Good morning, and welcome to atai Life Sciences Q4 and year-end 2021 financial results and corporate update conference call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there'll be an open question and answer session. This is a live webcast via the news and events section of the company's website at www.atai.life and is being recorded. A replay of the webcast will be available on our website. Joining me today are Florian Brand, Chief Executive Officer and Co-founder, and Dr. Srinivas Rao, Chief Scientific Officer and Co-founder. The press release announcing our financial results is available on atai's website. Please take a moment to read the disclaimer about forward-looking statements in the press release.
During today's call, we'll make certain forward-looking statements that are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. While these statements represent management current expectations and projections about future results and performance, ATAI's actual results are subject to many risks and uncertainties that could cause actual results to differ materially from those expectations.
In addition to any risks highlighted in the call, these statements are subject to various risks that are described in our filings with the Securities and Exchange Commission. We caution not to place undue reliance on these forward-looking statements which speak only as of today, March 30, 2022. Except as may be required by applicable law, ATAI disclaims any obligation to update such statements, even if management's views change. I'll now share a short video from our founder and chairman, Christian Angermayer.
We are in a state of crisis, real crisis globally when it comes to mental health. Over a billion people, that's about one in seven worldwide, live with a mental health disorder. Many argue this is unfortunately just the tip of the iceberg and that the real number may be way higher for at least three main reasons. First, this 1 billion is a pre-COVID-19 figure. The pandemic has substantially worsened the global mental health situation according to leading experts. Second, mental health issues continue to be stigmatized. Not everyone who needs help is coming forward to be diagnosed and treated. Many, unfortunately, still suffer in silence. Luckily, this is gradually changing, and great work like what we are doing with our philanthropic arm, atai Impact, is on the way to reduce such stigma. As the stigma vanishes, I believe the number of diagnosis may increase meaningfully.
Third, and generally, I personally believe the world we are building with all the technological innovations around us is not good for our mental health. Constant change, misuse of social media, overstimulation, all this is totally toxic for our brain and is taking its toll on all of us. My personal belief is, unfortunately, that the number of people globally living with mental health conditions will meaningfully continue to increase in the years to come. Even those who are receiving help and treatment today aren't always getting the help they need. At ATAI, we believe too many current treatments are one size fits all, and one size does not fit all when it comes to mental health. That's why we are progressing a broad pharmacologically diverse pipeline. We are developing psychedelic and non-psychedelic compounds, as well as cutting-edge digital therapeutics that show real promise in mental health treatment.
The fact that psychedelics have the potential to massively improve various mental health issues is becoming more and more widely accepted. Yet, questions about defensibility, namely patents and potential commercialization remain. Regarding patents, we at ATAI have filed a broad range of patents across our respective portfolio of innovative psychedelics and obviously non-psychedelic therapies as disclosed in our public filings, ranging from compositions of matter to methods of treating various indications of interest to ATAI. Of course, we believe that multiple of our compounds may be eligible for data exclusivity. Don't forget, ATAI has been a pioneer in psychedelic medicine. Given our first-mover advantage, we had the time and the team and the capital to acquire and/or file new patents around those innovative psychedelic therapies we believe have the potential to be medically viable and which are consistent with our business model.
When it comes to commercialization, we are proactively working with various stakeholders to ultimately enable patients to access our innovative treatments once they are approved. We have achieved so much, and yet this is only the beginning of our incredible journey. Just as we appreciate today the groundbreaking achievements in vaccine development of Moderna and BioNTech through the COVID-19 pandemic, companies actually now considered to be household names. In the future, it is my personal ambition that atai will be recognized as the driving force in healing mental health disorders globally, and that atai actually will be synonymous with the solution for this crisis. I dare to say this with such confidence because of our unique business model.
The compounds we have historically identified and selected have had prior evidence in humans, either because they had been approved in parts of the world as medical solutions, used ritualistically or have had other anecdotal uses. I truly believe that atai is one of these rare companies where the stars are aligned. The mission, the strategy, the leadership, the execution, and the significant unmet need in mental health.
As you hopefully can tell, I couldn't be more excited about atai's future and its potential to play a vital role in solving one of humanity's biggest challenges. It's imperative to me to be in this journey for the long run, to make this world a better place, and to play a meaningful role in bringing healing and relief to the millions of people currently suffering from the mental health disorders atai is targeting. I refuse to disappoint them. With that, I'll hand over to my amazing leadership team to tell you more.
Good morning, everyone. It's a pleasure to be here today, and I'm really excited to walk you through our strategy, our achievements since January 2021, and through our upcoming R&D milestones this year and beyond. 2021 was a truly transformative year for Atai. We made important progress across our programs, expanded our diverse pipeline with multiple shots on goal, and secured approximately $410 million in financing. This allowed us to enter 2022 with $362 million in cash, putting us into a very, very strong position to work towards our strategic goal, achieving clinically meaningful and sustained behavioral change in mental health patients. To achieve this goal, we will focus on three strategic pillars. One, rapid-acting intervention. Two, ongoing digital support. Three, biomarker-driven precision mental health. Let's turn to the first pillar, rapid-acting intervention.
This pillar is really about developing our first, second, and third generation compounds in the most effective and most efficient way. We anticipate these compounds to be highly differentiated and to show rapid-acting improvements in mental health disorders. We are especially interested in compounds with strong neuroplastic properties that open a therapeutic window to initiate behavioral change in patients. To give you an example, in the context of depression, this first pillar is really about lifting a patient out of depression in a quick and meaningful way. We want this patient to stay out of depression. This leads me to our second pillar, ongoing digital support. This pillar is about keeping mental health patients in state of remission, and it is grounded in innovative digital care provided to patients before, during, and after treatment.
While these tools are especially relevant for the psychedelic-assisted therapies that we are developing, we see great potential to apply digital support across our entire drug development pipeline. We believe pairing digital therapeutics with a rapid-acting pharmacological agent from pillar one will allow us to achieve sustained behavioral change in mental health patients. What works for one patient, though, might not work for another. As we all know, the mental health patient population is highly heterogeneous. Which brings me to our third strategic pillar, biomarker-driven precision mental health. When it comes to mental health, there is no one-size-fits-all approach. This pillar is about identifying patient subtypes using biological and digital biomarkers to treat patients with a therapy that is right for them at the right moment in time.
