The big drugmaker is buying a privately held company called Hypnion, which is developing a different insomnia treatments. Based outside Boston, Hypnion was founded by a handful of academics and has numerous venture capitalists on its board as well as Ed Scolnick, the former chief scientist at Merck, who now spends time at the Broad Institute in Cambridge.

Terms of the deal weren’t disclosed, but the move is clearly motivated by Lilly’s need to replace Zyprexa sales when the best-selling pill loses patent protection in 2011. The drug generated $4.8 billion last year. In that way, the acquisition reflects the urgent need big pharma has to buy what it can’t develop in its own labs - and do so as quickly as possible.

“The acquisition of Hypnion provides Lilly with a broader and more substantive presence in the area of sleep disorder research,” said Steven Paul, Lilly’s executive vice president of science and technology, in a statement.

One of Hypnion’s experimental pills, dubbed HY10275, works by targeting two chemical receptors - 5HT2a and H1 - that affect the ability to fall asleep and stay asleep. Hypnion is hopeful its drug won’t be classified as a controlled substance. An early study suggests it could keep people asleep at least as long as other drugs on the market.

Given Lilly’s aggressive marketing, this is the sort of thing that may keep the marketers at Sanofi and Sepracor awake at night.

[tags]Ed Scolnick, Eli Lilly, Insomnia, Sleeping Pills[/tags]