Welcome back to H.C. Wainwright's twenty-sixth Annual Global Investment Conference. I'm Luis Santos, healthcare analyst, and it is my pleasure to introduce our next presenters, Florian Brand and Srini Rao, co-CEOs of Atai Life Sciences, a clinical-stage biopharmaceutical company aiming to transform the treatment of mental health disorders with a broad pipeline of compounds addressing anxiety, depression, substance use disorder, and cognitive impairment and schizophrenia, among other areas. Florian, Srini, welcome. It's a pleasure.
Thank you.
Thank you for having us.
To start, can you tell us a little bit more about Atai, how you formed the company, and what differentiates from other companies in this space?
Absolutely. Happy to start, and you actually gave a really perfect summary of Atai and what we are focused on. Clinical stage, couple of programs, ranging from phase I, phase II, also exposure to phase III programs through our ownership stake in Compass Pathways. Started the company in 2018 out of very personal motivations, seeing friends and family members develop severe mental health disorders and not finding the appropriate care or the needed care that they were seeking out. That was for us the very much kind of starting point to see what we can do about this very significant unmet need that persisted for so long. Very little innovation, despite that in unmet need in neuropsychiatry over decades.
Pretty much until the approval of Spravato, there was no real paradigm-shifting treatments being approved. And, we'll talk about Spravato likely a little later-
Sure.
because that's kind of was an inspiring paradigm that shaped the thinking about our own internal programs in a certain way. But really in this for patients out of really, really personal reasons and yeah, looking forward to further develop those compounds through the clinical trial stages.
We're gonna talk about each,
Mm-hmm.
At least four. You have several, but the four main areas and Compass programs that you have. But before that, you did mention the existing paradigm of Spravato, and there was recently also another attempt at another compound, MDMA, with assisted therapy, which that was rejected by the FDA. Can you tell us a little bit more, what are the read-throughs, if any, of that AdCom and rejection to your programs?
Yeah, so this question has come up a few times.
Well
so far. I mean, obviously, it, it was. I think it was impactful to the area because a lot of people sort of had it as a fate outcome play that this was going to get approved. And, you know, there was, it was an unusual package, an unusual data package that went in, and it was an interesting, you know, so the time course of this is, is quite interesting. They put their IND in in 2000 or 2001 , so this has been kicking around for over, you know, I keep referring to it as generational, in terms of an, an approval timeline.
Yeah.
So, there were a lot of idiosyncrasies with that program. The trial sizes were very small. The way they were handling therapy was very unusual. The fact that they included therapy and-
Mm-hmm
... had the drug on secondary to therapy was, you know, again, problematic from the FDA's perspective. So there were a lot of concerns there that, you know, didn't make this a slam dunk, at least in my eyes, going into it. Then the briefing, you know, then we had the AdCom and the briefing book around that, which didn't go swimmingly for Lykos, and of course, then the final CRL. From what we understand of the complete response letter, the agency is more or less going back and saying, "You kinda got to go back and do a more normal trial," as it were, right? So get efficacy in the absence of non-standard, non-standardized therapy. You know, get some durability data.
There were concerns about the fact that there were 40% of individuals that had taken MDMA before, you know, 40% of the trial participants. So it basically go back to the guidance document, essentially, and-
Mm-hmm
... kinda go back to that and, you know, get some new data around that.
The guidance that actually was earlier last year.
You know, absolutely. You know, and again, big picture, I don't know how much was really that unusual about the guidance document. We had had a discussion about that at the panel that we were just at. You know, I mean, a lot of what was in there was more or less what J&J did well before this guidance document. It spoke to some of the requirements around the... You know, they did talk a little bit about the therapy and what they're thinking about there. I mean, but fundamentally, it was just what you'd expect. I mean, if you're gonna include therapy, you need to also get efficacy around that, right? Or you have to go with standard of care therapy. I mean, just things like that.
Mm-hmm
... were fairly straightforward. So plenty of companies have gone, you know, Compass being a good example, and of course, J&J being a very good example. They had moved forward with later-stage studies in the absence of that guidance. So...
We're going to try to incorporate all of that that you said into each of the programs that you're developing. So let's start with VLS-01. What is it, and what differentiates it from other psychoactive compounds?
Yeah. So the story of VLS-01 actually starts roughly in 2019, 2020. We, you know, we were heavily involved with Compass at the time. Both Florian and I were actually on the board of Compass at that time. We were both private. One of the questions that always came up was around this six-hour, you know, administration of the compound and six-hour psychedelic effect. We sort of anticipated that, you know, we knew what the label for Spravato was, which is basically two hours in a clinic, right? So that was an interesting kind of target, and then we thought that, you know, potentially there would be an infrastructure that was built up. I mean, you had J&J backing up Spravato, right?