We believe this will reduce the need for trial and error and give each patient the best chance of receiving the treatment that works for her or him. Each of these pillars has a true disruptive potential on its own, but it is by combining them that we can really unleash their full potential, allowing a true leap forward for mental health patients by achieving clinically meaningful and sustained behavioral change. We have already laid the groundwork for all three pillars, for example, by building out our digital, data, and biomarker teams. We will continue to be highly active in all of these three pillars. That said, our focus for the next few years will remain on pillar one, rapid-acting intervention, generating value by executing and further expanding our drug development programs and by further strengthening the robust patent portfolio of our compounds.
Let's now have a closer look at our achievements in our first pillar since January 2021, and then look ahead what we can expect over the next two years. Since January 2021, we launched eight new programs, including three programs dedicated to drug discovery. This brings our total number of drug discovery and development programs to 13 as of today. It goes without saying that we intend to stay highly active in business development this year and also beyond. From an R&D perspective, we also achieved many meaningful milestones in 2021. Allow me to highlight just a few of them. We saw positive phase IIb data for COMP360. The results of this groundbreaking trial in treatment-resistant depression or TRD led us to increase our stake in Compass Pathways to 22.8%.
We also shared positive phase IIa proof-of-mechanism data for RL-007. This compound is being developed to treat cognitive impairment associated with schizophrenia, a condition that today has no approved treatment options. In September 2021, we initiated the phase IIa proof-of-concept trial with PCN-101 in TRD. We anticipate top-line data for this trial by the end of this year. We also recently received IND clearance from the FDA to run our first clinical study with this compound in the United States. As you can tell, we made a lot of progress here, and as we look ahead to the upcoming two years, we are anticipating at least 14 R&D catalysts. Alongside these exciting R&D milestones, we saw further validation of our approach to capture the value of our programs.
In March 2021, we were thrilled to announce a collaboration with Otsuka Pharmaceutical. This significant licensing deal for PCN-101 represents the first major partnership between a biopharmaceutical company developing psychedelics and large pharma. When it comes to capturing the value or monetizing our programs, we have a high degree of optionality. With the IPO of Compass Pathways and the licensing deal with Otsuka, we have already successfully demonstrated some of the ways in which we intend to capture value in the future. We will decide the best and most viable option of capturing value, including self-commercialization for each of our assets on a case-by-case basis. Before handing over to Srini, let me give you an update on our philanthropic arm, atai Impact, that we announced in October 2021.
Since then, atai Impact has launched the atai Fellowship Fund at MGH Center for the Neuroscience of Psychedelics. We also made sizable donations to MAPS and towards humanitarian support in Ukraine with a special focus on mental health. We believe that these philanthropic efforts are strongly aligned with our vision of healing mental health disorders for everyone everywhere. Our Chief Scientific Officer, Srini, will now walk you through a more detailed update on our pipeline.
Thanks, Florian. As Christian and Florian have mentioned, we're in a truly exciting time here at atai. Since the start of 2021, we've added five new drug development programs and three new technologies to our portfolio. We completed two important trials last year, and we're rapidly advancing the rest of our growing pipeline towards the clinic. As shown on this slide, our pipeline targets many important indications in mental health, including cognitive impairment associated with schizophrenia, treatment-resistant depression, generalized anxiety disorder, post-traumatic stress disorder, and opioid use disorder. The advancement of our deep pipeline will result in many clinical readouts across this year and next. In 2022, we're eagerly anticipating data from our ongoing phase II A proof of concept trial of PCN-101. This is a potentially groundbreaking at home rapid-acting therapy for TRD.
Later this year, we intend to conclude a phase I comparative bioavailability study to bridge from the IV formulation to a subcutaneous formulation of PCN-101. We believe that this formulation will be key to supporting at-home use. We expect continued clinical advancement in our other programs. We have a phase I trial readout and a phase IIa trial initiation for GRX-917. We've initiated a phase I trial at Kures, and we also anticipate phase I trial initiations at EmpathBio, Viridia, and Revixia. In total, we expect to obtain 6 phase II and 4 phase I trial readouts across 2023 and 2024. That's an amazing number of milestones in a really short period of time. The second program on the list is targeting cognitive impairment associated with schizophrenia or CIAS.
Schizophrenia is a leading cause of disability worldwide, primarily due to the marked and essentially ubiquitous cognitive impairments that are associated with this condition. There are no treatments currently approved for CIAS. Our platform company, Recognify Life Sciences, is developing RL-007, a GABA, glutamate, and cholinergic receptor modulator for the treatment of this debilitating condition. RL-007 has been tested in nine third-party clinical trials to date, with pro-cognitive effects observed in two phase I trials and one phase II trial. Data from a previously conducted phase I trial are shown here. This study involved a scopolamine challenge, a widely used clinical model of cognitive impairment. Some of the deficits induced by this challenge, including attention as shown on the left, and verbal memory shown on the right, were improved by the co-administration of RL-007.
The beneficial effects were present only at 30 mg dose, as highlighted by the circles on the two graphs. Benefits were absent at higher doses consistent with an inverted U-shaped dose-response curve. Importantly, this pro-cognitive effect was associated with alterations on quantitative EEG or qEEG. Specifically, it was found that RL-007 induced a relative spectral shift from lower to higher frequencies, thus providing a biomarker for target engagement. More recently, a large phase II trial was conducted in 181 patients with diabetic peripheral neuropathic pain. The results of which are shown here. This condition is often associated with sub-clinical cognitive impairments due to the impact of long-standing diabetes on brain vasculature. Again, we saw pro-cognitive effects, notably in the domain of verbal memory. The benefit was seen in both immediate and delayed recall, as shown on the left and right-hand sides of this graph.
These results were consistent with the results of the previous phase I trial I mentioned previously. As you can see on the graphs, the benefit was seen only at the lower dose level. Again, consistent with an inverted U-shaped dose-response curve. Building on these studies, in December of last year, we announced a successful outcome of our phase IIa proof-of-mechanism study of RL-007 conducted in patients with CIAS. The results of this trial are summarized here. In this 32-patient, single-arm, single-blind study, RL-007 demonstrated clinically meaningful pro-cognitive effects. As you can see, there are dose-dependent improvements on several of the cognitive measures that we assessed. This was evident on the symbol coding test, a broad measure of cognitive function that correlates highly with the MATRICS Consensus Cognitive Battery total score.
