Eli Lilly Is Acquiring a Psychedelic Medicine Biotech. Here's What You Need to Know.
Lilly's purchase of AtaiBeckley is yet another strategic move in its bid to diversify its pipeline.
Overview
Eli Lilly (NYSE: LLY) has spent the past two years reinvesting the cash flow from its spectacularly successful GLP-1 drug into building out its pipeline, and it just made a diversification play unlike any of the others it has made recently. On July 16, the company said it will acquire AtaiBeckley (NASDAQ: ATAI), a clinical-stage biotech developing psychedelic molecules intended to work as therapies for hard-to-treat mental illnesses.
With the deal expected to close in September, Lilly will pay nearly $2.8 billion, with another $1 billion possible through milestones.
Details
That's especially surprising considering that psychedelic medicine spent the past two years being written off as a dead zone after regulatory setbacks, only to now be increasingly mainstreamed by a federal policy pivot. Here's what you need to know about how the purchase of Atai is going to affect the investment thesis for Eli Lilly.
Source
Originally published at www.fool.com.