Eli Lilly to buy AtaiBeckley in up to $3.8bn neuroscience deal

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Eli Lilly acquires AtaiBeckley

Highlights

Eli Lilly will acquire AtaiBeckley for $2.8bn cash plus up to $1bn in milestones, valuing the company above its $2bn market value.
AtaiBeckley's pipeline includes phase-three nasal 5-MeO-DMT for treatment-resistant depression and a mid-stage MDMA variant for social anxiety disorder.
Eli Lilly's deal follows similar psychedelic-focused biotech acquisitions by AbbVie and Otsuka, amid rising investor interest and favorable U.S. regulatory moves.

Acquisition terms and pipeline expansion

As reported by Financial Times, Eli Lilly says it will pay $2.8bn in cash for AtaiBeckley and a further $1bn if specified milestones are achieved. The Indianapolis-based drugmaker announces the deal on Thursday, valuing the company at a premium to its nearly $2bn market value at Wednesday’s close.

AtaiBeckley is formed last year through the merger of Atai Life Sciences, founded by Christian Angermayer, and UK-based Beckley Psytech. The biotech is studying a nasal spray using hallucinogen 5-MeO-DMT in phase-three trials for treatment-resistant depression, and is also testing a variant of MDMA in mid-stage trials for social anxiety disorder.

Carole Ho, executive vice-president and president at Lilly Neuroscience, says millions of patients with treatment-resistant depression continue to seek relief after multiple therapies fail. The purchase adds to a series of Lilly deals this year as the company uses strong cash flow from Zepbound and Mounjaro to strengthen its research pipeline.

Psychedelic drug sector draws larger buyers

The takeover marks another instance of a large pharmaceutical group buying a biotech focused on mind-altering drugs for mental health treatment, following similar acquisitions by AbbVie and Japan’s Otsuka. Investor interest in psychedelic-focused biotechs also rises with support from the Make America Healthy Again movement promoted by U.S. health secretary Robert F. Kennedy Jr.

President Donald Trump signs an executive order in April that prompts the Food and Drug Administration to accelerate approvals for psychedelic drugs, sending shares of AtaiBeckley and other listed companies in the sector sharply higher. Angermayer, the company’s chair, speaks at a Maha summit in November to promote the potential benefits of psychedelics.

Angermayer remains AtaiBeckley’s largest investor with a 14.5 per cent stake through Apeiron Investment Group, while PayPal co-founder Peter Thiel co-leads one of Atai’s early private funding rounds. Before its weight-loss medicines lift its market capitalisation to nearly $1.1tn, Lilly is already known as a major psychiatric drugmaker through depression treatments including Prozac and Cymbalta.

Our earlier coverage focused on Eli Lilly’s reported approach to acquire AtaiBeckley at a premium, which sparked a sharp premarket surge in the target’s shares. We also noted that the takeover chatter helped lift the broader psychedelic-drug space, as investors weighed growing interest from big pharma alongside regulatory momentum following the April executive order.

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