The beneficial effects were most pronounced at the 20- and 40-milligram doses and started to wane at 80 milligrams. These data are consistent with the inverted U-shaped dose response seen in earlier studies. Additionally, the trial showed changes in qEEG that were consistent with the previous results seen in the phase I trial involving a scopolamine challenge. Based on these exciting results, we have decided to move into a larger randomized placebo-controlled phase IIa proof of concept trial. This trial will be powered to show improvements on cognitive measures. We plan to initiate the study later this year. Next, I wanna focus on our potential therapies for treatment-resistant depression or TRD. Depression affects 300 million people globally. It ranks as the second leading cause of disability worldwide. While current treatments are effective for certain patients, a significant percentage of patients either respond inadequately or relapse.
A third of patients are classified as being treatment-resistant. This is likely partly due to the heterogeneity of the TRD patient population. Let's first discuss Compass Pathways and its development candidate, COMP360, a proprietary formulation of psilocybin. As Florian mentioned, we consider the phase IIb trial to be a resounding success. Spanning 233 patients, 22 sites, and 7 languages, this was the largest, most logistically complex and most robust psilocybin trial ever conducted. The results of this randomized double-blind dose-controlled trial demonstrated that COMP360, when co-administered with psychological support, resulted in a rapid and durable improvement in depression symptoms. When compared to the 1 milligram dose, a single administration of 25 milligrams of COMP360 achieved a 6.6-point reduction from baseline to week three on the Montgomery-Åsberg Depression Rating Scale, or MADRS.
This is a remarkable improvement. Most recent approvals were based on a MADRS change of 4 or less. With a p-value of less than 0.001, the primary endpoint was robustly met. The compound was generally well-tolerated, with over 90% of treatment-emergent adverse events classified as being either mild or moderate in severity. Looking forward, Compass is scheduled to have an end of phase II meeting with the FDA in late April. They anticipate kicking off a phase III trial later this year. Perception Neuroscience is developing PCN-101, a formulation of R-ketamine for the treatment of TRD. R-ketamine is a glutamatergic modulator being developed as a rapid-acting antidepressant with non-dissociative properties, meaning it has the potential for at home use. A phase I study of IV R-ketamine was completed in September 2020.
The agent was well-tolerated over the dose range explored, and no serious or unexpected adverse events were observed. Following these successful results, in September 2021, we initiated a phase IIa proof-of-concept trial of IV PCN-101 in patients with TRD. This double-blind placebo-controlled trial consists of three parallel arms of 31 subjects each. Subjects will receive a single dose of placebo or one of two doses of PCN-101. Depressive symptomatology will be assessed over the subsequent 14 days using the MADRS. The trial is currently active across sites in Europe and U.S. sites will be launching soon. Data from this important study are anticipated by the end of this year. Positive results of this trial could be game-changing for patients as current rapid therapies require administration in a clinical setting. This comes with significant burdens for both patient and provider.
In January this year, we announced the clearance of our investigational new drug application by the FDA. This clearance supports the conduct of a phase I DDI study, which we intend to complete this year. We also anticipate completing a phase I relative bioavailability study this year. As I mentioned previously, this trial is designed to bridge the current IV formulation to a subcutaneous one. This formulation will be key to supporting the potential of at home use. In addition to these clinical programs, we have two preclinical programs focused on TRD entering the clinic this year. Our platform company, Viridia Life Sciences, is developing VLS-01, a formulation of N,N-dimethyltryptamine or DMT. In addition, our platform company, Revixia Life Sciences, is developing RLS-01. This is a formulation of Salvinorin A, a pharmacologically unique psychedelic compound.
We plan to initiate both phase I trials with these compounds later this year. We have a total of four exciting TRD drug candidates in our pipeline. Together, these represent a range of pharmacologically unique treatment options for TRD, a heterogeneous indication with an urgent need for innovation. Turning to anxiety, let's talk about GRX-917, which we're developing at GABA Therapeutics for the treatment of anxiety disorders. Anxiety disorders are the most prevalent of mental health disorders. It's estimated that approximately one-third of people are diagnosed with an anxiety disorder at some point in their lives. GRX-917 is a deuterated form of etifoxine, a compound that was first approved in France in 1979 for the treatment of anxiety. Pharmacologically, etifoxine is thought to act as a TSPO agonist, increasing the production of neurosteroids like allopregnanolone.
Etifoxine is rapid acting like benzodiazepines, but without significant sedation, cognitive impairment, or ataxia. A recent analysis of post-marketing surveillance data encompassing over 14 million prescriptions has demonstrated etifoxine, unlike benzodiazepines, is not associated with abuse or dependence. In June 2021, we initiated a randomized double-blind, placebo-controlled phase I trial of GRX-917. As outlined at the bottom of the slide, this study is a single and multiple ascending dose trial. It's focusing on the safety, tolerability, PK, and pharmacodynamics of GRX-917. Based upon the mechanism of action of this compound, we're using qEEG as a target engagement biomarker, looking for increased relative spectral power in the beta band. Such changes have been demonstrated with IV allopregnanolone and related compounds. They were also noted in a phase I trial of etifoxine that we conducted in 2019.
We have completed the single ascending dose element of the phase I trial, and the multiple ascending dose component is ongoing. Top line for the entirety of the trial are expected by the middle of 2022. We anticipate initiating a phase IIa proof-of-concept trial later this year. We're excited at the prospect of GRX-917 combining the best characteristics of benzodiazepines and SSRIs, potentially offering patients with anxiety a new and much improved treatment option. Next, we'll move on to opioid use disorder or OUD, a major health challenge, particularly here within the U.S. Both of our OUD-focused compounds are presently in phase I clinical trials. At DemeRx IB, we are developing DMX-1002, an oral formulation of ibogaine, which is a naturally occurring psychedelic compound.
In September, we dosed the first subject in the phase I component of a combined phase I/IIA trial. This trial is designed to assess the safety, tolerability, PK, and efficacy of DMX-1002. We expect to obtain safety data from the phase I portion of this trial later this year. Results that we're eagerly anticipating. Our second OUD focused company, Kures, is developing KUR-101, a deuterated form of mitragynine. This compound, which is the active moiety in kratom, is considered an atypical opioid receptor modulator that is thought to be safer and better tolerated than classical opioids. A phase I single ascending dose trial of KUR-101 was initiated earlier this year with the first subject dosed this month. This study is expected to read out by the end of this year.
