Eli Lilly agrees $2.8bn AtaiBeckley deal for psychedelic pipeline

Eli Lilly said Thursday it will buy psychedelic drug developer AtaiBeckley for $2.8 billion in upfront cash, adding experimental mental health treatments to the drugmaker’s pipeline. The agreed price of $6.75 a share represents a 26% premium to AtaiBeckley’s Wednesday closing price of $5.36, according to the company figures reported in the announcement.

The deal would give Lilly control of AtaiBeckley’s lead medicine, BPL-003, a nasal spray related to dimethyltryptamine, or DMT. The drug is being tested in Phase 3 clinical trials for treatment-resistant depression, with initial results expected in 2029, according to Eli Lilly.

AtaiBeckley’s program is designed for administration in a clinical setting. Patients receiving BPL-003 are monitored for roughly two hours after the nasal spray is given, reflecting the need for supervision when drugs with psychedelic properties are used in a medical context.

Milestone payments could lift the value

Under the transaction terms, Lilly may pay as much as an additional $2.50 a share if AtaiBeckley’s drugs achieve specified development and regulatory milestones. That contingent element could add up to $1 billion to the transaction value, according to the terms disclosed by the companies.

The structure separates the guaranteed cash consideration from payments tied to future progress. In practice, shareholders receive the upfront price if the deal closes, while the extra value depends on whether the acquired programs clear agreed clinical or regulatory thresholds.

AtaiBeckley is also developing other psychedelic-based treatments for mental health conditions. Its pipeline includes a medicine related to MDMA, commonly known as ecstasy, according to the company information cited in the announcement.

Lilly expands beyond its largest growth engines

The acquisition adds to a series of Lilly transactions this year. Before the AtaiBeckley agreement, the company had said it would spend more than $10 billion upfront across eight acquisitions, with potential total payments of as much as $25 billion if contingent terms are met, according to CNBC.

Lilly has been pursuing later-stage assets, which tend to carry higher prices than earlier research programs because they have already advanced further through clinical testing. The strategy comes as Lilly holds the position of the world’s most valuable health-care company, a status supported by investor demand for its weight-loss and diabetes medicines.

The AtaiBeckley transaction also comes as psychedelic-based drug research draws greater policy attention in the United States. CNBC has reported that the Trump administration has prioritized development of treatments derived from psychedelics for mental health conditions, including depression and post-traumatic stress disorder.

AtaiBeckley shares rose more than 30% in premarket trading after the deal was announced, according to CNBC. Lilly shares were little changed in the quoted market data accompanying the announcement.

This story draws on original reporting from CNBC.