Shares of AtaiBeckley (NASDAQ: ATAI) surged on Thursday after the mental health-focused biotechnology company agreed to be acquired by pharmaceutical giant Eli Lilly (NYSE: LLY).
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
A sizable premium for AtaiBeckley’s shareholders
Under the terms of the deal, Lilly will purchase AtaiBeckley for $6.75 per share in cash. The healthcare leader will also pay up to $2.50 per share in additional milestone payments if certain development and regulatory goals are achieved.
AtaiBeckley’s stock price closed at $5.36 on Wednesday.
The upfront cash equates to roughly $2.8 billion, while the potential milestone payments could amount to another $1 billion, for a total purchase valuation of about $3.8 billion for AtaiBeckley if all conditions are met.
The deal is projected to close in the third quarter, subject to shareholder and regulatory approval.
New methods for treating depression
Recent research suggests that a loss of the brain’s ability to strengthen connections in regions that regulate mood could be a factor in depression and other mental health conditions.
AtaiBeckley’s therapies are designed to support the growth of new neural connections — a novel approach compared to traditional antidepressants that influence neurotransmitter levels.
“Across our portfolio, we’re seeking to demonstrate that psychiatric illness is treatable at its biological root, not just its symptoms,” AtaiBeckley CEO Srinivas Rao said. “Lilly’s expertise and reach are expected to accelerate that work for people whose conditions have not responded to existing treatments.”
AtaiBeckley’s lead drug, BPL-003, is a synthetic form of 5-MeO-DMT — a powerful, naturally occurring psychedelic compound — administered as a nasal spray for treatment-resistant depression.
After BPL-003 showed an encouraging ability to reduce depressive symptoms in a Phase 2b clinical trial, the experimental drug was granted Breakthrough Therapy Designation by the U.S. Food and Drug Administration (FDA). BPL-003 is currently in Phase 3 trials.
Should you buy stock in Eli Lilly right now?
Before you buy stock in Eli Lilly, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Eli Lilly wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.