By the end of the year, we will have 10 compounds in phase I or phase II. This is a remarkable achievement for a company that is only three and a half years old. On to our discovery stage programs. In the past year, we've added 2 new subsidiaries, TryptageniX and Invyxis, targeting NCE development. These two companies are focused on bioprospecting and medicinal chemistry, respectively. They supplement the AI-based computational chemistry approach of EntheogeniX, a company which we founded in 2019. Taking together these three discovery platforms, each incorporating a unique approach, means that atai boasts one of the most robust discovery engines in CNS. These platforms will be crucial to the expansion of our pipeline with therapies that are even more innovative in the years to come.
Our digital therapeutics, or DTx, and data efforts are key elements to achieving clinically meaningful and sustained behavioral changes in patients. DTx and multimodal data collection and analysis are integral elements of our strategy concerning ongoing digital support and precision mental health. We are focused on digital therapeutics to improve the safety, efficacy, and scalability of our compounds. With Psyber, we are developing brain-computer interface-based digital therapeutics to ultimately provide a digital guide to support psychedelic administration. With IntroSpect Digital Therapeutics, we're developing personalized app-based treatments to improve patient outcomes. In March 2021, IntroSpect launched a user acceptability trial for participants that were undergoing ketamine therapy. Finally, our data analytics platform synthesizes digital, biological, and phenotypic data to allow for better characterization of patients in our target indications. Analysis of these data may allow for the generation of novel biomarkers, ultimately supporting our goal of precision mental health.
We have come a very long way in our first year as a public company, and I'm immensely proud of all that we've achieved. We have an extremely robust pipeline, cutting-edge discovery platforms, and highly innovative digital and data products. These programs put us in a particularly strong position to achieve our upcoming clinical milestones and ultimately make a meaningful difference in the lives of patients with mental health disorders. With that, I will now turn the call over to Greg for an overview of our financial highlights. Greg?
2021 was a pivotal year for atai and put us on a strong financial foundation to support our ongoing growth in pursuit of our mission. Our year-end 2021 cash balance of $362.3 million represents a cash runway for approximately two years and will fund the operations into 2024, inclusive of our ongoing business development activities. During 2021, we raised net proceeds of $410 million from our June Nasdaq IPO, the Series D, and other financing activities. We received $20 million from the Otsuka license and collaboration agreement in Q2 of 2021. During the year, we made important strategic investments in our platform companies totaling $80.2 million.
Notably, $52.5 million in Compass Pathways, $14.9 million in IntelGenx, our oral drug delivery formulation company, and $10.6 million in GABA Therapeutics in support of their pursuit of innovative treatments for anxiety disorders. Our full year 2021 total operating expenses were $156.2 million, with R&D expense of $48 million and G&A expense of $92.8 million. Non-cash stock compensation expenses for the full year 2021 were $63.4 million, with $19.4 million recorded to R&D and $44 million to G&A. Our R&D expenses for 2021 represented an increase of $36.6 million over 2020, driven by increased CRO expenses related to advancements in R&D programs and increased R&D personnel costs. Included in R&D personnel costs was an increase of $19.1 million of share-based compensation expense.
Acquisition of in-process R&D expense recorded was $15.5 million for the 12 months ended 2021, related to our investments in TryptageniX, InnarisBio, and Neuronasal, compared to $12 million for the prior 12 months ended December 2020. G&A expense for 2021 increased by $12 million over last year, driven primarily by G&A personnel costs, professional consulting fees, and other G&A costs related to supporting platform growth and public company requirements. These increases were partially offset by a decrease in G&A share-based compensation expense of $22.9 million. Looking forward, we expect R&D and G&A operating expenses to increase year on year as we initiate multiple clinical trials across the pipeline, and we make the necessary investments in our talent and infrastructure to support the continued growth of our research and development efforts.
In closing, important to understand that we are well capitalized, well organized, and built for the long term, with substantial cash resources to fund our operations through numerous value-creating clinical development catalysts this year and next. Thank you. I'll now hand the call back to Florian.
Thanks, Greg. I'd like to thank our employees for their ongoing dedication to advancing our vision and to our investors who actively support our work. We are incredibly proud of our strong execution in 2021, delivering on advancing our programs, validating our business model through key collaborations, and further expanding our diverse pipeline. This ongoing positive momentum positions atai for an even more exciting future. We anticipate 10 of our programs to be in active human trials by the end of the year, with at least seven clinical readouts in the next two years. With that, we are very happy to take your questions.
Hello.
Good morning, and welcome to atai Life Sciences Q4 and year-end 2021 financial results.
Andrew Tsai at Jefferies. Hey, guys. Thanks for the updates. Appreciate it. First question is on the GRX-917, the etifoxine program that has data coming up mid-2022. I'm just curious, what would drive a no-go decision for you guys? You know, what's a deal breaker in your view in that phase I data set?
Hey, Andrew. Thanks for the question. I think the most important thing there would be some sort of safety and tolerability concern. I mean, that's gonna be the key point, not surprisingly. As we've mentioned, we're pushing the doses and looking at quantitative qEEG and other things, but the most important thing is gonna be safety and tolerability.
Okay. Understood. Second, my follow-up question is PCN-101. You know, at the end of the day, do you think this drug is completely free of the unwanted side effects that we see with ketamine or S-ketamine? And if not, then can you maybe share some examples where there has been an approved drug that does cause subtle hallucinations, dissociation, but is still used at home? Thanks.
Yeah, good question. The doses that we picked based on the phase I trial were associated very minimal, either no dissociative effects or very minimal dissociative effects. That's actually how we made the decision around those doses. Of course, we need to validate that. We need to confirm that in a patient population. Obviously that's gonna be important, an important objective of the phase II. In terms of compounds that have some sort of dissociative or psychedelic effect, the example that I like to provide is lorcaserin or Belviq. This is a compound that was approved for obesity, obviously a very widespread condition. The compound is a 5-HT2C agonist. It has 5-HT2A activity.
