According to individuals familiar with the matter, Eli Lilly (LLY.US) is in discussions to acquire Atai Beckley Inc (ATAI.US), highlighting the growing interest from large pharmaceutical companies in the psychedelics sector, once considered a niche field.
A deal could be announced as early as this week. The news of the potential acquisition drove shares of Atai Beckley Inc up by 65% in after-hours trading Wednesday. Over the past 12 months, the New York-based company's stock has more than doubled, giving it a market value of approximately $2 billion.
The sources indicate that Eli Lilly is negotiating a takeover at a premium. Eli Lilly declined to comment. There have been previous reports that Atai Beckley Inc was considering selling or seeking a partnership for its flagship drug, BPL-003.
This transaction would deepen Eli Lilly's long-standing commitment to neuroscience, a field it helped transform three decades ago with its antidepressant Prozac. While the company is now renowned for its blockbuster obesity and diabetes drugs, it has continued to invest in neuroscience, including therapies for Alzheimer’s disease and non-addictive painkillers.
Insiders reveal that Eli Lilly has been monitoring the psychedelics space. Psychedelics are psychoactive compounds that can alter human consciousness and perception. Long labeled as dangerous substances, numerous studies now suggest significant therapeutic potential for these agents in treating mental health conditions like depression and addiction.
For years, this area remained at the fringes of drug development, but the commercial success of Johnson & Johnson's Spravato, promising clinical trial results, and recent supportive policies from the U.S. government have revitalized the field. Analysts project the psychedelics drug market could reach $7 billion in sales by 2032.
With major players entering the arena, is a new era for psychedelic medicine dawning? Atai Beckley Inc is among the companies poised to lead this potential new wave. Founded by German entrepreneur Christian Angermayer and backed by billionaire Peter Thiel, the firm is developing treatments for treatment-resistant depression and social anxiety disorder.
Its lead candidate, BPL-003, is a fast-acting nasal spray. Mid-stage studies showed patients experienced significant improvement in depressive symptoms just two days after a single dose, with effects lasting up to eight weeks. The drug has also received Breakthrough Therapy designation from the U.S. Food and Drug Administration.
Doctors and the company state that a key advantage of BPL-003 is its shorter treatment duration. Its psychedelic effects last about one to two hours, significantly less than other experimental compounds, such as one from Compass Pathways, which may require monitoring patients for up to eight hours. GH Research is developing a similar therapy.
"What we really want is a product that is patient- and physician-friendly," Atai Beckley Inc CEO Srinivas Rao recently stated. "A product that can directly fit into the Spravato model."
Other companies in this space include Definium Therapeutics and AbbVie. Definium Therapeutics is reportedly researching a promising therapy for major depressive disorder based on the potent psychedelic LSD. AbbVie last year acquired the experimental antidepressant bretisilocin from Gilgamesh for $1.2 billion; this next-generation psychedelic compound aims to retain antidepressant efficacy while shortening the psychoactive experience, overcoming regulatory and safety challenges associated with traditional psychedelic drug development.
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