Eli Lilly is expanding its presence in the neuroscience sector by acquiring AtaiBeckley, a clinical-stage company focused on psychedelic therapies for treatment-resistant depression and other mental health conditions. This $2.8 billion cash deal, announced on Thursday, includes potential additional payments of up to $1 billion to AtaiBeckley’s shareholders contingent upon hitting key drug development milestones.
AtaiBeckley’s lead drug candidate, BPL-003, utilizes 5-MeO-DMT, a psychedelic compound that targets serotonin receptors in the brain. This mechanism is thought to restore synaptic connections and encourage the formation of new neural pathways, presenting a novel approach compared to traditional antidepressants. However, BPL-003 is not suitable for oral administration due to rapid enzymatic breakdown in the intestine; instead, AtaiBeckley has formulated it for intranasal delivery.
Psychedelic treatments require clinical oversight to monitor for potential adverse effects. Earlier this year, AtaiBeckley reported Phase 2b results demonstrating rapid symptom relief in treatment-resistant depression patients on SSRIs, with a mean discharge time of 100 minutes post-administration. Furthermore, a single intranasal dose of BPL-003 proved to be effective for up to three months without significant side effects. The drug has since progressed to Phase 3 trials targeting this challenging patient population.
“Treatment-resistant depression persists even after multiple failed interventions,” said Carole Ho, Executive Vice President and President of Lilly Neuroscience, in a prepared statement. “Millions continue to seek relief and desperately need effective therapies. Advancing AtaiBeckley’s experimental therapies gives us a real chance to change that.”
BPL-003 may position Lilly as a direct competitor to Johnson & Johnson’s Spravato, an intranasally administered antidepressant that generated nearly $1.7 billion in revenue last year. Though classified as a form of ketamine rather than a psychedelic, Spravato can induce dissociative states and necessitates clinical administration.
In a research note, UBS analyst Michael Yee noted that the approximately two-hour monitoring period required for both Spravato and BPL-003 is manageable for patients. However, the sustainability of AtaiBeckley’s therapy may necessitate only four to six clinical visits annually, in stark contrast to the 50 or more visits typically required for Spravato. Lilly joins a growing list of major pharmaceutical companies pursuing psychedelic drug development; last year, AbbVie acquired the investigational therapy brétisilocine from Gilgamesh Pharmaceuticals for major depressive disorder.
AtaiBeckley was formed last year through a merger of Atai Life Sciences and Beckley Psytech, with BPL-003 being a product of Beckley. Atai contributed VLS-01, an oral DMT film formulation aimed at treatment-resistant depression, and EMP-01, an oral R-MDMA formulation for social anxiety disorder, with these programs currently at mid-stage clinical development.
The addition of AtaiBeckley’s products will enhance Lilly’s diverse pipeline, which includes brenipatide, a dual GLP-1 and GIP receptor agonist undergoing advanced testing for major depressive disorder and alcohol use disorder. Supported by revenues from approved GLP-1/GIP therapies for metabolic disorders, Lilly has embarked on an active merger and acquisition strategy, totaling 12 transactions this year, including efforts in neuroscience. Earlier this year, Lilly agreed to acquire Centessa Pharmaceuticals for $6.3 billion, which has potential applications in treating narcolepsy and other sleep disorders.
The initial payment from Lilly for AtaiBeckley stands at $6.75 per share, a 40% premium over the average stock price over the past month prior to the acquisition announcement. Lilly may further pay an additional $2.50 per share if BPL-003 and VLS-01 successfully progress through development and regulatory checkpoints. The acquisition still requires approval from regulators and AtaiBeckley shareholders, with Lilly aiming to finalize the transaction in the current quarter.
Photo: Richard Drury, Getty Images
