Eli Lilly is nearing a deal to acquire AtaiBeckley, a New York-based psychedelic drugmaker focused on mental health conditions. Reports indicate a potential announcement as early as this week. The contemplated acquisition price is expected to be at a premium to AtaiBeckley's current market valuation of approximately $2 billion, which itself saw a significant increase after reports of acquisition talks.
AtaiBeckley's shares surged by as much as 66% in aftermarket trading following the news, reflecting investor optimism. The company's market value stood at $1.97 billion as of Wednesday's close. This year, AtaiBeckley's stock has already risen by 31%, partly due to increased federal funding and accelerated reviews for psychedelic treatments ordered by President Donald Trump.
The potential acquisition would significantly expand Eli Lilly's neuroscience portfolio and mark a notable entry by a major pharmaceutical company into the psychedelic medicine sector. AtaiBeckley's lead drug, BPL-003, is an intranasal formulation of 5-MeO-DMT designed for treatment-resistant depression. This drug has received FDA Breakthrough Therapy designation, and mid-stage results have shown rapid improvement in depressive symptoms just two days after a single dose, with benefits lasting up to eight weeks. BPL-003 is notable for its shorter clinical session, with psychedelic effects typically resolving within 90 minutes, and the FDA is reportedly comfortable with patients being discharged after two hours.
Analysts, such as Magnus Sigurdsson of Systematic Ventures and Iron Pine Ventures, estimate a likely takeover price between $9 and $11 per share, representing up to a 105% upside from the last close. Sigurdsson believes that Eli Lilly's decision to buy the entire company, rather than just license the drug, suggests confidence in AtaiBeckley's pipeline and market position. He also noted that a rival bidder is unlikely given the formal sale process AtaiBeckley initiated in March for its lead drug, BPL-003.
The acquisition talks follow the FDA's recent issuance of final guidance for psychedelic drug trials, which outlines stricter standards for study design, safety monitoring, abuse potential, and long-term follow-up. This guidance addresses challenges unique to psychedelic trials, such as "functional unblinding" and the need to document effects like hallucinations as adverse events. Despite these regulatory complexities, Eli Lilly's impending deal underscores growing interest in psychedelic-based therapies for mental health conditions.
