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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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.