Atai Life Sciences Maintains Runway, Questions Remain

Clinical-stage biopharmaceutical company atai Life Sciences (Nasdaq: ATAI) reported financial results for the third quarter ending Sept. 30, providing updates on its clinical trials looking at the treatment of depression using ketamine – particularly an at-home therapy for treatment-resistant depression.

“In addition to multiple study initiations this quarter, we have announced two positive clinical trial results, with more on the way,” CEO Florian Brand said in a news release. “We’re excited about the upcoming Phase 2a topline results of PCN-101 that could represent a meaningful shift in the current treatment paradigm for patients.”

atai’s operating use of cash was $28, in line with expectations, CFO Stephen Bardin said on a call with investors Thursday. The company’s debt facility worth $175 million with Hercules Capital, which it drew $15 million from during the quarter, as well as its $304.1 million cash position help stretch its cash runway into 2025.

R&D costs totaled $19 million versus $13.4 million in the prior year. General and administrative expenses were $19.4 million versus $20.3 million last year. Net loss was $33.9 million versus $31.2 million during the same time last year.

In the investor call, Brand said that Phase 2a study for its PCN-101 ketamine drug to treat depression is about testing “whether we have a greater therapeutic index compared to other approved treatment options.”

Without getting into details, he said, “Regarding specific thresholds, efficacy of a single dose below what is considered clinically meaningful would certainly lead to us reassessing the current clinical development plan in treatment-resistant depression.”

But, he added, “Based on all the existing preclinical and clinical data that we have from third parties and internally studying our ketamine, we remain very confident to achieve … trial objectives from this specific Phase 2A.”

Srinivas Rao, co-founder and chief scientific officer, noted that the trial is about testing the first study’s hypothesis confirming that “we will have a therapeutic index,” he said.

Jefferies analyst Andrew Tsai asked whether or not BioGen’s drug to treat cognitive impairment associated with schizophrenia (CIAS) failing in studies earlier this year shakes atai’s confidence in embarking on a Phase 2b trial for its RL-007 drug looking at CIAS, which the company plans on initiating by end of this year with results expected in the first half of 2024.

Rao said the “challenging indication” is also part of its appeal.

“Obviously theres a huge medical need here,” he said, noting the societal and personal costs of struggling with the mental health disorder. “In terms of biomarker data, I don’t recall seeing anything published on that, personally. So, it will be interesting to get a better read sense of that or even get a more granular read on the results that they have.”

Brand concluded the call as Tsai attempted to follow up.

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