Atai Life Sciences (NASDAQ: ATAI) had little revenue to report in its third quarter 2023 financial results, as the company as is still building its drug portfolio.
Atai did report that it had a net income of $44.2 million, but that was achieved through a $69 million non-cash change in fair value of other investments related to an accounting method change on the company’s Compass Pathways plc investment. The company also recorded an $8.3 million non-cash share-based compensation expense. Last year’s third quarter saw a net loss of $33.9 million.
Still, Atai is sitting on a comfortable cash cushion of $209 million, compared with $273.1 million at the end of 2022. The decrease of $64.1 million was primarily driven by net cash used in operating activities of $62.2 million and $5.2 million of funding in strategic investments, offset by $0.7 million proceeds from the sale of investment and exercise of stock options.
Atai said that it expects its cash position and committed term loan funding will be sufficient to fund operations into the first half of 2026. However, it continues to have an accumulated deficit of $532.6 million.
“As the burden of unmet medical needs in mental health care continues to grow, our team remains highly focused on pioneering the development of innovative neuropsychiatric treatments,” said Florian Brand, CEO and co-founder. “With a strong cash balance of $209 million, we are well positioned to continue advancing our clinical programs towards key data milestones, including the Phase 2b readout of RL-007 expected in the second half of 2024.”
Despite the comfortable cash positive, Atai has been aggressively cutting costs. This quarter’s research and development expenses were $13.3 million versus last year’s $19 million.
“The decrease of $5.7 million was primarily attributable to a $3.2 million decrease of costs in our clinical programs, $1.6 million decrease of costs related to our non-clinical activities and $0.9 million decrease in personnel expenses,” the company said in a statement.
In addition to R&D cuts, general and administrative expenses also fell to $13.6 million versus last year’s $19.4 million. The cuts were achieved through a decrease of $2.8 million in personnel-related costs and $1.8 million decrease in public company related administrative costs.
Last month, the company reported positive Phase 1 results from its VLS-01 study.
“Next to our steady clinical progress, we are encouraged by our team’s preclinical and drug discovery work, such as on EGX-A and EGX-B, that demonstrate our holistic drug development capabilities and commitment to groundbreaking mental health innovation,” Brand said.