Centessa Pharmaceuticals plc 8-K

What Happened
On March 31, 2026 Centessa Pharmaceuticals plc announced it entered into a Transaction Agreement with Eli Lilly and Company (via its subsidiary LDH XV Corporation) under which Lilly will acquire Centessa by a UK court‑sanctioned scheme of arrangement. At the scheme Effective Time, Centessa will become a wholly owned subsidiary of the purchaser and each Centessa ordinary share will be entitled to $38.00 in cash plus one non-transferable contingent value right (CVR) per share that can pay up to an additional $9.00 per share if specified regulatory milestones are met.

Key Details

• Cash consideration: $38.00 per Centessa ordinary share (includes shares represented by ADSs).
• CVRs: up to $9.00 per share total, payable upon certain U.S. NDA approvals for ORX750 or ORX142:
  • $2.00 if an NDA for either product (any indication) is approved by 11:59 p.m. ET on Dec 31, 2029 (Indication Milestone).
  • $5.00 if an NDA for idiopathic hypersomnia is approved prior to the 5th anniversary of closing (IH Milestone).
  • $2.00 if an NDA for narcolepsy type 2 is approved prior to the 5th anniversary of closing (NT2 Milestone).
• Treatment of equity awards: in general, in‑the‑money options (exercise price < $38) are cashed out for the spread and receive 1 CVR per share; out‑of‑the‑money options may vest and be exercisable before the Effective Time; RSUs vest and are cancelled for cash equal to shares × $38 plus 1 CVR per share.
• Approvals and conditions: transaction requires Centessa shareholder approvals (statutory scheme thresholds, including ~75% value approvals), Court sanction, expiration/clearance under the HSR Act, customary closing conditions and no continuing Company Material Adverse Effect.
• Timing and termination: agreement may be terminated if not closed by Sept 30, 2026 (extendable to Mar 31, 2027 for HSR delays). Centessa may owe Lilly a termination fee of about $63 million in specified circumstances (including certain superior proposals).
• Support: affiliated investors (Medicxi, Index, General Atlantic affiliates) signed voting/support agreements and together beneficially own ~20% of outstanding shares (as of Mar 27, 2026). CVRs are contractual, non‑transferable, not equity, and carry no voting rights.

Why It Matters
For shareholders this is a proposed cash sale that provides immediate value of $38 per share plus potential upside (up to $9/share) tied to regulatory milestones for Centessa programs ORX750 and ORX142. The deal is subject to shareholder and court approval and U.S. antitrust review, so closing is not guaranteed and timing depends on regulatory and court processes. The agreement also affects outstanding equity awards (cash‑outs, vesting and exercise windows) and includes a significant termination fee, all of which are material to holders and employees. The company will file a proxy/scheme document with the SEC and shareholders are advised to review those materials when available before voting.