Eli Lilly has agreed to acquire Atai Beckley, a psychedelic biotech chaired by Christian Angermayer and backed by Peter Thiel, for up to $3.8bn. The Indianapolis-based drugmaker will pay $2.8bn in cash plus $1bn in milestone payments, a premium to Atai Beckley's nearly $2bn market value. The deal follows similar acquisitions by AbbVie and Otsuka as large pharma targets mental health treatments.

Atai Beckley, formed from a merger of Atai Life Sciences and UK-based Beckley Psytech, is studying a nasal spray using hallucinogen 5-MeO-DMT in phase-three trials for treatment-resistant depression, and an MDMA variant for social anxiety disorder. The sector has gained momentum from the Make America Healthy Again movement championed by Robert F Kennedy Jr. and a Trump executive order accelerating FDA approvals for psychedelic drugs.

The acquisition continues Eli Lilly's aggressive dealmaking fueled by blockbuster weight-loss drugs Zepbound and Mounjaro, which have driven its market capitalisation to nearly $1.1tn. Lilly has invested up to $28.8bn in biotech deals this year, including takeovers of Centessa Pharmaceuticals and Kelonia Therapeutics. The spree reflects a broader upswing in biotech M&A, with $206bn in deals recorded by early July, per LSEG.