Lilly buys into psychedelics with $3.8bn AtaiBeckley deal

Just a few months after it was formed by a merger of two psychedelic drug developers, AtaiBeckley has been snapped up by Eli Lilly, which is currently on a massive acquisition and licensing spree fuelled by burgeoning sales of its weight-loss and diabetes therapies.

Lilly is paying $6.75 per share in cash for AtaiBeckley, for a consideration of $2.8 billion, with another $2.50 on offer in the form of contingent value rights (CVR) – worth up to $1 billion - linked to development and regulatory milestones for the psychedelic medicine company's two lead programmes.

Those are BPL-003, an intranasal formulation of mebufotenin benzoate that generated positive results in a phase 2b trial in treatment-resistant depression (TRD) just before Germany's atai Life Sciences and UK-based Beckley Psytech merged last November, and VLS-01, a buccal film formulation of DMT for major depressive disorder (MDD). BPL-003 is now starting a phase 3 programme, while VLS-01 is in a phase 2b study.

Following after in AtaiBeckley's pipeline are oral MDMA therapy EMP-01 for social anxiety, in midstage clinical development, as well as a portfolio of novel 5-HT2A receptor agonists, including non-hallucinogenic neuroplastogens, in preclinical development.

There has been quite a lot of consolidation among small players in the psychedelics field already, but Lilly's decision to move into the category with a multibillion-dollar transaction has taken that to a higher level.

Lilly said in a statement that buying AtaiBeckley will expand its neuroscience pipeline to address some of the most challenging conditions in mental health, noting that TRD affects millions of people and BPL-003 has the potential to provide a desperately needed new treatment option.

In the phase 2b study, two doses of BPL-003 achieved significant reductions in depressive symptoms following a single in-clinic visit, lasting approximately two hours on average, with beneficial effects persisting for months. The psychedelic is administered in controlled circumstances, with psychological support, and the trial result earned the drug breakthrough therapy status from the FDA.

"Across our portfolio, we're seeking to demonstrate that psychiatric illness is treatable at its biological root, not just its symptoms," said Srinivas Rao, co-founder and chief executive of AtaiBeckley.

"Lilly's expertise and reach are expected to accelerate that work for people whose conditions have not responded to existing treatments."

The takeover is due to complete in the third quarter, and is believed to be Lilly's eighth acquisition of the year so far, with a collective, top-line value – including pledged milestones and CVRs – of around $26 billion.

Along with agreeing to buy a trio of companies in the infectious diseases arena in May, the pharma group has also signed takeover deals for obesity and diabetes drug developer Kelonia, sleep disorder specialist Centessa Pharma, in vivo CAR-T therapy developer Orna Therapeutics, and immunology-focused Ventyx Bio.