Atai Moves Forward With Studies With Solid Cash Position

Atai Life Sciences (NASDAQ: ATAI) reported its second quarter 2023 financial results and provided corporate updates. At this time Atai has no revenue to report. Atai did report a net loss of $33.1 million for the quarter (including non-cash share-based compensation expense of $8.8 million). This was slightly lower than last year’s net loss of $36.6 million for the same time period.

The company said it had cash, cash equivalents, and short-term investments totaling $227.5 million as of June 30, 2023 versus $273.1 million at the end of 2022. Atai attributed the decrease of $45.6 million to net cash used in operating activities of $43.7 million and $3.0 million of loans to related parties. The company said it expects its cash position and committed term loan funding will be sufficient to fund operations into the first half of 2026.

“We continue to focus on our vision to heal mental health disorders so that everyone, everywhere can live a more fulfilled life,” said Florian Brand, CEO and Co-Founder of atai. “Looking ahead to the second half of 2023 and beyond, we believe we are well-positioned to continue advancing our key clinical programs. We are especially encouraged by the progress our team has made in advancing RL-007 in the on-going randomized, placebo-controlled Phase 2b study as well as further evaluating VLS-01 in Part 3 of the on-going Phase 1 study. Today, we are pleased to report data from the Phase 1 trial of DMX-1002 (Ibogaine).”

“Current treatment options for Opioid Use Disorder (OUD) patients are not highly effective, with approximately 75% of patients undergoing therapy experiencing relapse within one year,” said Srinivas Rao, CSO and Co-Founder. “DMX-1002 has the potential to be a disease modifying treatment for this vulnerable patient population seeking to end their intractable cycle of drug dependence.”

Expenses

Atai reported that its research and development expenses for the quarter were $15.5 million, including $3.3 million of stock-based compensation compared to $17.9 million, including $3.9 million of stock-based compensation for the same quarter in 2022. The decrease of $2.4 million was primarily attributable to a $1.8 million decrease in costs related to its non-clinical activities and a $0.6 million decrease in contract research organization expenses.

The general and administrative expenses were $16.6 million, including $5.4 million of stock-based compensation for the quarter versus $17.2 million, including $5.7 million of stock-based compensation for the same quarter in 2022. The decrease of $0.6 million was largely attributable to a decrease of $0.4 million in personnel-related costs and a $0.2 million net decrease in public company administrative costs.

Ibogaine Test

Atai released the results from its Phase 1 study of DMX-1002 (ibogaine), a cholinergic, glutamatergic, and monoaminergic receptor modulator being developed for the treatment of OUD. It was a relatively small test with only 20 participants that mostly tested tolerability.

The results of the Phase 1 trial demonstrated that oral doses of DMX-1002 at 9 mg/kg achieved plasma concentrations in line with those described in previous studies in which subjects reported psychedelic experiences and obtained therapeutic benefits in OUD.

“The results from this trial are consistent with the known side-effect profile of ibogaine, the active moiety in DMX-1002,” said Dr. Marek Malik, Professor Emeritus of Cardiac Electrophysiology, Imperial College, London and clinical advisor for the DMX-1002 development program. “Ibogaine is known to cause prolongation of the electrocardiographic QT interval. Drug-induced prolongation of the QT interval is a phenomenon that has been, with many but not all drugs, associated with cardiac arrhythmias. The QT-related side effect of ibogaine is anticipated to be manageable in a controlled setting with appropriate cardiac monitoring and safety protocols. In severe patient populations, like those living with OUD, ibogaine treatment administered in such a setting can potentially be a paradigm shift for patients.”

During the study, there were two patients that experienced QT prolongation. Atai said it worked with cardiology experts who concluded that while QT prolongation of this order is a clinical risk, monitoring can help mitigate the risk to ensure the safety of patients, especially in a medical setting. The benefit of the drug will need to be defined in efficacy trials and will need to be weighed against the risks that have been defined.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


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