Lilly to acquire AtaiBeckley to add rapid-acting neuroplastogen pipeline

Transaction terms

The agreement calls for acquisition of all outstanding AtaiBeckley common shares for $6.75 per share in cash at closing plus up to $2.50 per share in Contingent Value Rights (CVRs) tied to development and regulatory milestones. The upfront cash consideration implies an aggregate equity value of approximately $2.8 billion and the CVRs represent up to approximately $1.0 billion of additional potential equity value. The deal is not subject to any financing condition, has board approval from both companies and is expected to close in the third quarter, subject to AtaiBeckley stockholder approval and customary closing conditions.

Pipeline and clinical data

The acquisition brings a portfolio of rapid-acting neuroplastogens. The lead asset, BPL-003 (mebufotenin benzoate), is a synthetic form of 5-MeO-DMT administered intranasally for treatment-resistant depression; in a Phase 2b study it produced rapid, durable reductions in depressive symptoms after an average in-clinic visit of about two hours, with effects persisting for months, and has been granted Breakthrough Therapy Designation and initiated Phase 3 activities. VLS-01, a buccal DMT film, is advancing in an ongoing Phase 2b study.

CVR milestones and timing

CVR payments are structured as: $1.00 per share if a Phase 3 trial of VLS-01 is initiated prior to the fourth anniversary of closing; $0.50 per share upon U.S. regulatory approval and DEA rescheduling of BPL-003 prior to the fifth anniversary of closing; and $1.00 per share upon U.S. regulatory approval and DEA rescheduling of VLS-01 prior to the seventh anniversary of closing. There is no guarantee any CVR payments will be made.

Approvals, governance and advisors

The transaction remains subject to customary regulatory approvals. Apeiron Investment Group and AtaiBeckley directors and officers have signed voting agreements representing about 15% of outstanding shares in support of the deal. Goldman Sachs and Ropes & Gray advise the acquirer; Moelis, Centerview and Latham & Watkins advise AtaiBeckley, with Citi providing additional financial advice. Lilly will determine the GAAP accounting treatment upon closing and reflect the transaction in its financial results and guidance.