If you took 4 or 5 X, the normal dose, the normal daily dose, you actually got a pretty solid psychedelic effect. That's actually reflected in the clinical trial section of the label. I think there's precedence. It's all about therapeutic index.
Perfect. Thank you.
Of course.
Thanks, Andrew Tsai. Our next question will come from Neena Bitritto-Garg at Citi.
Sorry about that. Hey, guys.
Hi.
Thanks for taking the question. I was just wondering if you could talk a little bit about PCN-101, kind of following up on the last question, just around, you know, I know you said that you recently got your IND cleared by the FDA for this program. If you could talk a little bit about how the FDA is feeling about, you know, potentially studying PCN-101 in an at-home setting in a later stage study and kind of what they would require from this initial study, you know, from a dissociative effects perspective, in order for you to be able to do that.
Yeah. Thanks for the question, Nina. It's not gonna come as a big surprise if this is ultimately gonna end up being a review issue, right? You know, they're not gonna really opine until there's actual data. It's, you know, it's hard to fault their position on this. You know, in general, what would you anticipate? What would you require? I think, the therapeutic index is gonna ultimately be an important element. This is scheduled, of course. I mean, ketamine is scheduled as well. It's a Schedule III compound. There are plenty of at-home Schedule III compounds or even Schedule II compounds. I don't anticipate that being a major issue. Of course, the other element to this is formulation.
We wanna make sure that we can control the use of this compound, and that's one of the reasons that we actually are moving forward with subcutaneous. There are devices that allow us to, you know, really tightly control administration of using that route of administration.
Okay. Got it. Maybe very quickly, if you could also talk a little bit about the differentiation for the program at Viridia. I'm just curious if you could talk a little about the formulation, how you're thinking about administering it, you know, in the phase I study. That'd be great.
Yep, absolutely. Our primary formulation there is an oral transmucosal film. We're developing this in conjunction with IntelGenx. And the reason we're doing this is that you can really tightly control. You can almost engineer the release profile using an oral transmucosal film. What we want to accomplish here is a Tmax of, say, 5-10 minutes, somewhere in that ballpark. We wanna wrap up the entire psychedelic effect over the course of maybe 45 minutes or so. The rationale here is to fit into the esketamine treatment paradigm. But with respect to that formula, you know, with respect to that release profile, we want it to be kinder and gentler on the upswing. This is in contrast to, say, inhalational approaches.
You know, we're not entirely sure whether how the duration of psychedelic effects impact long-term efficacy in terms of, you know, stability long term. You know, having something on the order of an hour, you know, seems to make sense versus something that's closer to probably 10 minutes. Of course, that's logistically a lot easier to deal with than something that's, say, 5 or 6 hours.
Thank you.
Of course.
Thanks, Nina. Our next question will come from Charles Duncan at Cantor Fitzgerald.
Okay. Can you guys hear me?
Yep. Perfectly fine. Hi, Charles.
Okay, super. Hey, Florian and team. Congratulations on all the progress in the last year, and thank you for the very thorough overview. That was helpful. Reminder. Had a couple of questions regarding the pipeline. You know, there's been some discussion about PCN-101 and, you know, it proof of concept data in TRD later on this year. I guess I'm wondering how could you define good versus great results? And is there a potential for exceeding S-ketamine activity or duration of that activity?
Let me take the last question first. If you think about the preclinical data, you know, there's multiple experiments that have been done. There was a greater magnitude of efficacy seen with R-ketamine versus S-ketamine. Equally importantly, there was a longer duration of activity that was seen. Now, in clinical settings, there's anecdotal data that suggests that maybe racemic ketamine is a little bit more efficacious than S-ketamine. You take this all together, and there is a potential for better therapeutic, I mean, for, you know, better efficacy and/or longer duration of efficacy with R-ketamine versus S-ketamine. Going back to the first question in terms of what is, you know, what's a win? Of course, we wanna hit our primary endpoint, right? Not a big surprise. Seeing a substantial and statistically significant improvement on the MADRS is gonna be key.
Equally key, equally important is the therapeutic index, which I alluded to earlier, right? We want to see a good multiple between the efficacious dose and the therapeutic, and the therapeutic dose. We've sort of pre-selected that, right? It's the 60 milligram dose, the high dose that we're looking at is indeed essentially non-psychedelic or non-dissociative. It's right on the cusp. Of course, there may be differences between healthy volunteers and patients. The 30 milligram dose is quite substantially different in both healthy volunteers and in, hopefully in patients as well.
Okay. That's helpful. One quick question on RL-007. You mentioned moving forward in a phase IIa, and you also mentioned the complexifier, if you will, of an inverted U-shaped dose-response curve. Have you disclosed the dosing that you plan to pursue and the duration of that study?
Right, there is an inverted U shape curve. We saw the most robust benefits on both. If you take it all in aggregate, quantitative EEG, symptomatic improvement, we saw the best efficacy in a 20-40 range. It'll be somewhere in that ballpark. I mean, that shouldn't be a great surprise based on the proof of mechanism study. Duration and all these other items we're in the process of working out now. We have had multiple SAB meetings and kind of finalizing our trial design there. Of course, as that becomes a bit clearer, we will, you know, we'll obviously publicly disclose that.
Final question for Florian, more of a big picture, kind of strategy question. If you fast-forward, say, you know, let's say three years or even two years, what do you think, this type of call will involve? Will it be primarily discussion of different pharmacological agents that are moving forward into late-stage development? Or will it also, include increased visibility on the digital therapeutics? Thank you.
Thanks, Charles. Yeah, very short answer is both. We will be, as I said earlier, we'll be laser-focused on the very first pillar, so the rapid-acting dimensions, our drug development pipeline, and we will anticipate that a large share also of these calls will be about that. But while we're progressing through our trials and we anticipate that we will have, this year, the first time our digital therapeutic combined with our compound in a clinical trial or in multiple ones, then we of course will also more and more talk in detail about the combination products going forward. Yeah, lots of R&D catalysts coming up. Yeah, looking forward to the next years to discuss the progress.
Very good. Look forward to it. Thank you.
Thanks, Charles.
Thanks, Charles.
Our next question will come from Ritu Baral at Cowen.
Hi, guys. Thanks for taking the question. Maybe we'll start with a high level, for Florian. Florian, you had mentioned, as one of your pillars going forward, you're going to do biomarker driven, precision mental health strategy or, investigate strategies.
