AtaiBeckley shares jump on report of Eli Lilly acquisition talks

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AtaiBeckley shares jump on Eli Lilly talks

Highlights

AtaiBeckley shares surge 50% premarket after Bloomberg reports Eli Lilly is in advanced talks to acquire the company at a premium, possibly this week.
AtaiBeckley, with a $1.97 billion market value and 31% year-to-date gain, could see a deal exceed $2 billion amid interest from additional pharmaceutical firms.
Psychedelic drug sector rallies further, with Compass Pathways up 7%, GH Research up 15%, driven by acquisition activity and regulatory tailwinds from the April executive order.

Acquisition talks drive sharp premarket move

As first reported by Reuters, citing Bloomberg News, Eli Lilly is negotiating to acquire AtaiBeckley at a premium and could reach an agreement as soon as this week, citing people familiar with the matter. The report sends AtaiBeckley shares up 50% before the bell on Thursday, while Lilly shares are flat.

New York-based AtaiBeckley has gained 31% so far this year, giving it a market value of $1.97 billion as of Wednesday's close, according to LSEG data. BMO Capital Markets analyst Evan Seigerman says the deal could exceed $2 billion, while ongoing talks with additional pharmaceutical companies could support a higher takeout price.

Eli Lilly and AtaiBeckley are not immediately available for comment outside regular business hours. AtaiBeckley focuses on psychedelic-based treatments for mental health conditions and is developing BPL-003, an intranasal formulation of 5-MeO-DMT for treatment-resistant depression.

Psychedelic drug sector gains broader momentum

Shares of other psychedelic drug developers also rise in premarket trading on Thursday, with Compass Pathways up 7%, GH Research jumping 15%, Definium Therapeutics climbing 6% and Enveric Biosciences rising 3%. The gains build on an industrywide rally after U.S. President Donald Trump's executive order in April aimed at speeding access to treatment based on psychedelic drugs.

Analysts and health experts say the order is expected to shorten administrative timelines and attract more capital to the sector. RBC Capital Markets analyst Brian Abrahams says the psychedelic drug industry is likely to continue its rally and is poised to move into the mainstream.

Lilly has been on an acquisition spree, particularly in neuroscience, highlighted by its $7.8 billion buyout of sleep-disorder drugmaker Centessa Pharmaceuticals.

Our earlier article covered GSK’s completion of its $10.6 billion acquisition of Nuvalent, a deal aimed at strengthening its oncology pipeline with clinical-stage lung cancer assets. We also noted that, despite the strategic rationale, GSK’s shares were showing bearish technical signals and were expected to remain range-bound unless key resistance levels were cleared.

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