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Atai Life Sciences Is Setting The Stage For The Largest IPO The Psychedelics Sector Has Seen To Date

Jun 15, 2021 • 7:43 AM EDT
2 MIN READ  •  By Michael Berger
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Although cryptocurrencies are frequently the main topic of discussion on major financial media platforms as one of the most attractive growth markets, we believe the psychedelic therapy sector is equally attractive and a much less crowded industry. 

We believe that ATAI Life Sciences is a leading psychedelic therapy company and the business is backed by Peter Theil who is a high-profile investor that is considered to be smart money. The Germany-based biopharmaceutical company is focused on mental health disorders and recently announced plans to raise up to $214.3 million and be valued at up to $2.28 billion.

Less than a week ago, ATAI reported to be offering 14.29 million shares in an initial public offering (IPO). The company expects the IPO shares to be price between $15 and $17 per share and we will monitor how the offering is received by Wall Street. The psychedelic therapy company has hired high-profile financial institutions to be the underwriters and the group includes Credit Suisse, Citigroup, Cowen and Berenberg.

In 2020, ATAI reported a net loss of $169.8 million on no revenue. Although this amount is significant higher than the $24.1 million net loss that was reported in 2019, biotech companies tend to not generate revenue for years. Once a biotech company brings a therapy to market, the business starts to generate revenue and we expect ATAI to follow a similar path. 

When compared to other psychedelic therapy companies, we believe that ATAI represents a high quality differentiated opportunity and is an opportunity to be aware of. The company has partnered with 14 companies that are focused on drug development and other technologies. 

As part of the operating structure, ATAI receives a majority ownership stake from the therapies and technologies that it partners with. In return, the company helps its partners with raising capital, working with the regulators, and conducting clinical trials. ATAI describes itself as a drug development platform that was formed to acquire, incubate and develop psychedelics and other drugs that can be used to treat depression, anxiety, addiction and other mental health conditions.

We are favorable on the structure of the business, the types of investors that are backing the deal, and the strength of the managements team. We consider these factors to play an important role in the long-term success of any company and believe that ATAI represents a unique growth opportunity. 

If you are interested in learning more about ATAI Life Sciences, please send an email to support@technical420.com with the subject “ATAI Life Sciences” to be added to our distribution list. 

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Michael Berger

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