Yeah.
When you count biomarkers in psychiatry and neuropsychiatry, are you thinking genomic biomarkers? Are you thinking EEG-based biomarkers and other electrophysiological biomarkers? How should we think about that? I have some more detailed questions on the programs.
Sure. In general, we think about biological biomarkers and digital biomarkers, digital phenotyping. Srini can go a little bit into detail on the biological one. We have actually one program running with PsyProtix that looks at metabolomic profiling of patients, which we believe is very exciting. Then on the digital side, there's very interesting research going on on behavioral biomarkers. There's voice typing behavior, et cetera, so that allows us by using our digital therapeutics hopefully in the future to better characterize patients. It's really both biological biomarkers and digital biomarkers. Srini, I don't know if you wanna deep dive a little bit into the metabolomics angle that we have.
Sure, yeah. Just briefly, the PsyProtix is really focused on that, looking at particular markers of mitochondrial metabolism, essentially. There's an association with mitochondrial metabolism and certain subsets of depression. This is unique, right? This is a very clear biologically underpinned form of depression. We want to test these hypotheses. Address the mitochondrial dysfunction, non-psychedelic, clearly very different, and see if we can improve mood in that particular subset.
Great. A quick follow-up on etifoxine. As you think about the data that's coming out, you said mid-year, and the qEEG beta band shift, how should we be looking at that, the magnitude of that shift versus, say, the other GABA agents in development? You've got a GABA plus serotonergic component to the mechanism. Are you gonna show or do you need as much of a beta band shift for this drug to have equal efficacy as other GABA agents?
Yeah, that's a great question. We don't necessarily anticipate the same magnitude of shift. There's a very simple reason for that, right? This compound is increasing production. There's a seeming site specificity or regio specificity in the brain to that. This is in distinction to an agonist, right? Whether it's a PAM or a direct agonist, you typically see a much larger pharmacodynamic effect with such compounds. Again, don't necessarily anticipate. I mean, we'll see how it all plays out, right? We're doing a lot more dose ranging with 917 than we could do with etifoxine. Still, that's not necessarily the expectation.
Got it. Okay. Getting back to 101, almost a housekeeping question. On the safety side, are you monitoring heart rate and blood pressure, that is an effect of S-ketamine? Do you have evidence that you'll have less of sort of a hemodynamic effect or heart rate effect than Spravato? Does that factor into the ability to dose at home? Thanks.
Absolutely. Yes, we are of course gonna monitor blood pressure, et cetera, in our trial. As for whether that will affect at-home use, the answer is probably yes. At the moment, it's really difficult to say whether or not there's any benefit versus S-ketamine, right? With, you know, phase I's are not that big. They're of course healthy volunteers. It's a little bit different. It was IV, right? IV is also gonna be a little bit different. Ultimately, we're gonna go forward with subcutaneous. We're gonna be doing that relative bioavailability study a little later this year. We should have results by the end of this year. That's gonna be the real key in terms of what the blood pressure profile looks like.
Of course, taking that and putting it into patients, you know, that's gonna be the most definitive.
Understood. Thanks.
Yeah.
Thank you. For our next question, we'll be bringing on Judah Frommer from Credit Suisse.
Yeah. Hi, guys. Thanks for taking the questions and all the details so far. First, just following up on 101 and that sub-Q formulation. Can you remind us of the timing relative to trial data for the bridging study and how tightly those will be reported? Then also, I mean, Srini, you kinda talk about, you know, we will go forward with sub-Q. Is there any, you know, potential engineering or stumbling block that you could foresee pushing off sub-Q formulation and is there a world where we're only IV or is it just a matter of time until we get to sub-Q?
Answering that latter bit, I mean, clearly IV is not consistent with at home use. We will develop—I mean, sub-Q is really the best from our perspective. It gives us the most robust and least variable pharmacokinetic profile compared to, say, intranasal. That's why we're really interested in sub-Q. In general, subcutaneous is not necessarily that difficult to formulate, right? I mean, in the grand scheme of things. You do have to worry about local tolerability. We've addressed all of those issues at this point, at least pre-clinically. Of course, we have to demonstrate that in humans. There's lots of optionality there. In terms of the timeline, yes, we anticipate both results towards the end of this year.
Okay. That's helpful. Then just moving back to the precision biomarker discussion, how should we think about kind of the overall strategy with biomarkers? Is it more for patient enrichment? Is it coming up in conversations with regulators? Obviously, you know, it's a relatively, you know, new area of kind of a precision approach to drug development. Curious if it factors into those. Then anything that can be integrated into, you know, potentially, patents and exclusivity from a biomarker perspective.
The latter one, absolutely. You know, whether it's in the expanding on that, if it's a companion diagnostic type approach, I mean, absolutely it's gonna be in the label. Of course, we're gonna have IP around that, right? So that would be, you know, obviously fantastic. Why are we doing it? Well, you know, we know that depression is really heterogeneous, right? It's the phenotype's the final common pathway for probably a whole bunch of underlying pathophysiology. So that may explain why you have treatment-resistant depression.
Why do you have a third, a half of patients that don't respond? Presumably, some of it is this underlying pathophysiology. Right. So that's what we wanna address. We wanna be able to increase the effect size, right? What is the magnitude of the change on the MADRS, as an example. Decrease variability, so again, tying into effect size. There will be an enrichment element potentially leading to smaller trials, but of course, ultimately something that may very well end up in the label.
Okay. That's really helpful. Then lastly, maybe for Greg, can you just help us with kinda cash priorities over maybe the next year or two, you know, R&D? Is there any way to force rank the programs that you have, you know, anticipated over the next year in terms of a capital need and then, you know, business development and how dynamic kind of those levers are?
Thanks, Judah. You know, we look at the year just transpired. It's been a remarkable one for our financial footing for the company between the success of $410 million coming in between the IPO, the Series D, and in a position of two years of runway with $362 million at year-end. This is sufficient budget to manage all of our clinical and pre-clinical programs and what we've heard about today, along with the headroom for investing in additional BD, as Florian and Srini have mentioned on the call.
From a financial strategy perspective, as your CFO here, pretty proud of what we've done and the heavy lift to get to this point over the last two years, and grateful for apperian to you and our investors and the team that we built, just pretty remarkable. You know, I think investors can look at this as a really solid foundation, footing here on the financial side.
