Eli Lilly nears deal to buy AtaiBeckley as shares surge 66%

Eli Lilly & Co. is in advanced talks to acquire psychedelic drugmaker AtaiBeckley Inc., according to people familiar with the matter, in a deal that would mark one of the largest big-pharma entries into the emerging field of psychedelic medicine.

AtaiBeckley shares soared 66% in aftermarket trading on the Bloomberg report, giving the New York-based company a market value of about $1.97 billion as of Wednesday's close. Eli Lilly shares were little changed. The companies could announce a deal as soon as this week, the people said, asking not to be identified because the discussions are private.

"Large pharma has been watching the psychedelic space from the sidelines for years, but the regulatory tailwind from the Trump administration has accelerated the timeline for entry," said Tom Brennan, an M&A analyst at Edgen. "AtaiBeckley's lead asset in treatment-resistant depression addresses a massive unmet need, and Lilly has the commercial infrastructure to maximize its potential."

Lilly is negotiating to buy AtaiBeckley at a premium to its undisturbed price, Bloomberg News reported, though the exact terms couldn't be learned. AtaiBeckley had already gained 31% this year before the report, after President Donald Trump ordered health regulators in April to speed up reviews of psychedelic treatments and increase federal funding for their research.

The acquisition target's lead pipeline candidate is BPL-003, an intranasal formulation of 5-MeO-DMT being developed for treatment-resistant depression. The psychedelic therapeutics market has drawn growing interest from major drugmakers as conventional antidepressants lose patent protection and patients seek alternatives with faster onset of action.

For Eli Lilly, a deal would expand its neuroscience portfolio beyond its blockbuster Alzheimer's drug donanemab and existing depression treatments. The Indianapolis-based pharmaceutical giant, which surpassed $1 trillion in market value last year, has been diversifying its pipeline through both internal research and targeted acquisitions.

The transaction would require clearance from the Federal Trade Commission and other regulatory bodies, though the timeline for approvals remains unclear. Neither Eli Lilly nor AtaiBeckley responded to requests for comment outside regular business hours.

This article is for informational purposes only and does not constitute investment advice.