I know they got off to a slow start, but it's still J&J's muscle behind it. There was an anticipation that they would eventually get it to a place where they at least had a number of clinics. I think they've exceeded that. I mean, clearly, their run rate now is blockbuster. It's over $1 billion. But you know, basically, it was good to be able to follow with a company like behind J&J. Targeting to our paradigm was where we started. What could we do there? There's two psychedelics that do have short duration. One is 5-methoxy-DMT, the other one's DMT. DMT had more clinical data behind it. There was actually an ayahuasca study. DMT's active in ayahuasca.
There was an ayahuasca study that was double-blind, placebo-controlled, and treatment-resistant depression that showed efficacy. There were other reasons. There were some physical-chemical properties that made DMT a little bit better. We wanted a formulation that was patient-friendly and doctor-friendly, so no needles, ideally. And then, you know, we know a little bit about intranasal Spravato. There are some patients that don't like intranasal, it's about 10%, 15%. So we wanted to make it as simple as possible for patients. So, good news is, and the bad news is, it's complex formulation, but we have gotten there. So it's basically like a Listerine strip that's got the DMT in it. You put it on the buccal surface of your mouth, it dissolves over the course of about 20 minutes or so.
It gives you a psychedelic experience, well, it peaks out. Cmax is around 30 minutes or so, and importantly, the subjective effects go away within two hours, so again, it met our target for a less than two-hour experience. Very good tolerability. We, you know, just reported the results of a phase I study, exceeded expectations. Actually, the formulation was delivered more drug than we actually expected it to, and we actually had a high dose that was too high, and then we ended up backing down to a second dose, which is a bit lower. We actually had some psychological distress at the high dose.
It's good to be able to have a high, you know, to have exceeded a little bit in a phase I, so you can kind of know where you want to go with the phase II. So yeah, we picked 120 milligrams. We had a pre-IND meeting, and our IND clearance just occurred a couple of days ago.
Congratulations.
Thank you. So we are ready to rock and roll on that.
Could you tell us which patients you're going to enroll? How big, how large is going to be this trial?
Yeah, it's going to be approximately 142 patients. It's treatment-resistant depression.
And so those are the next steps for the program. What would be our expectation for the next readout?
So that trial is anticipated to read out, around the end of next year. So it'll be initiating, you know, in the fourth quarter, essentially around the end of this year, and then reading out the end of next year.
Right, so not the next twelve to-
Yeah.
Twelve months and change. Moving on to your next program, EMP-01. Again, could you tell us what is it and what data have you generated, and how is it differentiated from... And I'm going to jump the gun here, how is it differentiated from racemic MDMA?
Yeah. So, yeah, that's obviously gotten a lot of questions because it is, in fact, R-MDMA. So Lykos, of course, was developing MDMA. That's two enantiomers-
Mm-hmm.
Right? So one of them is R, so these two enantiomers commonly have different pharmacology in many drugs. The R-MDMA had more of a serotonergic profile based on preclinical data. The S-MDMA is much more of a stimulant. So the initial hypothesis was that R-MDMA would preserve the empathogenic and entactogenic effects of MDMA, but have a better therapeutic profile, because cardiovascular risk factors are an issue with PTSD in many situations. So we thought we could improve on that pretty markedly. So we conducted a phase I trial last year, and we found some very unusual results. Basically, R-MDMA, we were able to go to high doses of it, right? Because we didn't have a stimulant on board, so we could go to 225 milligrams of R-MDMA.
If you think about it, when you give the racemate, it's about 150 milligrams, so it's only 75 milligrams of R-MDMA. You can't get to - I mean, 450 milligrams of MDMA would be a pretty devastating dose. So, what we found was that it had a very different profile than anticipated. It had certain psychedelic elements to it.
Mm.
It had preserved some of the entactogenic characteristics of-
Mm
... MDMA, but it was really neither. So we spent some time just thinking through where we could take that and what indications we could go after. There were interesting data around emotional breakthrough inventory. There were some measures of self-compassion. There were a lot of other measures that we looked at, and then we lined it up against indications and also against commercial unmet need, right? And so, you know, social anxiety disorder emerged and moved to the top of the list. It's a place where there haven't been any new developments in decades, right? So the last approval, I think, was in two thousand and three with an SNRI. But nonetheless, it's an indication where it's become much more prominent, particularly with COVID, right?
So COVID really kind of, there was a lot of lay press around social anxiety disorder that came out, particularly in kids.
Mm.
I have kids that were in high school at that time, and I can attest to the fact that it was very impactful going into high school and losing those years of socialization and having the impact on, you know, how they kind of interacted with those kids. So again, something that's pretty prominent, not much competitive pressure at the moment. A lot of reasons we think this could be really interesting. So kicking off a phase two trial with this later this year, and again, kind of the same timeline as the VLS-01 trial, so readout around the end of next year.
