The pharma giant Eli Lilly and Company has agreed to buy the biotech firm AtaiBeckley, expanding its neuroscience profile and giving it a foothold in the growing psychedelics arena.
Lilly will buy the outstanding shares of AtaiBeckley for $6.75 each, for a total up-front value of $2.8 billion. It has also agreed to potential milestone payments of up to $2.50 per share for a potential total of up to $1 billion.
AtaiBeckley’s lead drug candidate, BPL-003 or mebufotenin benzoate, is a synthetic form of 5-methoxy-N,N-dimethyltryptamine (5-MeO-DMT), a powerful psychedelic substance that is naturally secreted from the skin of the Colorado River toad (Incilius alvarius). AtaiBeckley has secured a breakthrough therapy designation for BPL-003 from US regulators, and it has begun Phase 3 clinical trials as a potential therapeutic for treatment-resistant depression.
As the pharmaceutical industry gains confidence in psychedelics, and as the Donald J. Trump administration takes steps to speed up psychedelics research, more of these drugs are being seen as an attractive option for intractable, treatment-resistant depression.
For Lilly, the planned purchase continues a biotech buying binge, heavily funded by the blockbuster success of glucagon-like peptide 1 (GLP-1) drugs like Zepbound, which brought in about half of Lilly’s $65.2 billion in revenue last year. So far this year, Lilly has bought 11 firms, including the inflammatory-disease biotech Ventyx Biosciences for $1.2 billion, three vaccine companies for $3.8 billion in total, and the narcolepsy-drug firm Centessa Pharmaceuticals for $6.3 billion.
Michael Yee, an analyst at the investment bank UBS, says in a report to clients that other big drug companies are also investing in psychedelics. Johnson & Johnson’s Spravato is on track to post about $2.5 billion in sales this year, and AbbVie recently acquired another psychedelics firm, Gilgamesh Pharma, for up to $1.2 billion.
Yee says BPL-003 could require only four to six visits or doses per year, while Spravato may require more than 50. He notes that Spravato is based on ketamine, which means it has a different mechanism of action than 5-MeO-DMT does.
