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AtaiBeckley Stock Soars 50% on Report of Eli Lilly Takeover Talks
Shares of AtaiBeckley, a developer of psychedelic-based therapies, skyrocketed as much as 50% in premarket trading on Thursday following a report that Eli Lilly & Co. is in negotiations to acquire the company.
The Potential Deal
Late Wednesday, Bloomberg News reported that Eli Lilly was in talks to purchase AtaiBeckley, with a deal potentially being announced as soon as this week, according to people familiar with the matter. The report indicated the acquisition would be at a premium to AtaiBeckley's market value, which stood at $1.97 billion as of Wednesday's market close, based on LSEG data.
BMO Capital Markets analyst Evan Seigerman noted that while the deal could exceed $2 billion, ongoing discussions with other pharmaceutical firms might drive the final price higher. Neither Eli Lilly nor AtaiBeckley were immediately available for comment outside of regular business hours.
Sector-Wide Impact
The news triggered a broad rally among other companies in the psychedelic medicine space. In premarket trading on Thursday, shares of competitors also saw significant gains:
Ad- GH Research jumped 15%
- Compass Pathways gained 7%
- Definium Therapeutics climbed 6%
- Enveric Biosciences rose 3%
In contrast, shares of the potential acquirer, Eli Lilly, were flat before the bell.
Industry Context
The potential acquisition comes amid growing interest in psychedelic treatments for mental health conditions. AtaiBeckley's pipeline includes BPL-003, an intranasal formulation of 5-MeO-DMT being developed for treatment-resistant depression. The sector has seen increased investor attention this year, partly fueled by a U.S. executive order in April designed to accelerate access to such therapies.
RBC Capital Markets analyst Brian Abrahams said the psychedelic sector is likely to continue its rally and is "poised to emerge into the mainstream." The move would also align with Eli Lilly's recent strategy of expanding its presence in the neuroscience field through acquisitions.
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