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Atai Life Sciences: The Next Unicorn Of The Psychedelics Sector

Nov 24, 2020 • 7:22 AM EST
3 MIN READ  •  By Michael Berger
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ATAI Life Sciences is considered to be a leading player in the psychedelic therapy sector after it closed a $125 million funding round that included a handful of strategic investors. We believe the size of the raise and the types of the investors that were involved with the financing add additional credibility to the emerging industry and want to highlight the recent development.

ATAI Life Sciences is a drug development platform that was structured to acquire, incubate and develop psychedelics and other drugs that can be used to treat depression, anxiety, addiction and other mental health conditions. Some of the investors that were involved with the financing round include Peter Thiel, Apeiron Investment Group, Catalio Capital Management, Future Ventures, Galaxy Investment Partners, Falcon Edge Capital, and Pura Vida.

In 2018, ATAI was founded and has raised $210 million since then. In the recent financing, Thiel made a $12 million investment in the drug development platform and this is not his first foray in the psychedelic therapy sector. From cannabis to data aggregation, Theil has proved to be a strategic investor in several of the largest companies in the world.

Currently, ATAI has partnered with around 10 drug development companies and we are favorable on the structure of the operation. The company receives majority ownership interests in drugs that are being developed by these partners and in return, it provides support on the fundraising, regulatory, and clinical trial sides of the business.

ATAI stated that it plans to use the capital to fund the clinical development of drugs that have already been backed by the business. The company said that the funding will also be used to identify new drugs and support their development. We are favorable on the opportunity for the business to execute on its pipelines of therapies that are being developed by its partners.

During the last year, several biotech companies that are focused on the development of psychedelic treatments have reported favorable clinical trial data. A few of these companies are in Phase 3 clinical trials with the US Food and Drug Administration (FDA) and positive data from these studies would prove to be a gamechanger for the psychedelic therapy sector.

According to the World Health Organization, almost one billion people suffer from mental health problems. The agency said that many of these people suffer from treatment resistant depression and we believe that psychedelic therapies can prove to be a potential treatment for many of these individuals.

Some of the recent clinical studies have suggested that psychedelic therapies could help patients with a number of mental illnesses, either in combination with traditional solutions or in cases where nothing else has proven to be effective. Going forward, we believe that companies like ATAI will benefit from the increased focus on the sector.

Next year, ATAI expects to go public at a valuation that is between $1 and $2 billion. If the company is able to pull this off, it would further validate the emerging industry and this is an opportunity that we will continue to follow.

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Authored By

Michael Berger

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