Eli Lilly (LLY, Financials), a global pharmaceutical company best known for diabetes, obesity and neuroscience treatments, has agreed to buy AtaiBeckley for as much as $3.8 billion.
The deal brings Lilly into the growing market for psychedelic-based medicines. Its main prize is BPL-003, a nasal spray being developed for treatment-resistant depression, a serious condition that does not improve with standard therapies.
Lilly will pay $6.75 per share in cash, or about $2.8 billion upfront. AtaiBeckley shareholders could receive another $1 billion if the drug reaches certain development milestones.
The offer represents a roughly 26% premium to AtaiBeckley's previous closing price. Its shares jumped more than 30% after the announcement.
BPL-003 is already in late-stage testing, though initial results are not expected until 2029. Jefferies estimates the drug could eventually generate annual sales of $1 billion to $2 billion if trials succeed.
The acquisition gives Lilly another way to diversify beyond its fast-growing weight-loss business. It also strengthens the company's neuroscience pipeline at a time when larger drugmakers are showing more interest in psychedelic therapies.
The next catalyst will be the deal's expected closing in the third quarter, followed by updates from BPL-003's clinical program.