Eli Lilly Is Acquiring AtaiBeckley for $2.8 Billion. Cathie Wood Thinks Another Psychedelic Drug Stock Is an Even Better Bet.
Cathie Wood is loading up on shares of a biotech that could be one of the first entrants to the psychedelics market.
Overview
The psychedelic medicine field looks like it's finally about to take off, and that's catching the attention of portfolio managers like Cathie Wood. Eli Lilly (NYSE: LLY) agreed on July 16 to acquire the biotech AtaiBeckley (NASDAQ: ATAI) for a $2.8 billion upfront payment, with as much as $1 billion more in potential milestone payments. To put it lightly, a psychedelic nasal spray for treatment-resistant depression (TRD) is not the kind of pharmaceutical asset Lilly would have even considered touching five years ago.
Cathie Wood's Ark Genomic Revolution ETF sold 1.1 million shares of AtaiBeckley on the deal news, and promptly bought nearly 400,000 shares of one of its peers, Compass Pathways (NASDAQ: CMPS), the psilocybin drug developer that Wood has been accumulating for months. So why does she think that Compass is the better bet here?
Ark Invest CEO Cathie Wood. Image source: Getty Images.
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Originally published at www.fool.com.