Is it right to think about later stage programs as the most expensive, or are there any kind of, you know, phase I's you'd highlight as being more expensive than a kind of a typical phase I drug trial?
As a general rule, things get a bit more expensive as you move through the phases of clinical development from the experience we all have. I think that the situation specific allocation of capital across the platform, this is something we take a close look at. We'll be very responsible and thoughtful about how we allocate the capital, so we both drive these programs forward and live within our means. I would answer it that way and more to come.
Thanks.
Yeah. Very, very quickly to add, Judah. I think what we basically do is a very continuous program review where we thoughtfully look at the capital deployed, and basically new data coming out. I think the example of Compass Pathways, where we increased our stake based on the strong data that came out, is a very good example how we make capital allocation decisions, with, yeah, across our pipeline. That's a really continuous process where we, over and over again, review programs and make the decisions for, in general, resource allocation as we, for many programs, not only provide capital, but also our deep domain expertise and people that work on all those programs.
Great. Thanks, guys.
Thank you. For our next question, we have Brian Abrahams from RBC Capital Markets.
Hey, guys. Thanks for taking my questions. Congrats on all the progress and really appreciate the comprehensive overview of the pipeline. Maybe starting off with on COMP360, which you alluded to the positive proof of concept data we've seen for psilocybin and which you obviously have a stake in the success of. I'm also wondering and sort of recognizing that, you know, your own psychedelic compounds all have, you know, different profiles in terms of administration and half-life. I guess I'm wondering if there's any generalizable learnings you can take away from that COMP360 data set to help inform your future trial design, conduct, what you might be looking for, going forward for your proof of concept studies as those programs mature.
Yeah. The trial was essentially the same sort of thing that we're doing with R-ketamine, right? We're doing a single administration. They did a single administration. It's really to understand in a robust fashion what the duration of efficacy is. That was, you know, again, really critical. We're doing, you know, as we move forward with DMT and other things, we're anticipating redose, just like we're anticipating redose for R-ketamine. I don't think there's anything, you know, that's not gonna be too shocking. When we introduce those factors of redosing into, you know, R-ketamine obviously is gonna be the next trial. IV is not particularly great for that. For DMT and others, we're still working on when they'll get introduced into the studies. I think the most important thing there was redosing.
That's gonna drive long-term efficacy. That's what's gonna drive these folks into remission, which of course is really what we're after here.
That's really helpful. Maybe on GRX-917, I know the SAD MAD studies are still ongoing, so the data's still very preliminary. I guess I'm curious if you could maybe just characterize your overall level of confidence on that program based on what you're seeing both pre-clinically and clinically so far, in terms of the ability for the deuterated form to have comparable or even better PK characteristics and maybe but maintain the pharmacologic effects of etifoxine.
Yeah, of course, we're very enthusiastic about this program for you know, the main reason that this compound, etifoxine, the parent, if you will, has been, I don't know, on 12 million people at this point, right? So there's you know, the review on safety was over 14 million scripts, but it's been approved in France, and that was only in France. It's been approved, I think, in over 30 countries at this point. So lots of experience, lots of use across a range of anxiety disorders. Pre-clinically, we know that this compound and etifoxine and deuterated etifoxine have the same effect in terms of increasing the production of neurosteroids. So we're pretty confident on that.
In terms of the phase I itself, it's, you know, it's obviously too early to say. We did the SAD. I mean, there's some interim analyses, but really we wanna get the totality of the trial done before, you know, diving in and talking about the results.
Okay, great. No, that makes a lot of sense. Then maybe one more from me if I could. This is I guess also for Florian and Greg. It seems like there's a fair amount of capital earmarked for potential additional business development. Can you talk a little bit more specifically about the types of assets or technologies that you might be looking for? Would they be more along the psychedelic side or non-psychedelics? Are you looking more for enabling technologies to augment some of the pharmaceuticals that are in the pipeline? Might you even consider branching into other disease areas that are within neuroscience and neuropsych, perhaps adjacent to mental health? Thanks.
Sure. Yeah, Greg, maybe let me go first, and then you chime in. Ultimately, we're very much agnostic when it comes to kind of modalities or the ways that we can improve mental health disorders and ultimately help patients. There's no specific focus on psychedelics or non-psychedelics or digital. We are basically organizing our activities along the three strategic pillars that we discussed earlier. Rapid-acting intervention, where we see strong neuroplastic effects that we can use to kind of catalyze behavioral change. We are very excited about the digital therapeutics that we have in development currently, basically both hardware and software to help along the patient journey. The last one being precision mental health, as we've discussed.
We see great potential and a great use of capital, in all those three pillars, and also a great ROI for shareholders. Ultimately, we believe that the drug development pipeline in itself, we can expand there even further within the scope that we have right now. Neuropsych is basically what is interesting for us from an indication perspective. Everything that we add should be very complementary. We wouldn't add a 5-HT2A agonist most likely, but look at uncorrelated assets in terms of a risk profile. That is, you know, roughly a summary how we think about deploying capital.
Great. Thanks so much.
Thanks. I have a footnote there just to echo that. I think it's from a financial point of view, there's room in these plans here in our strategy to add to this family of companies. The screening process that we go through is pretty robust and what you'd expect in terms of screening for a strong IP, market potential, value add for shareholders. That would be the key takeaways.
Got it. Thanks again.
Thank you. For our next question, we have Patrick Trucchio from H.C. Wainwright.
Hi, good morning and good afternoon. A couple of questions. The first one's just with at least 14 drug development enabling technology catalysts over the next 2 years, can you tell us which update or updates you believe are underappreciated or perhaps not as widely understood, and what the expectations are around those updates?
Srini, do you wanna take that one?
Sure. Yeah. At least I can start, Florian, we can jump in. You know, as we just talked about, GABA is really exciting. It's got a lot of previous use history. It sometimes might get a little bit of short shrift. I think it's really, you know, the phase I trial is exciting. We're gonna be kicking off the phase II a little bit later. Viridia, you know, with DMT, lots of interesting work that's being done on DMT, really unique profile with our formulation and builds extensively on the data that's been generated with Compass already. I think these are some of the things that are of great interest to me, certainly in terms of moving forward.
