Psilocybin Therapeutics

Berenberg analyst Kerry Holford upgraded Eli Lilly to buy and raised her price target to $1,400, implying almost 25% upside, backing the drugmaker to extend its lead in the fast-growing obesity market. Holford said the firm's latest return-on-R&D-investment analysis confirms Lilly's track record of best-in-class returns and that she sees upside to its 2026 guidance. She argued the external pipeline investment fueled by Lilly's obesity success remains underestimated, noting the company has committed about $60 billion across more than 25 deals this year. Holford said Zepbound and Mounjaro are established leaders in obesity and diabetes, and expects the imminent diabetes approval of oral GLP-1 drug Foundayo to unlock significant demand, aided by the Medicare Bridge program. She also cited recent acquisitions that diversify the pipeline, including the roughly $4 billion purchase of AtaiBeckley, which adds psychedelic assets targeting mental health, and the $8 billion acquisition of Centessa, which takes Lilly into sleep-wake disorders such as narcolepsy. Holford said Lilly's premium valuation is justified: the stock trades at 23.4 times 2027 earnings versus a global peer average of 13.6 times, but she argued its superior growth, pipeline breadth and research productivity warrant a more significant premium.

Strata Mental Health Solutions announced it has been awarded one of the five U.S. healthcare provider training grants from Compass Pathways to develop U.S. health care provider training programs for COMP360, Compass' investigational psilocybin treatment, if approved. Compass has reported positive results from two Phase 3 trials of COMP360, with its NDA submission expected to be complete in the fourth quarter of 2026 under a rolling submission and FDA review pathway, and commercial launch expected in the first half of 2027. Under the grant, Strata will develop provider training programs for the multi-hour, multidisciplinary treatment model used in clinical development, taught by clinical faculty with direct experience in the COMP360 clinical development program. The grant-funded training is one component of Strata's broader implementation platform, which also includes certification, site-readiness consultation built to exceed anticipated REMS requirements, and ongoing case-based supervision and clinic support. Strata's founders previously worked with Compass on the development of the provider training program for the COMP360 clinical trials.

Eli Lilly and Company has completed its acquisition of AtaiBeckley Inc., a clinical-stage biopharmaceutical company developing rapid-acting neuroplastogens for mental health conditions. AtaiBeckley's lead investigational program, BPL-003, targets treatment-resistant depression. The transaction was approved by AtaiBeckley shareholders at a special meeting held prior to closing. Carole Ho, Lilly executive vice president and president of Lilly Neuroscience, said AtaiBeckley's neuroplastogens have the potential to open a new paradigm of treatment with rapid-acting therapeutics designed to move away from chronic dosing. Lilly said it is committed to advancing the pipeline for patients who need more options.

Rhelion Life Sciences Corp. announced that its wholly owned subsidiary, Filament Health Corp., has completed a further international delivery of its patented, naturally derived psilocybin drug candidate PEX010 to the Central Institute of Mental Health in Mannheim, Germany, supporting the first compassionate use program for psilocybin in the European Union. The program, authorized by the German Federal Institute for Drugs and Medical Devices under Germany's Ordinance on Medicinal Products for Compassionate Use, has been treating patients with PEX010 since April 2026 at two sites, CIMH in Mannheim and the OVID Clinic in Berlin. Rhelion believes this delivery demonstrates its ability to manufacture, release, and supply pharmaceutical-grade botanical psilocybin across international regulatory jurisdictions as new legal access pathways emerge. The company intends to leverage Filament's existing GMP manufacturing infrastructure, regulatory experience, intellectual property, and international supply capabilities to pursue future commercial supply opportunities as regulated psilocybin markets and patient-access programs develop globally.

