Eli Lilly Just Made a Huge Bet on Psychedelics for Mental Health
Psychedelics are having a major moment — not just in the wellness world, but in mental health research and treatment. As public interest grows and the federal government takes a closer look, Big Pharma is paying attention — and putting serious money behind it.
Eli Lilly announced its blockbuster deal to acquire AtaiBeckley, a company that manufactures psychedelic drugs to treat mental health conditions, for $2.8 billion.
“From Atai’s founding, our mission has been to bring transformative mental health treatments to the patients who need them most,” Christian Angermayer, AtaiBeckley’s founder and board chairman, says in a news release. “Joining Lilly gives this pipeline, and the patients waiting for it, the benefit of the resources and scale Lilly has to potentially advance therapies faster than we could alone.”
The deal centers on BPL-003 (mebufotenin benzoate), an intranasal spray made from a synthetic version of 5-MeO-DMT (5-methoxy-N,N-dimethyltryptamine), a psychedelic compound that’s found naturally in plants and the Sonoran Desert Toad’s venom.
Unlike the raw toad venom, BPL-003 is being developed as a precisely-dosed, fast-acting treatment designed to produce a brief psychedelic experience without the prolonged hallucinogenic effects associated with some other psychedelics.
It’s being developed for treatment resistant depression — depression that doesn’t get better after someone tries at least two different antidepressants — which affects about 30% of people who have depression. BPL-003 showed promising results in its second phase clinical trial data as a fast-acting, single-dose treatment.
Considering women are about twice as likely as men to be diagnosed with depression, major investments like these could have a big impact on women’s mental health if they’re approved.
The U.S. Food & Drug Administration (FDA) gave the drug a Breakthrough Therapy designation last year. This isn’t an approval — it still has to meet all its clinical endpoints in future trials — but it means active guidance and support toward eventual approval.
Why Now?
It’s happening at a moment when both the American public and the federal government have higher approval and interest in using psychedelics as therapies. President Donald Trump signed an executive order this spring to accelerate regulatory review and funding for various psychedelic drugs to treat serious mental health conditions.
Concern and stigma around psychedelics are still common, according to the 2025 UC Berkeley Psychedelics Survey. But growing majorities perceive psychedelics as potentially useful for end-of-life-distress, PTSD and depression — especially when other treatments haven’t worked.
Support for more policies that make researching psychedelics easier jumped from 49% in 2023 to 63% in 2025. Voters are also more open to these drugs being used in regulated medical and therapeutic settings — support for that grew from 41% to 46% between 2023 and 2025.
But that support doesn’t apply to all uses. At the same time, support for decriminalizing psychedelics for personal use decreased.
“There are shifting signals right now where we’re seeing support in some areas increase and not in others,” explains Andrea Venezia, a social scientist who is executive director of the UC Berkeley Center for the Science of Psychedelics (BCSP).
Why This Deal Matters
Eli Lilly’s deal may be the largest yet in the space, but it’s not the first. The trend kicked off in 2019 when Johnson & Johnson released Spravato, a depression drug derived from ketamine. While not a traditional psychedelic, the embrace of a ketamine derivative reveals the extent to which pharma companies are starting to explore non-traditional treatments.
Since then, other companies besides Eli Lilly have opened their wallets for psychedelics.
Otsuka, the major Japanese drug company, recently paid big bucks for two biotech firms developing psychedelics to treat neurological and psychiatric issues: $59 million for Mindset Pharma and its suite of pre-clinical molecules — one of which is derived from psilocybin — in 2023 and $700 million for Transcend Therapeutics in June. In the latter deal, the company snagged TSND-201, a promising PTSD treatment made from an analog of MDMA.
AbbVie also just agreed to pay up to $1.2 billion to buy Bretisilocin from Gilgamesh Pharmaceuticals. It’s a depression treatment derived from DMT, the hallucinogen found in Ayahuasca.
“Deals range depending on the type of therapeutic, but for psychedelics this is the biggest one,” Kacy Fleming, CEO of The Fuchsia Tent, tells Flow Space. She spent 22 years in biopharma operations and marketing and says the significance of the Eli Lilly deal goes beyond its size — it signals growing industry momentum around psychedelics. “We now have three of the biggest manufacturers in pharmaceuticals looking at this space, which tells you that there’s demand and a desire to create these agents and bring them to market faster, in a safe way.”
Regardless of interest, a psychedelic gold rush may not be all systems go just yet. Smaller firms may be more open to developing psychedelics. But major companies want safe bets, so they’re looking for drugs backed by solid clinical data. That can be tough to find.
“Spravato proved a clinic-administered treatment can be commercially viable and large companies have thin late-stage psychiatry pipelines,” Edny Inui, PhD, neuroscientist and partner at Palo Santo, a venture capital fund that invests in companies making psychedelics and other emerging mental health therapies (including the three mentioned above), tells Flow Space. “But pharma acquirers buy de-risked assets and there are only a few programs left that have reached that level of evidence.”
It’s also notoriously tough to get drugs that impact the central nervous system (CNS) approved by regulatory agencies because they’re especially complex to develop.
Inui says Eli Lilly’s big buy also matters for this reason — it shows the company is confident that a psychedelic compound “can clear the same high bar as any other CNS drug and is willing to fund the late-stage clinical development necessary for the rigorous proof of efficacy and safety necessary for their approval.”
What Comes Next
What happens next depends on how these drugs perform and whether this growing interest holds. Public and political interests and opinions can shift quickly, which Fleming says could impact whether other companies make future ventures into psychedelics.
For BPL-003, the drug Eli Lilly bought, the next step is the Phase III clinical trial. It’s a check to see if the results hold in larger, longer trials. Those results are expected in 2029. Fleming says success here means repeatable results, low side effects and a determination that taking the drug outweighs risks.
But many questions still remain about access, insurance coverage and cost structure. These drugs are meant to be used under doctor guidance in a supervised treatment environment, so questions about how people will find that — and how they’ll pay for it — matter.
It’ll be important to get the details right as these drugs move through development. But ultimately having more options to lend relief to the millions of people dealing with mental health conditions — including many midlife women — is exciting.
