Lilly (LLY.US) splurges $3.8 billion to enter the psychedelic drug track! Acquires Atai Beckley (ATAI.US) at a 26% premium.

US pharmaceutical company LLY.US has agreed to acquire AtaiBeckley Inc. (ATAI.US) for up to $3.8 billion, highlighting the growing interest of large pharmaceutical companies in the once niche field of psychedelic medicine. According to a statement on Thursday, LLY will pay $6.75 per share in cash, with an additional payment of up to $2.50 per share if certain drug development milestones are met. The base price represents a 26% premium over AtaiBeckley's closing price on Wednesday. As of Wednesday, AtaiBeckley, based in New York, has more than doubled its stock price over the past year. In pre-market trading on Thursday, the stock soared 34% to $7.19 per share. AtaiBeckley is exploring options for selling or partnering its flagship drug, BPL-003. This deal deepens LLY's long-term positioning in the field of neuroscience drugs. Thirty years ago, LLY helped change the treatment of depression with Prozac and gained fame in the field. LLY is currently best known for its blockbuster obesity and diabetes drugs, but it continues to invest in neuroscience, including treatments for Alzheimer's and non-addictive pain relief. Sources say LLY has been eyeing the psychedelic field for some time. This comes at a crucial time for psychedelic drug development. After lingering on the fringes of drug development for years, the field has seen success with Johnson & Johnson's Spravato, promising clinical trials, and recent support from the Trump administration. Analysts predict that the psychedelic therapy market could reach $7 billion by 2032. AtaiBeckley is one of several companies poised to lead this new era of psychedelic drugs. Founded by German entrepreneur Christian Angermayer and backed by billionaire Peter Thiel, the company is developing drugs for treatment-resistant depression and social anxiety, with its main candidate BPL-003 being a fast-acting nasal spray. In mid-term studies, patients showed significant improvement in depression symptoms within just two days of a single dose, with effects lasting up to eight weeks. The drug has also received breakthrough therapy designation from the FDA. Doctors and the company say one of the core advantages of BPL-003 is its shorter treatment time. The drug's hallucinatory experience lasts about one to two hours, much shorter than some experimental compounds (such as one from Compass Pathways Plc which may require up to eight hours of monitoring). GH Research Plc is also developing a similar treatment. AtaiBeckley CEO Srinivas Rao recently said in an interview, "We really want a patient-friendly, doctor-friendly product," "A product that can seamlessly fit into the Spravato model." Other companies in this field include Definium Therapeutics (which is studying a promising LSD-based treatment for severe depression) and Abbvie. The deal includes an initial cash payment of approximately $2.8 billion, with AtaiBeckley shareholders potentially receiving an additional $1 billion if all milestones are achieved.