ATAI Life Sciences is a clinical-stage biopharmaceutical company focusing on the development of therapeutic solutions for various mental health disorders including treatment-resistant depression (TRD).
ATAI has a plethora of pipelines including COMP360 psilocybin for TRD in Phase 2 clinical trial, PCN-101, a subcutaneous formulation of R-ketamine for TRD, GRX-917, a deuterated version of Etifoxine, DMX-1002 ibogaine and KUR-101, a deuterated mitragynine for opioid use disorder.
Although the R-ketamine pipeline PCN-101 has failed to show therapeutic benefit in phase II clinical trials, the psilocybin pipeline looks like a potential win in TRD.
Psilocybin is a naturally-occurring psychedelic compound, being investigated for the treatment of treatment-resistant depression (TRD), which is unlikely treated by existing anti-depressant drugs. Psilocybin treats TRD effectively without significant side effects. Accumulating evidence suggests that psilocybin with accompanying psychological support can be used safely to treat a range of psychiatric conditions, including end-of-life anxiety and depression, alcohol and tobacco addiction, obsessive-compulsive disorder, and most recently, treatment-resistant major depression.
Clinical trials have shown – one or two doses of psilocybin rapidly relieved depression symptoms and the treatment benefits lasted over 4 weeks to 12 months. These results are also from a well-powered rigorous, multi-centric phase II clinical trial involving depressive patients, who received one or three doses of psilocybin.
A single oral dose of 25mg of psilocybin with psychological support for 5-8 during the hallucinogenic side effects (if any) could significantly decrease the depression severity with acceptable side effects. The anti-depressant benefits are comparable to Escitalopram (a well-established anti-depressant drug)
Another well-controlled clinical study that involved 27 depression patients who were assigned to receive two doses of psilocybin and followed up for 8 weeks to 12 months showed a significant reduction in depression symptoms (before Vs after treatment) and treatment benefits were sustained/durable over 12 months (with just two doses). None of the existing anti-depressant drugs can achieve such a treatment success without any risk of side effects.
Based on these findings, the investors could understand – sustained treatment response over months could be something like a ‘functional cure’ than remission (staying without symptoms).
Recent Events:
6th January 2023 – atai Life Sciences announced results from Phase 2a Trial of PCN-101 (R-ketamine) for treatment-resistant depression.
23rd December 2022 – Atai Life Sciences announced results from the Kures Therapeutics Phase 1 Trial of KUR-101
19th December 2022 – Atai Life Sciences initiated phase 2b proof-of-concept trial of RL-007 for cognitive impairment associated with schizophrenia
November 29th, 2022 – Atai Life Sciences strengthens its leadership team with the appointment of Dr. Sahil V. Kirpekar as Chief business officer
November 10th, 2022 – Atai Life Sciences reported the third quarter 2022 financial results and business update.
October 13th, 2022 – IntelGenx’s collaboration with Atai Life Sciences culminates in the initiation of the first-in-human clinical study of an oral thin film psychedelic drug candidate.
Addressable market
Global treatment-resistant depression is the highest unmet need in mental health disorders – depressive disorder particularly treatment-resistant depression.
Valued at $1.52 billion in 2021 and expected to grow by $1.55 billion to $2.83 billion by 2029.
Current finances
ATAI is heavily relying on equity and debt financing for operational funds and the pipelines are in the early stages of development, raising financial red flags. ATAI likely requires substantial additional funding for the ongoing research and development until commercialization, if approved.
As of mid-August 2022, the company positioned itself well to secure a non-dilutive loan of up to USD175M, and thus generated USD 312M as cash to run operations. The cash burn trajectory over a year could be USD73M and a cash runway of approximately 3.8 years from now.
With cash deficits and the non-availability of liquidity, the risk of shareholder dilution is high.
Insider activity
Competitors:
Tryp Therapeutics is conducting Phase II clinical trials to assess the efficacy and safety of psilocybin and psilocybin-based drug products for chronic pain and eating disorders. The lead asset TRP-0082 is now in Phase 2a clinical trial for the management of binge eating disorder.
Cybin is developing the lead asset CYB003 (Deuterated psilocybin analogue) in phase I/II study for the management of the major depressive disorder. The study is expected to be completed by mid-2023.
Summary
The scientific evidence supporting the use of naturally-derived psilocybin as an anti-depressant is well-established through various clinical studies. The chances of COMP360’s psilocybin product successfully completing clinical trials and receiving regulatory approval are high. A single dose or a small number of doses of psilocybin has been shown to effectively alleviate symptoms of treatment-resistant depression (TRD) and the benefits can last for up to a year, which is not typically seen with current anti-depressant medications. A key upcoming event for ATAI will be the start of the Phase III psilocybin study, which is expected to begin within six months.