Compass Pathways is working with the U.S. Department of Veterans Affairs on a multi-site randomized controlled trial evaluating COMP360 psilocybin for veterans with treatment-resistant depression, including those with concurrent PTSD. The trial, called PIVOT, will enroll veterans at five VA sites led by the Birmingham VA Health Care System and compare two doses of COMP360 with an optional second open-label administration. Compass will donate the synthetic psilocybin formulation and provide training materials and guidance, while VA investigators will train healthcare providers. The primary endpoint is depression severity measured by the MADRS scale, with secondary outcomes including PTSD symptoms and tolerability. Compass Pathways CEO Kabir Nath called the study groundbreaking and expressed gratitude for VA resources to explore psilocybin's potential in transforming care for veterans.

Rose Hill Life Sciences and Control Z have signed a letter of intent to advance a clinically structured psilocybin-assisted therapy program for post-traumatic stress disorder through Rose Hill’s Psychedelic Therapeutic Intervention program. The collaboration, which awaits state approval and licensing, aims to deliver a fully regulated, medically supervised psychedelic therapy program in Massachusetts, combining Rose Hill’s scientific and regulatory infrastructure with Control Z’s bio-psycho-social care model. PTSD affects an estimated 13 million Americans annually, and the partnership targets patients who have not responded to conventional treatments, including veterans and first responders. Rose Hill’s PTI program for PTSD is one of four active clinical-stage development efforts, alongside a lead program with Johns Hopkins University investigating psilocybin for post-stroke motor recovery. Psilocybin remains an investigational compound not approved by the FDA for any indication outside regulated research.

RTTNews highlights five biotech and medical device stocks that generated returns of 86% to 327% since being featured on its website. Arrowhead Pharmaceuticals surged 222% to a 52-week high of $95.49 following FDA approval of its lead drug Redemplo and positive clinical data. Compass Pathways climbed 327% to a 3.5-year high of $15.40 after reporting positive Phase 3 results for its psilocybin therapy COMP360 in treatment-resistant depression. CG Oncology rose 148% to an all-time high of $77.00 on the back of encouraging data for its bladder cancer candidate Cretostimogene. Alpha Tau Medical gained 182% to a 52-week high of $14.11 driven by regulatory progress and promising clinical results for its Alpha DaRT cancer therapy. Electromed advanced 86% to a 52-week high of $47.40 supported by strong quarterly revenue and profit growth.

Eli Lilly has entered into a definitive agreement to acquire clinical-stage biotech AtaiBeckley for an initial upfront payment of $2.8 billion. Under the deal, Lilly will pay AtaiBeckley shareholders $6.75 per share in cash upon closing, with the potential for an additional $2.50 per share through contingent value rights if specified development and regulatory milestones for the BPL-003 and VLS-01 programs are achieved, which could increase the total deal value by up to $1.0 billion. The acquisition is driven by AtaiBeckley's pipeline of novel psychedelic therapies for mental health disorders, including lead asset BPL-003, an intranasal formulation of mebufotenin benzoate in Phase III for treatment-resistant depression that has received FDA Breakthrough Therapy designation. The transaction, expected to close in the third quarter of 2026, is part of Lilly's broader 2026 acquisition spree totaling more than $20 billion in biotech deals to diversify beyond GLP-1 therapies.

Eli Lilly and Company has agreed to acquire AtaiBeckley in a cash and contingent value rights deal valued at up to $3.8 billion, putting fresh focus on the stock's valuation. AtaiBeckley's share price surged 33.4% on the announcement and is up 84.75% year to date, with a one-year total shareholder return of 156.27% contrasting with a five-year total shareholder return that remains down 58.57%. The stock last closed at $7.15, above Eli Lilly's $6.75 per share cash offer, and its price-to-book multiple stands at 13.2x, more than five times the US pharmaceuticals industry average of 2.4x and more than double the peer group average of 5.5x. The company recorded a loss of $663.4 million on only $3.5 million of reported revenue and is forecast to remain unprofitable over the next three years, suggesting the market is pricing in substantial future potential for its mental health pipeline and clinical-stage assets.

