Eli Lilly is channeling the substantial capital accumulated from its obesity treatments into another promising health sector. The U.S. pharmaceutical giant announced it will acquire biotechnology firm Centessa Pharmaceuticals for up to $7.8 billion, making it one of Lilly’s largest acquisitions ever. Centessa focuses on developing therapies for narcolepsy and various daytime wakefulness disorders, with a core pipeline built around innovative "orexin receptor agonists."

According to RBC Capital Markets analyst Trung Huynh, this move addresses a gap in Lilly’s portfolio related to sleep-wake disorders. The area represents a "highly unmet medical need" and could unlock a multi-billion-dollar market. Researchers also suggest that orexin-based drugs may have applications extending beyond sleep disorders, potentially reaching neurodegenerative diseases, ADHD, and other neurological or psychiatric conditions, further elevating interest in this therapeutic area.

This acquisition is not Lilly’s first venture into sleep medicine. Its weight-loss drug Zepbound is currently the only approved treatment for obstructive sleep apnea. In 2004, Lilly acquired an insomnia drug from Germany’s Merck, and years later it purchased Hypnion, a small biotech specializing in sleep disorder treatments. The nearly $8 billion bet on Centessa continues Lilly’s strategic expansion within the central nervous system space. Huynh noted that Lilly has long aimed to grow its CNS business, and this acquisition fills a critical gap in its sleep disorder offerings.

In the orexin receptor agonist space, Lilly faces direct competition from Takeda Pharmaceutical and Alkermes Plc. Takeda is currently furthest ahead—its investigational drug, oveporexton, received FDA priority review in February for type 1 narcolepsy, with a decision expected this year. Takeda estimates peak global sales for the drug could reach $2–3 billion in this indication. Takeda’s R&D president Andrew Plump remarked that Lilly’s willingness to pay a premium for a company with early-stage molecules underscores the excitement and potential of this field.

Lilly’s strategy mirrors its approach in obesity—entering later but leveraging deep resources and commercialization strength to compete in a multi-billion-dollar market. Beyond narcolepsy, orexin-based drugs may have broader applications. Centessa’s candidate is also being studied for idiopathic hypersomnia, and researchers suggest it could benefit sleep apnea, which affects over 23 million U.S. adults. Alkermes is exploring uses in ADHD, Parkinson’s disease, and fatigue related to multiple sclerosis.

Giovanni Mariggi, co-founder of Medicxi—which helped form Centessa through a merger of several biotechs—said these drugs not only promote wakefulness but also show potential cognitive benefits, which could be valuable for neurodegenerative conditions. Emmanuel Mignot, a Stanford sleep medicine professor, believes orexin agonists could find use in many medical areas involving sleepiness or sedation. Jim Tananbaum, founder of Foresite Capital, added that if clinical trials confirm applications beyond sleep disorders, it would represent a major market opportunity.