Eli Lilly’s $2.8 Billion Bet on Atai Beckley Faces a Legal Hurdle Over Fair Price

Shareholder law firm probes Eli Lilly's $6.75/share bid for Atai Beckley, citing analyst targets up to $25 and questioning fairness of the $2.8B deal.

The proposed acquisition of Atai Beckley by pharmaceutical giant Eli Lilly has drawn scrutiny from a shareholder law firm, injecting uncertainty into a deal that was already navigating regulatory approvals. Wohl & Fruchter LLP, based in Monsey, New York, has launched an investigation into whether the offer price adequately compensates investors, citing a significant gap between the bid and the price targets that analysts had assigned to the stock before the transaction was announced.

Eli Lilly’s bid, unveiled in mid-July, values Atai Beckley at $6.75 per share in cash, supplemented by a contingent value right (CVR) worth up to $2.50. The total consideration, including potential milestone payments of as much as $1 billion, amounts to roughly $2.8 billion. But the cash component alone falls well short of the valuations that several Wall Street firms had placed on the biotech company. H.C. Wainwright maintained a “Strong Buy” rating and a $25 price target even after the deal’s announcement. Other analysts were more conservative but still far above the offer: Canaccord had a $17 target, Oppenheimer and Guggenheim each stood at $16, and Berenberg’s more cautious estimate was $14. Even the lowest of those figures is more than double the cash portion of Lilly’s bid.

That discrepancy has fueled complaints that Atai Beckley’s management sold the company too cheaply, and it forms the basis of Wohl & Fruchter’s fairness review. The CVR adds another layer of complexity for shareholders. The potential extra payout is contingent on a series of milestones: up to $1 if a Phase 3 trial for the lead candidate begins within four years, an additional $0.50 upon approval of BPL-003 or a rescheduling by the U.S. Drug Enforcement Administration within five years, and a further $1 if a second candidate, VLS-01, wins approval within seven years. None of these payments are guaranteed, and their timing depends on clinical and regulatory outcomes beyond investors’ control.

Atai Beckley itself was formed only this year through the merger of Atai, founded in 2017, and Beckley Psytech. The company’s pipeline centers on BPL-003, a 5-MeO-DMT-based nasal spray that has received Breakthrough Therapy Designation from the U.S. Food and Drug Administration for treatment-resistant depression. That designation, along with a broader industry shift toward psychedelic therapies, made Atai Beckley an attractive target. The deal follows a similar move by AbbVie, which recently agreed to acquire Gilgamesh Pharmaceuticals for up to $1.2 billion, underscoring Big Pharma’s growing appetite for psychoactive compounds as alternatives to conventional antidepressants.

Christian Angermayer, who holds roughly 15% of Atai Beckley through his investment vehicle Apeiron, stands to collect about $360 million from the sale. BlackRock owns a 6.8% stake. The offer price of $6.75 is notably below the $15 per share at which the company went public in 2021, a reminder of how far the stock has fallen from its earlier highs.

On the regulatory front, Germany’s Federal Cartel Office has opened a merger control proceeding for the acquisition, with the filing dated July 23. The authority has identified biotechnology, psychedelic therapies, and migraine medications as the relevant product markets. Completion of the transaction is expected in the third quarter of 2026, pending shareholder approval and antitrust clearance.

The stock’s trading pattern reflects the peculiar dynamics of a takeover situation. Atai Beckley shares currently change hands at around €6.25, down 0.79% on the day but up roughly 32% over the past 30 days — a surge driven entirely by the acquisition news. The 52-week high of €7.85 was set on the very day the deal was announced, and the current price sits about 20% below that peak. The gap between the stock and its recent high suggests that the market is assigning a modest probability to the possibility that Wohl & Fruchter’s review — or shareholder pressure — could lead to a better offer. The Relative Strength Index stands at 74.3, signaling an overbought condition and indicating that much of the takeover premium has already been priced in.

For investors who held the stock before the deal was announced, the calculus is straightforward but uncertain: either the legal challenge yields a higher payout, or the transaction proceeds at the current terms. Until the regulatory and legal processes play out, Atai Beckley shares remain a bet on the outcome of a fairness dispute rather than on the company’s underlying business prospects.