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Psychedelic drug developers atai Life Sciences and Beckley Psytech are set to merge in a transaction that would value Beckley at around $370M. The combined entity, which would be named atai Beckley, would have a leadership team and Board reflective of both companies.
Importantly, the transaction is dependent on the outcome of Beckley’s heavily-anticipated Phase 2b study, which sees its intranasal 5-MeO-DMT candidate (BPL-003) tested for treatment-resistant depression (TRD). Should predefined criteria not be met in that readout, atai reserves the right to walk away from the deal.
Aside from the merger, atai is also about to close on a $30M private placement by existing investors in each company.
Psychedelic Alpha spoke with sources close to the companies to learn more about the proposed merger and financing.
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Reporting by Josh Hardman
Last January, NASDAQ-listed psychedelic drug developer atai Life Sciences announced a strategic investment in its British privately held peer, Beckley Psytech (atai Life Sciences Makes $50m Investment in Beckley Psytech).
That agreement saw atai inject $50M into the company, which gained it a stake of around one-third of Beckly and three of its nine board seats. It also gave atai a time-limited right of first refusal on any future sale of the company or its assets, as well as other perks.
Since that deal, some—including us at Psychedelic Alpha—have speculated that atai was looking to buy the whole company. Speaking to Psychedelic Alpha in April, atai co-founder and chairman Angermayer kept quiet on that question, instead saying that we should ‘wait for the data’ from the Phase 2b study.
It now appears that he and other atai execs were negotiating an option to do just that, pending the Phase 2b data, which is still expected ‘mid-2025’.
Terms of the Deal: atai’s All-Share Offer Values Beckley at $370M
The proposed merger takes the form of an all-share transaction that sees around 105 million new atai shares issued, in consideration of the approximately two-thirds of Beckley Psytech not currently held by atai via the earlier investment. According to napkin math, that values Beckley at around $370M.
That seems to be a fairly reasonable valuation, which might appear modest when compared to GH Research’s. The publicly-traded 5-MeO-DMT drug developer, which has completed a positive Phase 2b study of its inhaled candidate (GH001) in the same indication as Beckley, TRD, has a market cap that is hovering around the $750M mark. In its most recent financials, GH reported a cash position of around $315, as of March 31st. Using those numbers, napkin math implies an enterprise value of around $435M.
Given GH and Beckley are at similar points of the drug development process, the implied valuation of the latter appears reasonable. But when we take into consideration the fact that the structure of the transaction allows atai to walk away if the Phase 2b data doesn’t meet certain predefined criteria, the deal—which is effectively an option—seems quite peachy indeed.
What’s more, Beckley is expected to spin-out its Eleusis assets (chiefly, ELE-101, its IV psilocin candidate), and Psychedelic Alpha understands that the combined atai Beckley would retain around a third of that spin-out.
Shares issued in the transaction would be subject to a twelve-month lockup, with a twelfth of the shares released every month following the closing of the transaction. Angermayer’s family office, Apeiron Investment Group, voluntarily entered into a similar lockup covering all of his atai shares.
“The strategic combination marks a transformational moment, solidifying us as a leader in rapid-acting and accessible psychedelic treatments for mental health conditions with a pipeline of potential first-in-class and best-in-class assets,” atai CEO and co-founder Srini Rao said in a statement.
$30M Financing: Concurrent, Not Contingent
atai is also raising $30M via a private placement with Ferring Ventures and Adage Capital Partners, with that cash injection not contingent on the closing of the Beckley deal. It’s expected to close tomorrow.
According to sources close to the company, Ferring will inject an additional $20M of fresh capital, with the remaining $10M from Adage.
Ferring Ventures is the investment arm of Ferring Pharmaceuticals, a Swiss biopharma company that brought in more than €2 billion in 2024. The pharma company specialises in urology, reproductive health, and gastroenterology, among other areas. Its modest venture arm, however, has made bets beyond those specialisms, including in vaccines and inner ear disorders. We understand that Ferring already had a stake in atai, which it is now increasing.
Adage, meanwhile, participated in Beckley’s $80M Series B financing in summer 2021. The investment firm is now placing a modest bet on atai, regardless of whether the Beckley merger closes.
A source close to the company hopes these investors, including founder and Chairman Christian Angermayer, will shore up the company’s funding efforts. Indeed, in April Angermayer told us that he “would always support atai, because it’s my baby”, but expressed optimism that he wouldn’t need to.
A Fast-Acting Face-Off: GH Research and Beckley Neck-and-Neck
As alluded to above, and much-discussed in our previous coverage, Beckley and GH Research are close competitors, with their race to a potential approval of 5-MeO-DMT for TRD currently too close to call.
