Shares of a small-cap psychedelic drug developer have soared. Eli Lilly may acquire the company.

Shares of AtaiBeckley, a small-cap developer of drugs for treating depression and social anxiety disorder, soared by more than 57% in after-hours trading on July 15. The rally was triggered by a Bloomberg report: citing sources, the agency reported that pharmaceutical giant Eli Lilly is interested in acquiring the company. This comes amid a relaxation of regulations in the psychedelics sector in the U.S.

AtaiBeckley shares rose more than 57% in premarket trading on July 16, reaching $8.4. This came after Bloomberg, citing sources, reported that Eli Lilly is in talks to acquire the company and could announce the takeover as early as this week.

Sources speaking to Bloomberg did not disclose the amount of the potential deal; however, according to their information, it involves an acquisition at a premium to the market price. At the close of trading on July 15, AtaiBeckley’s market capitalization stood at $1.98 billion.

The deal, if it goes through, will strengthen Eli Lilly’s position in the market for neurobiological drugs, where “three decades ago, the company revolutionized the treatment of depression with its drug Prozac,” Bloomberg reports. Eli Lilly declined to comment to the agency.

AtaiBeckley is one of several companies poised to usher in a new era in the psychedelics sector, according to Bloomberg. It was founded in 2025 as a result of a merger between atai Life Sciences, owned by German businessman Christian Angermayer, and Beckley Psytech.

One of its first investors was Peter Thiel, co-founder of Palantir and PayPal. “Atai’s main strength is that it treats mental illness as seriously as we should treat all illnesses,” Thiel told CNBC in 2021.

The small-cap company currently has three main drug candidates in its pipeline; two of them are in mid-stage clinical trials, while the third, BPL-003, is in the final stage. It is intended to treat treatment-resistant depression and is a fast-acting nasal spray.

"We really wanted to create something that would be convenient for both patients and doctors," Bloomberg quotes AtaiBeckley CEO Srinivas Rao as saying.

In early March, the agency reported, citing sources, that the company had hired Jefferies and JPMorgan to explore options for commercializing BPL-003. These options could include both a sale and partnerships with other pharmaceutical companies, sources told Bloomberg. According to their information, AtaiBeckley plans to raise at least $2 billion from the deal.

News of Eli Lilly’s interest in AtaiBeckley came at a “turning point” for the psychedelics sector, according to Bloomberg. After many years on the sidelines, this field has gained momentum thanks to the success of Johnson & Johnson’s Spravato and support from the administration of U.S. President Donald Trump.

In April, Trump signed an executive order aimed at accelerating research and expanding patient access to psychedelics intended to treat post-traumatic stress disorder (PTSD), but which are not yet in use in the United States.

This led to a surge in the stock prices of drug companies working in this field. Oppenheimer analyst Jay Olson, speaking with Bloomberg, called the executive order “a structural turning point for the U.S. psychedelics sector.”

Since the beginning of the year, AtaiBeckley's stock price has jumped 31%.

Fifteen Wall Street analysts are tracking the company's performance, and all of them unanimously recommend buying its stock. The average price target is $13.85, which is 2.4 times higher than the stock's closing price on July 15.