Atai Life Sciences is among the better-capitalized biotechs, ending June with $312 million left over from its private rounds and IPO. But the mental health player has still joined the growing list of companies trimming their pipelines and taking on debt to keep priority programs moving forward.
After reviewing its pipeline, Atai has settled on eight programs that it still wants to prioritize. The list is missing three programs that featured on Atai’s pipeline prior to the review, namely mild traumatic brain injury candidate NN-101, treatment-resistant depression prospect RLS-01 and opioid use disorder asset DMX-1001.
The programs are in development at startups that Atai either partnered with or helped set up. Atai will meet its existing funding obligations to the programs but after that will turn off the financial faucet and “opportunistically explore business development and partnering opportunities” for the programs. The actions will affect Neuronasal, Revixia Life Sciences and DemeRx NB.
Atai jointly formed DemeRx NB with DemeRx in 2019 to support the development of noribogaine, an active metabolite of ibogaine that is designed to have a longer plasma half-life and potentially reduced hallucinogenic effects compared to its parent compound. DemeRx NB pitched the preclinical-stage DMX-1001 as an at-home OUD maintenance therapy. Atai continues to back DemeRx IB’s ibogaine.
Shortly after forming DemeRx NB, Atai partnered with Neuronasal to develop a short-term treatment for mild traumatic brain injury. Neuronasal is using nose-to-brain delivery to get N-acetylcysteine to targets but will now suffer from the withdrawal of Atai’s support.
Atai only signed up to back the third deprioritized program a year ago. Back then, the biotech created a wholly owned subsidiary, Revixia, to develop salvinorin A to treat mental health disorders, reflecting evidence that the molecule has a shorter psychedelic effect than other compounds. The resulting asset, RLS-01, is absent from the list of Atai’s prioritized programs. Salvinorin A is Revixia’s only disclosed asset.
In conjunction with the cuts, Atai disclosed a $175 million loan facility from Hercules Capital. Atai drew $15 million at closing and has the option to draw a further $45 million, split across two tranches, next year. The biotech will gain access to the remaining $115 million in tranches through March 2025.
Atai expects the loan facility and pipeline prioritization to give it an additional year of runway, taking it into 2025. The money will support a slimmed-down pipeline that features late-phase psilocybin therapy COMP360, ketamine isomer PCN-101 and neuromodulator RL-007.