Eli Lilly’s Psychedelic Treatment-Resistant Depression Play

Treatment-resistant depression poses some of neuroscience’s most challenging questions.

In a bid to expand its neuroscience pipeline and improve treatment of this largely incurable condition, Eli Lilly is set to acquire AtaiBeckley, marking a significant step in the development of next-generation mental health treatments.

The deal, which could be worth up to US$3.8bn, marks Eli Lilly’s first foray into the psychedelic-based drug discovery market.

“Treatment-resistant depression persists even after multiple treatments have failed. Millions of people are still searching for relief and desperately need a therapy that works,” says Carole Ho, Executive Vice President at Eli Lilly and President at Lilly Neuroscience. 

“Advancing AtaiBeckley's investigational therapies gives us a real chance to change that.”

A novel approach to depression treatment

AtaiBeckley is developing a pipeline of rapid-acting neuroplastogens, spanning multiple clinical-stage programmes alongside a discovery platform focused on next-generation compounds.

Its lead candidate, BPL-003 (mebufotenin benzoate), is a synthetic formulation of 5-MeO-DMT delivered intranasally for the treatment of treatment-resistant depression, a condition affecting millions of people in the United States.

Emerging evidence suggests that treatment-resistant depression and other severe mental health disorders may be associated with impaired synaptic plasticity, which is the brain's ability to form and strengthen neural connections in regions responsible for mood regulation.

AtaiBeckley's therapies are designed to restore synaptic connectivity by promoting the growth of new neural connections, representing a fundamentally different approach from conventional antidepressants, which primarily act by modulating neurotransmitter levels.

The company's two lead psychedelic-derived candidates, BPL-003 and VLS-01, are both designed as short-acting therapies that complete the entire treatment session in approximately two hours – a significant reduction compared with many other psychedelic therapies, which can require six to 12 hours.

Crucially, BPL-003 has been granted Breakthrough Therapy Designation by the US Food and Drug Administration, with Phase 3 activities now being initiated. 

"Across our portfolio, we're seeking to demonstrate that psychiatric illness is treatable at its biological root, not just its symptoms," says Srinivas Rao, Co-Founder and CEO of AtaiBeckley.

"Lilly's expertise and reach are expected to accelerate that work for people whose conditions have not responded to existing treatments." 

Growing industry interest in psychedelic therapies

Eli Lilly's acquisition of AtaiBeckley marks the latest entry by a major pharmaceutical company into the psychedelic therapeutics space. 

Much of this investment activity was catalysed in April when US President Donald Trump signed an executive order directing US regulators to expedite reviews of psychedelic treatments and increased funding for this emerging therapeutic field.

Johnson & Johnson has already launched a ketamine-derived nasal spray designed to combat treatment-resistant depression called Spravato.

Last year, AbbVie purchased an experimental psychedelic depression drug from neuroscience biotechnology firm Gilgamesh Pharmaceuticals for US$1.2bn.

Analysts estimate the psychedelics industry could reach US$12bn in revenue by 2034.

Eli Lilly’s diversifying pipeline

Although Eli Lilly is best known for developing and marketing the weight-loss drug Mounjaro, which is now the world's best-selling medicine, the company has pursued a series of major acquisitions across multiple therapeutic areas in 2026.

Alongside its acquisition of AtaiBeckley, Eli Lilly has agreed to a US$7.8bn deal for sleep disorder specialist Centessa and a US$7bn takeover of gene therapy oncology company Kelonia Therapeutics.