Eli Lilly officially to acquire psychedelics drugmaker AtaiBeckley for $3.8 bln
The first pharma company with a market cap over $1 trln is expanding its portfolio
The transaction gives Eli Lilly access to AtaiBeckley’s experimental drug being studied in phase III clinical trials for treatment-resistant depression / Photo: Shutterstock.com / Tada Images
U.S. pharmaceutical giant Eli Lilly has officially agreed to acquire biotech AtaiBeckley for up to $3.8 billion, strengthening its position in the promising market for psychedelic treatments for depression and other mental health conditions, Reuters reports. The deal will thus give Eli Lilly access to a promising late-stage treatment for a severe form of depression.
Details
Eli Lilly will pay $6.75 per share for AtaiBeckley, representing a premium of around 26% to the Wednesday closing price, the last before the deal was announced. The total consideration comprises $2.8 billion upfront and up to $1 billion in additional payments upon achieving specified development milestones. The companies expect the deal to close in the third quarter.
AtaiBeckley’s lead asset is BPL-003, a psychedelic-based nasal spray for treatment-resistant depression, a severe form of the illness that does not respond to standard therapies, Reuters notes. AtaiBeckley expects initial results from late-stage clinical trials of BPL-003 in early 2029, the news agency added. The small biotech’s shares closed 33% higher on Thursday.
Annual sales of BPL-003 could exceed $1-2 billion if the drug succeeds in clinical trials, Jefferies analyst Andrew Tsai estimates. “The acquisition aligns with Eli Lilly's expanding neuroscience portfolio and offers upside potential in large markets like depression,” Reuters quoted Barclays analyst Emily Field as saying. The global psychedelics market could grow 50% to $12 billion by 2034, according to an RBC Capital Markets estimate cited by Reuters.
Pharmaceutical companies’ interest in psychedelic therapies has grown markedly since the Trump administration directed regulators in April to accelerate reviews of certain such treatments and expanded federal support for research in the field.
Stock performance
Eli Lilly shares ended Thursday up 1.1% and have now gained 8.8% year to date. In November, Eli Lilly became the first pharmaceutical company ever to surpass a market capitalization of $1 trillion. The average target price on Wall Street is currently $1,307 per share, implying 11% upside from the closing price on Thursday. The stock has 26 “buy” or “overweight” calls, versus three “hold” and two “sell” or “underweight” ratings, according to MarketWatch data.
