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Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, The Canberra Times, and… Read more
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Published: 11:28 16 May 2024 EDT
atai Life Sciences (NASDAQ:ATAI, ETR:9VC) has a pipeline of psychedelic and non-psychedelic drug assets that are poised to create value, analysts at Jefferies believe.
“We think atai’s pipeline of psychedelics (and non-psychedelics) could safely, profoundly, and durably treat tough $1 billion-plus in central nervous system indications,” they wrote in a note to clients.
The analysts have a ‘Buy’ rating on the stock and a $6 price, representing an upside of 214% from atai’s share price at the time of writing of $1.91.
“To us, atai stock is cheap and first quarter cash of $125 million provides runway into 2025 and beyond, based on our estimates,” they wrote.
They believe continued positive industry developments support their view that psychedelics should gain mindshare.
Lykos Therapeutics’ racemic MDMA could soon become the first psychedelic-assisted therapy approved by the US Food and Drug Administration (FDA) for PTSD, they noted.
Lykos’ therapy will come before the FDA’s Psychopharmacologic Drugs Advisory Committee on June 4.
“We are hopeful for a positive outcome, which could bode well for the entire space,” the analysts wrote.
Other “big picture” developments include Big Pharma validation demonstrated by Abbvie striking a $2 billion deal with Gilgamesh for next-gen neuroplastogens, Johnson & Johnson (NYSE:JNJ)’s Spravato therapy for treatment depression achieving an annualized $900 million-plus run rate and more assets receiving therapy designations from the FDA.
“To us, the fundamental tailwinds are in place, so the key is for atai to generative positive placebo-controlled data in actual patients,” they wrote.
Clinical trial readouts are also expected to be positive catalysts for atai, specifically data from COMPASS Pathways’ Phase 3 trial of a single dose of its proprietary psilocybin therapy COMP360 in treatment-resistant depression. atai holds a 14% stake in Compass.
“Ultimately, COMP360’s benefit/risk profile seems favorably skewed,” they wrote. “We are interested in seeing durability after a single dose, which has implications to re-dosing, pricing and peak sales.”
Beckley Psytech, in which atai holds a 35.5% stake, is due to release results from its Phase 2b study of its intranasal 5-MeO-DMT therapy BLP-003 in treatment-resistant depression in the second half of 2024.
“For BLP-003, we think a breakthrough therapy designation is possible post Phase 2b data,” the Jefferies analysts believe.
They also noted that atai has the optionality to meaningfully increase its stake in Beckley Psytech.
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atai Life Sciences (NASDAQ:ATAI, ETR:9VC) co-founder and CEO Florian Brand takes Proactive's Stephen Gunnion through the significant advancements the company made in 2023 in developing innovative mental health therapies, particularly focusing on psychedelic-based treatments for…
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atai Life Sciences poised to create value as psychedelic therapies gain traction, analysts believe – Proactive Investors USA