Very well. Okay, two programs very in parallel, different indications and different mechanisms of action.
Mm-hmm.
can move on to the BPL-003. This was in a partnership with Beckley-
Mm-hmm.
Psytech, which is yours now,
Partially at least, yeah.
There's a stake in it.
Yeah.
Um, of, of-
Around about a third, and we have additional, more infrastructure in place that could get us closer to 50%, kind of a ROFR/ROFN concept that allows us to kind of grow more closely together if we continue to like the data that is coming out of their trials.
Can you tell us a little bit more about those trials and your interest in that program?
Sure, so it's very much in line with what we discussed around Spravato and VLS-01. We're really much intrigued in that commercial paradigm, very much scalable. We are all about kind of increasing accessibility and scale of these type of therapies, and their formulation is very much in line with our VLS-01 formulation.
Yeah.
If you look at the PK/PD curves, they pretty much are-
On top of each other.
... very, very, very similar. So very much pleased by their results, and also by preliminary efficacy data that they have reported out. There was a phase IIa study, open label, in March, I believe, this year-
Yeah
... released, which kind of, in our view, increases the pretest probability for the larger trial that is currently going on in TRD. What was remarkable then was that based on a single dose, you reached small, small set of patients-
Yeah
... admittedly, open label, but you really achieved out to three months of durability. So, that was definitely very encouraging for us. Waiting now for the data of the larger trial in TRD patients. And wanted to also don't rock the boat. As kind of explains the deal structure. We really like the team over there. I think they have a phenomenal group of people there, also very much mission aligned with us and we're in full swing kind of doing the trials. So we found a good setup that satisfies our kind of risk/reward appetite for that trial, and gives us a lot of optionality.
Can you give us just a little bit more detail on the status of the trial that?
Yeah
... the II- B trial, and is the data on track for later this year?
So the II-B trial is very similar to Compass' phase II-B. So it's two doses plus a sub-perceptual dose that's functionally the placebo. So Compass had 25 milligrams, 10, and 1. This one has 12, 8, and 0.3 milligrams. This is intranasal transmucosal, so single administration of the compound. Primary is at four weeks, and then there's a double-blind placebo-controlled well, active control out to eight weeks, and then there's an open-label beyond it. So you get, you know, the durability data, you get the dose ranging, et cetera, that'll be very useful, you know, for subsequent development. This trial will complete enrollment by the end of this year, and then obviously-
Okay
... readout will be subsequent to that, by a couple of months.
Okay. So early, did you guide already when we could expect that program?
Still some jitter on the timing, so yeah, you know-
Guided on enrollment-
Yeah, mm-hmm
... by end of this year. Very well. Moving on to your next program, RL-007. Can you tell us more about it? This one is. It's not a psychoactive compound.
It's not a psychedelic.
Yeah.
It's not a psychedelic.
Not a psychedelic. And so a different mechanism of action, and so why, why are you working on it?
You know, when we started at Atai, there was certainly a broader mandate around, you know, compounds that are psychedelic as well as non-psychedelic. And this is one of those compounds. Cognitive impairment in schizophrenia is a big unmet medical need. Essentially, everyone with schizophrenia does have cognitive impairment. It just depends on where you were supposed to be, if you will. Right? So if your, you know, IQ is supposed to be around a hundred and fifty, and you lost two standard deviations, you're still doing pretty well. However, if you were at, you know, like a hundred, which is average, and then you're taken down by two standard deviations, now you're down to eighty-
Hmm
... and you're impaired, right? So that's how to think about this. So it's impactful about, for about 85% of individuals with schizophrenia. It is one of the major drivers of the disability.
Mm-hmm.
So you think of schizophrenia, you think of, you know, the hallucinations, the positive, you know, the positive symptoms, the voices in your head. Those you can mostly get under control, to the point that at least the patient has a sense that it's, you know, it's, you know, it's not coming from outside, it's just literally a voice in their head, and, you know, they, they have insight into what's going on. The problem is the negative symptoms as well as the cognitive impairment. So anything we can do to improve on that, particularly if also combined with some form of occupational therapy, hopefully you can get some of these folks out of, you know, boarding care facilities and into, you know, being more productive and, you know, having a better life, essentially. So that's really the objective with that compound.
Right. So CIAS, that's the indication.
Yeah, cognitive.
And-
Yep
... the cognitive part there, so there's really nothing in that. So-
There is nothing.
... diagnosis is poor. These people are affected, and it leads to anxiety and depression as well, not just social-
Yeah, these folks are-
Social and-
They have a hard time.
... and cognitively, so exactly how are you framing what is the status of the program, and what's your clinical development plan here?
