New York-based Atai Life Sciences (Nasdaq: ATAI) reported a net loss of $26.3 million for the third quarter, down year-over-year from its net income of $43.3 million, but the clinical-stage biopharmaceutical company also noted it’s well-positioned to bring multiple mental health drugs to market in the not-too-distant future.

Atai said in a release that it’s made progress toward obtaining federal approval on several psychedelic drugs, including its versions of DMT, MDMA, ibogaine and two other drugs still in development. All of the drugs are projected to hit testing milestones this year or next year, Atai forecast.

The company noted in an investor presentation that it believes it has enough cash to reach the milestones laid out through 2025.

“We continue to see progress and momentum across our pipeline,” Dr. Srinivas Rao, co-chief executive officer and co-founder of Atai, said in a release. “Our team is focused on executing these trials with the utmost scientific rigor and is driven by our goal of being the leader in developing new psychedelic treatment options to mental health patients.”

Rao said that Atai’s version of DMT, formally dubbed VLS-01 and designed to treat depression, along with its version of DMT, called EMP-01 and designed for social anxiety disorder, are both slated to begin clinical trials before the end of 2024.

This year, Atai also expects data on clinical trials for its drugs that are still in development to treat alcohol use disorder and major depressive disorder. Next year, it’s expecting even more data on other trials.

Atai also has preclinical studies planned for its version of ibogaine, with a plan in the works to submit a new drug application to the federal government and eventual clinical trials with patients.

The company is also researching possible psychedelic applications from “novel, non-hallucinogenic 5-HT2AR agonists,” which it said could be key to further antidepressant treatments, and the potential use of RL-007, an “orally bioavailable compound,” for treating schizophrenia, with ongoing clinical studies and data from those expected next year.

On Sept. 30, Atai closed on the acquisition of IntelGenX Technologies Corp., in an all-debt/equity deal that required zero cash. Atai “agreed that its senior secured debt in IntelGenx was discharged in exchange for IGX shares,” which completed the acquisition following the sign-off from a Canadian court. IntelGenX manufactures DMT and other products related to psychedelic medicines.

At the end of September, Atai had $197.5 million in total assets, including $29.9 million in cash, against $52.2 million in total liabilities.

Atai Life Sciences (NASDAQ: ATAI) announced its second-quarter 2024 financial results and provided corporate updates. The company has little revenue to report as it is in a drug discovery phase, but it did record license revenue of $273,000. Atai reported a net loss of $57.3 million which was higher than last year’s second-quarter net loss of $33.0 million.

Atai reported it had cash, cash equivalents, restricted cash and short-term securities of $103.3 million versus $154.2 million at the end of 2023. The company’s cash level dropped to just $19 million from $45 million at the end of 2023.

One notable expense for the second quarter was a $30.6 million reduction in the fair value of atai’s assets and liabilities, net. The company said it primarily consists of a $29.1 million reduction in investments held at fair value, a $7.5 million reduction in the fair value of related party notes receivable, and a $4.8 million decrease in the fair value of convertible note liability.

The company also acknowledged that its spending included $10 million for the Beckley Psytech investment and $3.9 million for funding strategic investments. Atai told investors that its cash along with a committed loan facility should see the company through 2026.

Expenses

The company said its research and development expenses were $12.6 million versus last year’s $15.5 million. The decline was due to a decrease of $1 million in program-specific expenses and $1.9 million in R&D personnel. Atai did say it is expecting R&D spending to increase as its R&D programs progress into later-stage clinical trials.

“Over the past quarter, we’ve made significant strides to advance our pipeline, with key updates from our VLS-01 and EMP-01 programs,” stated Dr. Srinivas Rao, Co-Chief Executive Officer and Co-founder of atai. “Our positive Phase 1b results for VLS-01 underscore its potential as a best-in-class oral treatment for patients suffering from treatment-resistant depression, and we look forward to initiating the Phase 2 study around year-end.

Clinical development plans for EMP-01 are advancing with a Phase 2 study in Social Anxiety Disorder (SAD) set to begin around year-end. This follows encouraging Phase 1 results, where EMP-01 demonstrated a unique subjective profile compared to racemic MDMA and classical psychedelics. With no novel molecules approved for SAD in over 20 years, it remains an area of critical unmet need.”

Drug Pipeline

Atai’s main drug compound is a DMT drug named VLS-01 for treatment-resistant depression (TRD). The company reported positive topline data from the Phase 1b trial of VLS-01 buccal film in 17 healthy participants.

“We’re delighted with the positive results from the VLS-01 Phase 1b study, which further support its potential as a promising therapeutic option for the 100 million people worldwide suffering from treatment-resistant depression,” said Rao. “In this trial, the 120mg dose was found to strike a balance between psychedelic effect intensity and safety as well as tolerability. These encouraging findings, if replicated in Phase 2, suggest that VLS-01 could become a best-in-class treatment for TRD, one that offers a well-tolerated, convenient oral dosing and a short psychedelic experience that fits into the two-hour in-clinic commercial paradigm established within interventional psychiatry.”

Atai said it expects to initiate a randomized, double-blind, placebo-controlled Phase 2 study to assess the safety, efficacy and durability of response of repeated doses of VLS-01 buccal film in patients with TRD around year-end 2024.

The company also has an MDMA drug EMP-01 that had a positive Phase 1 study. Atai said it expects a Phase 2 study to assess the safety, tolerability and efficacy of EMP-01 in adults with social anxiety disorder around year-end 2024.