Eli Lilly & Co. agreed to buy AtaiBeckley Inc. for as much as $3.8 billion, underscoring growing interest from large drugmakers in the once-fringe area of psychedelic medicine.
Lilly will pay $6.75 a share in cash plus as much as another $2.50 a share if drug-development milestones are met, according to a statement Thursday. The base price is 26% above where AtaiBeckley shares closed Wednesday. The announcement confirms a report by Bloomberg News that the companies were nearing a deal.
Shares of New York-based AtaiBeckley have more than doubled over the past year through Wednesday’s close. They jumped 32% at 9:35 a.m. on Thursday. Lilly fell 0.9%.
Bloomberg previously reported that AtaiBeckley was exploring options for a sale or partnership for its flagship drug, known as BPL-003. The medicine is a fast-acting nasal spray for treatment-resistant depression.
The deal deepens Lilly’s longstanding presence in neuroscience, an area where the company helped transform the treatment of depression with Prozac three decades ago.
While the Indianapolis-based drugmaker is now best known for its blockbuster obesity and diabetes medicines, it’s continued to invest in neuroscience, including treatments for Alzheimer’s disease and non-addictive pain drugs. Lilly has been eyeing the psychedelics space for a while, according to people familiar with the company’s thinking who requested anonymity discussing non-public matters.
The deal comes at a pivotal moment for psychedelic medicine. After years on the fringes of drug development, the field has been buoyed by the success of Johnson & Johnson’s Spravato, promising trial results and recent support from the Trump administration. Bloomberg Intelligence analysts say the psychedelic-treatment market could reach $7 billion in sales by 2032.
New Era
AtaiBeckley is one of several companies poised to usher in this new era. Besides treatment-resistant depression, the company, founded by German entrepreneur Christian Angermayer and backed by billionaire Peter Thiel, is developing drugs for social anxiety disorder.
In mid-stage studies, patients taking AtaiBeckley’s lead drug experienced meaningful improvements in depressive symptoms within just two days of a single dose, with benefits lasting up to eight weeks. The drug received Breakthrough Therapy designation from the US Food and Drug Administration.
Doctors, and the company, say one of BPL-003’s key benefits is its shorter treatment time. The drug’s psychedelic experience lasts roughly one to two hours, while a rival compound from Compass Pathways Plc may require patient monitoring for up to eight hours. GH Research Plc is developing a similar treatment.
“We really wanted something that was going to be patient friendly and doctor friendly,” AtaiBeckley Chief Executive Officer Srinivas Rao said in a recent interview at Bloomberg’s New York office. “Something that would drag and drop into the Spravato paradigm.”
Other companies working on psychedelics include Definium Therapeutics Inc., which is studying a promising LSD-based treatment for major depressive disorder, and AbbVie Inc.
Definium Therapeutics rose 4.2% in early trading Thursday on the Lilly announcement, while other companies involved in psychedelics also gained. Compass climbed 2.9%, Cybin Inc. advanced 8.7% and GH Research gained 8.4%.
Goldman Sachs Group Inc. advised Lilly on the deal, while AtaiBeckley worked with Moelis & Co. and Centerview Partners. Citigroup Inc. advised the AtaiBeckley board.
The upfront cash payment in the acquisition amounts to about $2.8 billion, with AtaiBeckley shareholders to receive another roughly $1 billion if all milestones are met, according to the statement.
Angermayer, in a post on X, said that when he started contemplating bringing psychedelics back into mainstream medicine in 2014, “it was widely seen as a crazy idea with virtually no chance of success. Today, psychedelic medicine feels almost inevitable. Back then, it was anything but.”
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