Yeah, so the trial, the compound's in phase II-B right now. So that's a 234-patient study currently, and we're anticipating top line in the middle of next year. So yes, this is obviously very different. This is one of those compounds that is in an area, in a therapeutic area, where there's lots of pharma interest. This has always been an area of significant interest because it is hard to treat, and there's nothing there for it, and it's so impactful and so expensive. Both, you know, it's impactful on a personal level as well as a societal level. So lots of interest there, and, you know, again, this one is one that we probably wouldn't take much further.
I mean, we've always had this vision of, certainly with the psychedelics, that we could move them-
Mm-hmm
... into a commercial setting ourselves 'cause, I mean, it, you know, with the five thousand clinics, et cetera, with Spravato, that's tractable commercially. It's a smaller sales force. You could get it out there. This one would be a bigger lift, but it's more the purview of a larger kind of thing, potentially.
It's interesting. I mean, it's that we're-I guess we are associated with psychedelics, but actually, one of our most mature and advanced programs is in the non-psychedelic with a non-psychedelic compounds, so very much excited about that one. I think the similarity or commonality to here or other programs is there's strong prior clinical evidence.
Yeah.
But in this case, this is a pro-cognitive compound.
Uh-huh.
So there's that kind of what we generally use for our pipeline to de-risk it, is like looking at some signals of efficacy in the indications that we are developing them for, and that's kind of the yeah, commonality here, even though it's a non-psychedelic.
So the partnership could provide some revenue to support your wholly owned programs?
Potentially, right. Yeah, we had one of our previous, I guess, in terms of value capturing, we struck a partnership with Otsuka in the past.
Mm.
Something like that is definitely what we are continuing to be open to discuss with our pipeline assets, yeah.
Are there any other programs that we should discuss in the next few minutes?
We can briefly touch on IBX-210, so Ibogaine, another psychedelic compound, developing it for substance use disorder, particularly opioid use disorder. Ibogaine is a bit more of a challenging compound compared to the other psychedelics. It has a known cardiovascular toxicity. It's got some other, you know, CNS effects that are, you know, ataxia and things that are a bit more problematic compared to psilocybin, DMT, et cetera. It's usually exclusively dosed orally, and we did a phase I trial and looked at that. We wanted to understand the impact of dose versus cardiovascular liabilities, et cetera. Where we netted out was that, A, it was much more variable than we had hoped, the pharmacokinetics. The variability was not easily understood based on, for example, liver enzyme polymorphisms.
And then the cardiovascular impact, the QT prolongation was pretty long, you know, of long duration. And what we learned along the way is that, you know, apparently, there's a Two-Midnight Rule. So if a subject has to be monitored for a particular therapy more than two midnights, in other words, longer than 48 hours, it's inpatient, and then there's a different reimbursement structure versus something that is within the 48 hours. So that had a big impact on this, the commercial viability of this asset. So the way to address all of this, potentially, based on modeling that we've conducted, is through IV administration. So we had to retrench a little bit on this one.
Mm-hmm.
So we are, you know, we had to go back, reformulate, and now moving that forward into a phase I/II-A. So, with successful phase I results, you know, hopefully we'll get a shorter duration. We'll have a shorter duration of psychedelic effects, potentially, but also a shorter duration of cardiovascular impact. We'll have less, much less variability, so more stability in terms of all these effects. And ideally, we'll be able to get under that Two-Midnight Rule, and, you know, that will, again, be something that we'd be very, very excited to move forward into phase II.
Are there any questions from the audience? We may have time for one. Otherwise, would you like to make any remarks to what investors might be missing on the Atai story?
I think we covered it here and there, but maybe to reiterate, I think two homegrown, quote-unquote, programs are now about to be in a phase II and awaiting readouts, phase II readouts by end of year next year.
Mm-hmm.
So that is coming up very quickly. I'm very excited for that. Again, you mentioned pharmacologically differentiated and addressing significant unmet needs. With VLS and BPL, we have two compounds that really fit in nicely into that Spravato model, that we continue to be excited out about, and get even more excited to kind of watching the sales and revenue numbers. And you mentioned also the clinic infrastructure, that we can leverage the more than or around 5,000 clinics that are now used to and underwent the REMS program for Spravato. So that is very encouraging to us. Then we still maintain an exposure in Compass. We were one of the very earliest investors in that company.
There's readouts coming up there that we're excited about, and that gives us also flexibility in addition to our cash position, to kind of manage our runway. Lastly, we just touched upon RL-007, so even though we are associated with psychedelics very much, there's a very interesting program underway for a patient population that also hasn't really... well, really no options currently to treat their cognitive impairment. And we have a very compelling, interesting compound that is de-risk, has shown a lot of also clinically pro-cognitive effects, so which is coming up in mid-2025, so mid-next year, in the phase II-B results.
Sounds great. Thank you so much for sharing that overview with us. Srini Rao, Florian Brand, Atai, thank you.
Thank you.
Thank you.