ARK Dumps Atai Beckley as Eli Lilly’s Takeover Faces a Regulatory Checkpoint

ARK Invest rotates $1.1M Atai Beckley shares into Compass Pathways, betting on psilocybin therapy as Eli Lilly's $3.8B takeover faces regulatory review.

Cathie Wood’s ARK Investment Management has offloaded 1.1 million shares of Atai Beckley, redirecting capital into rival Compass Pathways with a 400,000-share purchase. The move, reported by The Motley Fool, signals that even prominent growth investors see better value elsewhere in the psychedelics space — even as Eli Lilly’s $2.8 billion takeover of Atai Beckley grinds through regulatory review.

The transaction, announced July 16, carries a total potential value of up to $3.8 billion when including milestone payments. But the deal is no longer just a headline: Germany’s Federal Cartel Office has registered the merger under case number B3-85/26, a standard but critical step for a biotech acquisition of this size. International competition authorities are now scrutinizing the fine print.

At the heart of the deal lies BPL-003, a synthetic intranasal 5-MeO-DMT candidate in Phase 3 development for treatment-resistant depression. Eli Lilly is effectively buying a pipeline of fast-acting neuroplastogens, an area where Atai Beckley has carved out a clinical leadership position. A second asset, VLS-01 — a buccal DMT film — adds further optionality.

ARK’s rotation out of Atai Beckley and into Compass Pathways reflects a bet on a different trajectory. Compass is advancing COMP360, a psilocybin therapy that recently hit its primary endpoint in Phase 3 studies for treatment-resistant depression. A U.S. regulatory filing is expected in the fourth quarter of 2026. Wells Fargo has initiated coverage on Compass with an Equal-Weight rating and a $13 price target; the stock recently traded at $10.85.

The timing of ARK’s exit coincides with a broader regulatory tailwind. In April, a presidential directive ordered the FDA to accelerate the review of psychedelic compounds, intensifying competition among developers racing toward faster approvals.

Atai Beckley’s stock closed Tuesday at €6.25, down 1.57% on the day, and slipped another 0.80% to €6.20 in Wednesday trading. That’s roughly 21% below the 52-week high of €7.85, hit on the very day Eli Lilly unveiled its offer. Despite the pullback, the shares remain nearly 40% above their 50-day moving average — a testament to how dramatically the takeover news reset the valuation floor.

The math behind the current price is instructive. Eli Lilly is offering $6.75 per share in cash, plus up to $2.50 in contingent value rights (CVRs) tied to clinical and regulatory milestones. At €6.25, the stock is pricing in little more than the guaranteed cash component, treating the CVRs as a speculative kicker. Analysts peg the remaining upside at roughly 33%, but that depends entirely on BPL-003 and VLS-01 hitting their development targets.

Technical indicators flash caution. The relative strength index sits at 72.6, signaling overbought conditions, while the 30-day annualized volatility hovers around 120%. That combination points to continued choppiness around the €6.25 level as the market digests a long timeline to deal closure, expected later this year.

For investors still holding Atai Beckley shares, the central question is no longer whether the deal gets done — it’s whether the pipeline delivers enough to make the CVRs worth more than a rounding error. ARK’s pivot to Compass suggests at least one sophisticated player has already made its bet.