabilities for a late-stage victory, competing in this multi-billion dollar market that is highly regarded by the industry.

Greater Imagination: The Leap from Sleep to Neuropsychiatric Diseases

The potential market for orexin-based drugs may far exceed narcolepsy itself. Centessa's investigational drug is also being tested for idiopathic hypersomnia. Researchers suggest that such drugs may benefit sleep apnea in the future—a condition affecting over 23 million adults in the US.

Alkermes is expanding its indications to include ADHD, Parkinson's disease, and fatigue associated with multiple sclerosis. Giovanni Mariggi, co-founder of Medicxi, stated that these drugs can not only "induce wakefulness" but are also beginning to show cognitive benefits, which is particularly valuable for patients with neurodegenerative diseases. Medicxi is the firm that founded Centessa by merging multiple biotechnology companies.

Emmanuel Mignot, a professor of Sleep Medicine at Stanford University, believes that orexin agonists "are likely to find applications in many areas of medicine, with potential wherever there are issues of sleepiness or sedation." Jim Tananbaum, founder of Foresite Capital, also stated that if clinical trials confirm their application beyond sleep disorders, it would represent a huge market opportunity.