Several stocks made big moves in midday trading following earnings reports and analyst actions. ManpowerGroup surged 33% after calling for third-quarter revenue to rise 2% to 6%, above the FactSet consensus of 1.7%, and posting adjusted earnings of 99 cents per share on revenue of $4.9 billion, topping estimates. Abbott Laboratories jumped almost 11% as it raised its full-year adjusted earnings guidance to a range of $5.45 to $5.60 per share, above the FactSet consensus of $5.47. UnitedHealth rose 4% after reporting adjusted earnings of $6.38 per share on revenue of $112.03 billion, beating LSEG estimates, and hiked its full-year outlook. Taiwan Semiconductor Manufacturing shed 2% despite beating second-quarter earnings estimates, as it raised full-year capital expenditures to between $60 billion and $64 billion and announced an additional $100 billion investment in Arizona. AtaiBeckley jumped 33% after Eli Lilly agreed to buy the psychedelic drugmaker for $2.8 billion, or $6.75 per share in cash, with potential milestone payments of up to $2.50 per share. GE Aerospace dropped 4% even after beating second-quarter earnings and revenue estimates and raising full-year guidance. United Airlines fell more than 1% as softer-than-expected third-quarter guidance of $2.50 to $3.50 per share, below the FactSet estimate of $3.53, overshadowed an earnings beat. J.B. Hunt Transport Services jumped almost 7% after reporting earnings of $1.91 per share on revenue of $3.5 billion, exceeding FactSet estimates. Cintas gained 6.5% following a Bank of America upgrade to buy, while Cinemark and Imax fell about 4% and 2% respectively after Wells Fargo downgraded both to equal weight. AST SpaceMobile tumbled more than 16% on plans to offer $1 billion of convertible senior notes due 2034.

Shares of psychedelic drug developers are surging premarket after Eli Lilly announced a definitive agreement to acquire AtaiBeckley Inc., validating the sector. AtaiBeckley shares rose 30.8%, Compass Pathways gained 7.4%, and GH Research jumped 18.9%. Lilly will pay $6.75 per share in cash, plus up to $2.50 per share via a Contingent Value Right tied to milestones for lead programs BPL-003 and VLS-01, implying an upfront equity value of about $2.8 billion and additional potential value of roughly $1.0 billion. The deal is expected to close in the third quarter. RBC Capital said GH Research represents the most direct read-through given its lead asset GH001 is nearly identical to AtaiBeckley's BPL-003, both based on 5-MeO-DMT for treatment-resistant depression, and maintained an Outperform rating with a $40 price target.

Oppenheimer reaffirmed its Outperform rating and $20 price target on COMPASS Pathways after the company reported 26-week results from Part B of its Phase 3 COMP006 study of COMP360 for treatment-resistant depression. The data showed sustained clinical benefits, with 39% of patients on the 25 mg dose achieving clinically meaningful improvement by Week 6 and benefits generally maintained through Week 26, along with a favorable safety profile. Oppenheimer stated the findings strengthen the regulatory outlook ahead of a planned NDA submission in the fourth quarter and reinforce the potential for the first FDA approval of a classical psychedelic therapy. The firm also believes the stock's commercial opportunity is not fully reflected in its current valuation ahead of a possible first-half 2027 launch.

Compass Pathways shares rose about 8% in early premarket trading after the company announced additional 26-week data from the Part B portion of its Phase 3 COMP006 trial for COMP360 in treatment-resistant depression. The results confirmed a rapid onset of action and durable clinical profile, with 39% of patients receiving two fixed 25 mg doses showing at least a 25% reduction in MADRS at Week 6, an effect maintained through at least 26 weeks. This compares to 25% of patients reaching that measure at Week 6 with a single dose in the COMP005 trial, suggesting a second dose may improve clinical benefit. No new safety events were reported, and the therapy continued to show a well-tolerated safety profile. An ongoing rolling submission for a new drug application is expected to conclude in the fourth quarter, with a potential launch in the first half of 2027 subject to FDA approval.