Lilly to buy Hypnion for insomnia pipeline

Drugmaker wants experimental drug for $2 billion insomnia market; terms not disclosed.

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Eli Lilly & Co. agreed to buy Hypnion, a privately owned company specializing in treatments for sleep disorders, the companies said Monday.

Lilly (down $0.29 to $51.48, Charts), an Indianapolis-based drug maker, said the merger with Lexington, Mass.-based Hypnion is expected to close towards the end of the first quarter, 2007, according to the companies.

Steven Paul, executive vice president for Lilly, said in a statement that his company was interesting in Hypnion's insomnia research, particularly its experimental insomnia treatment called HY-10275.

Lilly spokesman Mark Taylor did not disclose the price of the deal, and told CNNMoney.com that HY-10275 is years away from potential market approval.

Hypnion said in January it had successfully completed mid-stage testing for HY-10275. But the drug has to successfully complete late-stage testing before it can be submitted for review by regulators at the Food and Drug Administration.

The market for sleeping pills, estimated at about $2 billion, is getting crowded. Ambien, the insomnia drug from the French drugmaker Sanofi-Aventis (down $0.13 to $41.82, Charts), has gotten squeezed by newer products like Rozerem from Takeda Pharmaceutical and Lunesta from Sepracor Inc. (up $0.48 to $49.93, Charts)

The next new insomnia drug could come from Somaxon Pharmaceuticals (up $0.15 to $11.93, Charts), a San Diego drugmaker that has competed late-stage testing for its experimental drug Silenor. Vanda Pharmaceuticals (up $0.64 to $23.88, Charts) is also conducting late-stage testing on an insomnia drug, called VEC-162.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.