Some of the digital integration I think is gonna be very exciting. There's gonna be a lot of news around that as we move forward as well.
Yeah. Maybe just to add to this, I think as you mentioned, with more than 14 catalysts coming up, often the focus tends to be on the more advanced compounds. I think it's what is exciting about Atai is really kind of this diverse pipeline, the diverse pharmacology and the richness and useful that you mentioned that really provides this nice continuous drumbeat for investors. It's really the totality that is often overlooked because so much is going on that I would like to highlight here.
Then just, you know, regarding the end of phase II meeting for Compass in April, I'm wondering what Atai would consider to be the ideal outcome from that meeting. Separately, I'm wondering how do we think about COMP360 relative to the TRD programs that Atai has running. You know, there's PCN-101, RLS-01, VLS-01. Specifically, is there a place in the depression treatment paradigm for all of these treatments, either in the in-home or in-clinic settings?
With regards to the end of phase II meeting, obviously clearance to move forward into phase III and agreement on what the phase III program looks like is gonna be key, right? That's a win. That's a win for us. In terms of how these different assets gonna fit together, you know, psilocybin is the furthest along. It's a fantastic asset. We got great results, as we talked about with the phase IIb trial. That, of course, is one of the key anchors. You know, I always like to think about that being one anchor and esketamine being the other. You know, the DMT asset that I was talking about is sort of the second generation in some sense, right? We've optimized pharma. We've optimized the formulation.
We've optimized duration of effect. That's sort of the next thing. Obviously, I'm a number of years behind psilocybin, right? It's going into phase I. Our ketamine, right? Our ketamine is totally different in its profile. It's glutamatergic. It's not serotonergic. Probably will pick up a different subset of TRD patients. It's at-home, which of course is a major point of differentiation, probably increases the total addressable market as well. Then finally, salvinorin A is just unique pharmacologically. Psychedelic, psychedelic-like. It's got some very interesting properties in terms of its subjective effects. Our hypothesis is it'll pick up a different subset of the TRD population. Of course, all of these also have label expansion opportunities, and they may also be non-overlapping.
Yeah. Just one last one, if I may. Just on DMX-1002, the phase I trial. I'm wondering if you can tell us how the doses were selected for this phase I trial. In determining the maximum tolerated dose, can you tell us what data is expected to be collected and released later this year and what you need to see to give increased confidence that you know the safety profile and tolerability can support advancing this program?
Yeah. Most of the data around ibogaine in terms of efficacy is using doses that are sort of in the 7, 8, and above range, right? We just started low to understand the compound. Understanding both the PK of ibogaine as well as its major metabolite noribogaine. That's why we started at 3 and then 6, 9 and 12. Nine obviously is a dose that is certainly consistent with previous work that's been done with ibogaine. In terms of what we're looking for, of course it's subject to the effect, general safety and tolerability. You know, not surprisingly, looking at cardiovascular parameters, right? There's literature that suggests that there are, you know, QT prolonging effects of ibogaine. You know, again, we're fully cognizant of that, but we want to, you know, characterize that.
Characterize it in the context of this patient population, in the context of in-clinic treatment, right? It's medically supervised treatment in a condition that has significant morbidity and mortality. That's the sort of balancing act that we're looking at. That's what we'll be reporting out on.
Hopeful. Thank you very much.
Yep.
Thanks. I think we'll have time for one more question from Sumant Kulkarni at Canaccord Genuity.
Morning. Thanks for taking my questions. Nice to see all your progress. I have a quick question on the pipeline on DMX-1002. What are the specific variables that are leading to the safety data now coming later this year versus earlier? The second is actually a two-part strategy question. Christian mentioned two things. One is your first mover advantage, and second, your commendable goal of becoming a household name for treating mental health.
On the first mover advantage, what are the key gating factors from bringing the entirety of Compass in-house, given the significant first mover advantage that company enjoys currently? On the household name component, it appears that several of your products might require clinical infrastructure to administer. What are your latest thoughts on perhaps starting some dry runs on that side by investing in clinics? Is that something that is not at all in atai’s plans?
Well, let me touch on the DMX one, you know, the ibogaine questions, and then I'll turn it over to Florian for some of the other, you know, to answer some of the others. I had mentioned what the key variables are with respect to what we're looking for in the phase I. We're looking for subjective effects that are consistent with the sort of the history, right? This psychedelic, oneirophrenic type experience, which seems to be very important for efficacy. That's the first thing. You know, it's all about risk benefit. Is the cardiovascular, the changes on QT, for example, are those, you know, are those acceptable for the context that I provided? That's really what we're gonna be looking for.
We'll be picking a dose from the phase I SAD, and then we're moving that forward into the phase II, which again, is double-blind, placebo-controlled, two-arm, looking at urine control, you know, urine confirmed, abstinence or at least harm reduction going forward.
Yeah. I'm happy to take the first or the second part of your questions. I mean, in terms of first mover advantage, I mean, starting out in 2017 with Compass, 2018 with atai, we had a chance to look at many, many compounds early on when psychedelic medicine was not as prevalently discussed in the neuroscience community and also among investors. We had a good chance to look at all compounds that we believe based on all the data have a commercial potential and also a solid avenue for patentability. That was basically where we're excited and also of course the science, so the scientific data that came out. That's how we basically assembled our pipeline on the psychedelic side.
As you know, we are also very active in the non-psychedelic compounds and the digital therapeutic side. On the question around clinics, I mean, we believe that our strength, the one and also our deep domain expertise in CNS is really drug development and CNS. That's where our core expertise lies, and that's where we also intend to focus going forward. That doesn't mean that we do not entertain discussions with infrastructure providers. I think that is key to be very early to think about scaling those therapies, also how our digital therapeutics tie into this. We will be very much thinking about how to best scale those therapies in a safe and responsible way. As of now, we don't envision to move towards brick-and-mortar or running clinics.
Thank you.
Thank you all for your questions, including those that we didn't have time to get to. As we are approaching the end of our allotted time, I'd like to turn the call back over to Florian for any closing remarks.
Sure. Thank you, Colin, and thanks everyone for listening in and for all your questions. 2021, as we've discussed, was truly transformative for atai. I'm deeply thankful for the analysts for dialing in, all of you, our team for the great effort over the last years and also to our investors to be an integral part of our journey so far. I'm really excited about what's yet to come.