Beckley, and thus atai, are hoping that their intranasal delivery mechanism might give it an edge over GH, which is instead pursuing an inhaled formulation of the drug (GH001).
That inhaled delivery mechanism has already caused headaches for GH, which was slapped with an IND hold by FDA in September 2023 after trying to launch a study in the U.S. According to the company, FDA requested additional inhalation toxicity studies as well as further details on GH’s proprietary inhalation device. (The company has been using a third-party device, a Volcano vaporiser, in its European studies.)
Twenty months later, the Irish company has still not resolved that hold, which is a blocker to its commencement of studies in the country. In its most recent business update, shared a few weeks ago, it said that its full response to the IND hold is “on track for submission in mid-2025”. FDA aims to respond to such submissions within thirty days.
That delay only further narrows any gap between the two drug developers as they hope to launch pivotal programs with U.S. sites in the coming quarters.
Beckley has already dosed patients in the U.S., with its Phase 2b study (NCT05870540) including nearly twenty sites across more than a dozen states, as well as sites in Germany, Poland, Spain, and the UK. The study had a target enrolment of 200 TRD patients.
The study administered a single low, medium, or high dose of the drug and followed patients for 8 weeks. The primary endpoint is the difference in change from baseline MADRS between the high and low dose arms at 4 weeks.
GH’s Phase 2b study, meanwhile, enrolled 81 TRD patients to receive the drug or placebo. The primary endpoint there was the placebo-adjusted MADRS reduction from baseline on day 8.
While the race to approval confers significant prizes, such as market exclusivity, there is a major complicating factor: patents. While Angermayer et al. have boasted of atai’s, and Beckley’s, IP position, we have repeatedly covered the complex patent positions of the pair of 5-MeO-DMT drug developers, which illuminate the interplay between various types of exclusivity. (See, for example, A Mebufotenin Melee: Exploring IP and Exclusivity in 5-MeO-DMT Drug Development Across GH Research and Beckley Psytech.)
If litigation is required, atai’s cash on hand might provide a better war chest for Beckley than going it alone, at least.
atai Moves Beyond the Hub-and-Spoke
Having started with more of a hub and spoke model when it was founded in 2018 that saw it take substantial, but not full ownership, stakes in psychedelic and non-psychedelic drug development programs, atai has since worked to bring various psychedelics candidates fully in-house.
Psilocybin, however, is the exception, with atai selling down substantial chunks of its holdings in Comapass Pathways in recent quarters.
That likely reflects a conviction around the ability to achieve similar safety and efficacy with potentially more commercially viable candidates, such as short-acting drugs like 5-MeO-DMT, or even IV psilocin. Indeed, the company has repeatedly emphasised BPL-003’s potential to slot into the commercial and clinical infrastructure that Spravato has carved out. That might also be the reason why its ibogaine candidate, DMX-1002, is the lesser-discussed one in atai’s portfolio.
Indeed, in announcing the potential merger, Beckley co-founder and CEO Cosmo Feilding-Mellen emphasised this point again. “Clinical data has shown the rapid and durable effects of our compounds,”, he said, “as well as their potential to fit within the existing treatment paradigm established by SPRAVATO”.
Pα: This potential merger between atai and Beckley is significant news, even if some had speculated that it could happen for some time. It also appears to be a canny deal for atai, which retains the right to back out should Beckley’s heavily-anticipated Phase 2b study not meet its expectations. Through that structure, atai gets an option-like position with limited downside risk.
Still, even if Beckley’s Phase 2b results impress, the path forward for atai Beckley is far from simple. Despite 5-MeO-DMT’s commercial attractiveness and relative logistical convenience on paper, its intense subjective effects mean that regulators and practitioners alike will expect robust data on both acute and long-term effects and outcomes.
What’s more, the company is not without competitors, chiefly GH Research. With backing from mainstream biopharma investors RA Capital, its own IP portfolio, and a very similar drug development timeline to Beckley, the race to approval and commercial success is far too close to call.
This news also comes soon after Lady Amanda Feilding, who co-founded Beckley Psytech with her son Cosmo Feilding-Mellen, passed away aged 82. Feilding, who has been a lifelong advocate and pioneering funder of psychedelic research, primarily through her nonprofit, the Beckley Foundation, left much of the commercial side of the family’s work up to her sons, Cosmo and Rock. It is fitting, then, that the Beckley name will be retained through the proposed merger, though the question of whether the Beckley spirit will endure in this next chapter remains to be seen. ∎
