LLY.US (LLY.US) spent $3.8 billion to break into the psychedelic drug circuit! 26% premium to acquire ATAIBeckley (ATAI.US)

The Zhitong Finance App learned that LLY.US (LLY.US) has agreed to acquire AtaiBeckley Inc. (ATAI.US) at a price of up to $3.8 billion, which highlights the growing interest of large pharmaceutical companies in hallucinogenic drugs (psychedelic medicine), which was once a marginal field.

According to a statement on Thursday, Eli Lilly will pay $6.75 per share in cash and up to $2.50 per share if drug development milestones are reached. The underlying price was 26% higher than ATaiBeckley's close on Wednesday.

As of Wednesday, shares of New York-based ATaiBeckley have more than doubled in the past year. In Thursday's pre-market trading, the stock surged 34% to $7.19 as of press time.

AtaiBeckley is exploring options to sell or collaborate on its flagship drug called BPL-003.

The deal deepens Eli Lilly's long-term presence in the field of neuroscience medicine. Thirty years ago, Eli Lilly helped change the treatment of depression with Prozac (Prozac) and became famous in the field.

Eli Lilly is currently best known for its blockbuster obesity and diabetes medications, but it continues to invest in neuroscience, including Alzheimer's treatments and non-addictive pain relievers. According to people familiar with the matter, Eli Lilly has been focusing on the field of hallucinogens for some time.

This is a critical moment in the development of hallucinogenic drugs. After years on the edge of drug development, the field was fueled by the success of Johnson & Johnson Spravato, promising clinical trial results, and recent support from the Trump administration. Analysts say the hallucinogen treatment market could reach $7 billion in sales by 2032.

Psychedelics have become a new favorite in the market

AtaiBeckley is one of several companies that are poised to usher in this new era of hallucinogens. The company, founded by German entrepreneur Christian Angermeier and supported by billionaire Peter Thiel, is currently developing medications to treat intractable depression and social anxiety. Its primary drug candidate, BPL-003, is a fast-acting nasal spray.

In the mid-term study, patients experienced significant improvements in depressive symptoms within just two days of receiving a single dose, and the effects continued for up to eight weeks. The drug also received breakthrough therapy certification from the US Food and Drug Administration (FDA).

Doctors and the company say one of the core benefits of BPL-003 is its shorter treatment time. The drug's hallucinatory experience lasts approximately one to two hours, significantly shorter than some other experimental compounds (such as a Compass Pathways Plc product, which may require up to eight hours of patient monitoring). GH Research Plc is also developing a similar treatment.

AtaiBeckley CEO Srinivas Rao recently said in an interview, “We really want a product that is both patient-friendly and doctor-friendly,” and “a product that can be directly and seamlessly inserted into the Spravato model.”

Other companies in the field include Definium Therapeutics, which is investigating a promising LSD-based treatment for major depression, and AbbVie.

According to the statement, the acquisition's down payment is approximately $2.8 billion, and if all milestones are achieved, ATaiBeckley's shareholders will receive an additional $10 billion.