Atai Life Sciences (Nasdaq: ATAI) posted a $39 million net loss for the fourth quarter of 2024 but announced Monday that it boosted its financial position with a recent equity offering that extends its operational runway into 2027.

The clinical-stage company, which mainly focuses on developing psychedelic-based treatments for mental health conditions, reported that it raised $59.2 million in net proceeds from an equity offering completed last month. Atai said the cash infusion will carry its operations beyond anticipated readouts from two key Phase 2 clinical trials, which are expected in early 2026.

“We are beginning the year in a strong financial position, thanks to the recent capital raise, which extends our runway into 2027, beyond when we expect the topline data readouts from the Phase 2 clinical trials of our two core programs, VLS-01 and EMP-01, in Q1’26,” CEO and co-founder Srinivas Rao said in a statement.

The company reported a wider net loss of $39 million for the fourth quarter that ended Dec. 31, 2024, versus to $18.3 million in the same period the previous year. For the full year 2024, Atai posted a net loss of $149.3 million, versus $40.2 million in 2023, with the difference partly attributed to non-cash decreases in fair value of assets and liabilities.

As of Dec. 31, Atai had cash, cash equivalents, restricted cash and short-term securities of $72.3 million, down from $154.2 million at the end of 2023. The company said the decrease was primarily driven by $82.4 million in cash used for operations and $15 million invested in Beckley Psytech. It was partially offset by proceeds from the partial sale of its holdings in Compass Pathways.

Despite the losses, Atai highlighted progress in its clinical pipeline, including dosing the first patient in its Phase 2 Elumina trial testing VLS-01, a buccal film formulation of DMT (dimethyltryptamine), for treatment-resistant depression. The company also initiated a Phase 2 trial of EMP-01, an oral formulation of R-MDMA, for social anxiety disorder.

Both trials are anticipated to deliver topline results in the first quarter of 2026, according to the company.

“Our team is focused on executing these trials rigorously and efficiently to drive forward our mission to transform patient outcomes in mental health,” Rao added.

The company also noted that Beckley Psytech, in which Atai has a strategic investment, recently completed enrollment in its Phase 2b study of BPL-003, an intranasal mebufotenin benzoate treatment for treatment-resistant depression, with results expected by mid-2025.

Research and development expenses for 2024 decreased to $55.5 million from $62.2 million in 2023, though the company expects these costs to rise as its programs advance into later-stage clinical trials. General and administrative expenses also decreased to $47.5 million from $63.6 million, primarily due to reductions in personnel-related expenses.

Atai Life Sciences (NASDAQ: ATAI) announced after the markets closed on Wednesday that it priced a registered underwritten offering to raise approximately $55 million. Shares rose 14% to close at $2.55 on Wednesday. In a statement, Atai said the offering consists of 26,190,477 common shares priced at $2.10 per share. 

The psychedelic drug company said it plans to use the net proceeds from this offering for general corporate purposes, including working capital, and to advance the clinical development of its product candidates and programs. 

The offering is expected to close on Feb. 14. It also granted the underwriter a 30-day option to purchase an additional 3,928,571 common shares.

Executive moves

In January, Atai announced that Co-CEO Srinivas Rao was named the sole CEO. There were additional appointments with Kevin Craig, M.D., named as chief medical officer, Glenn Short advanced to to chief scientific officer, and Gerd Kochendoerfer appointed as chief operating officer.

“We have strengthened our leadership team at a pivotal time as we advance VLS-01 and EMP-01 into Phase 2 clinical trials,” Rao said. “As we continue to focus on executing our Phase 2 clinical trials, with VLS-01 now screening patients, we look forward to the Phase 2b data readout for Beckley Psytech’s BPL-003, anticipated midyear. This is a key milestone and an important step towards the potential of commercially scalable short-duration psychedelic therapies for people with treatment-resistant depression.”

To that end, the company recently announced positive topline results from the Beckley Psytech Phase 2a open-label study of BPL-003 in 12 patients with moderate to severe alcohol use disorder.

“The results showed that a single dose of BPL-003, in combination with relapse prevention cognitive behavioral therapy, induced meaningful and sustained reduction in alcohol use and heavy drinking days (HDDs) in patients with moderate to severe AUD out to 12 weeks,” the company said in a statement. “These findings add to the growing body of evidence supporting the potential of BPL-003 in treating serious mental health disorders.”

Balance sheet

Atai last reported earnings in November when Green Market Report wrote that the company 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 at the time that it was well-positioned to bring multiple mental health drugs to market in the not-too-distant future.

At the end of September, Atai had $197.5 million in total assets, including $29.9 million in cash. The company noted in an investor presentation that it had enough cash to reach the milestones laid out through 2025.

Psychedelic drug treatment companies are racing to find a cure for alcohol use disorder or alcoholism. This week, atai Life Sciences gave investors an update on its DMT-based drug, while Awakn Life Sciences updated the market on its ketamine-based drug for the same disorder.

The World Health Organization estimates that around 400 million people suffer from AUD worldwide, with around 3 million deaths each year attributed to alcoholism. With such a large patient population, a solution would be a financial home run for these companies – not to mention the benefits to the patients.

Atai’s update

Atai Life Sciences (NASDAQ: ATAI) announced positive topline results from Beckley Psytech’s Phase 2a open-label study of BPL-003 in 12 patients with moderate to severe AUD. The company told investors that a single dose of BPL-003, combined with relapse prevention therapy, produced meaningful and sustained reductions in alcohol use, with 50% of patients maintaining complete abstinence out to three months. Atai said it expects to have the Phase 2b data readout of BPL-003 midyear.

“We are encouraged by these exploratory results from Beckley Psytech, our strategic investment, which demonstrate the potential of short in-clinic psychedelic therapies to transform the treatment of substance use disorders,” said Dr. Srinivas Rao, CEO and co-founder of atai. “The high rates of sustained abstinence in this study are particularly promising given the significant challenges patients with alcohol use disorder face in achieving and maintaining abstinence. These findings add to the growing body of evidence supporting the potential of BPL-003 in treating serious mental health disorders.”

Atai’s BPL-003 is a patent-protected synthetic intranasal formulation of 5-MeO-DMT benzoate which is designed to deliver rapid and durable treatment effects from a single dose with a short in-clinic treatment time.

Awakn’s update

Awakn Life Sciences Corp. (CSE: AWKN) (OTC Pink: AWKNF) has two drugs to treat AUD, designated as AWKN-001 and AWKN-002, and both use a ketamine base. AWKN-001 is in Phase 3 in the U.K. The company told investors it is targeting a Regulation 52b hybrid application in the U.K. for AWKN-001.

“If successful, this could provide 8 years of market exclusivity, with an additional 2 years of supplementary protection, preventing competitors from marketing a similar product for the same indication,” the company said in a statement.

Concerning AWKN-002, the company said it completed a Pre-Investigational New Drug (Pre-IND) meeting with the U.S. Food and Drug Administration, which confirmed that AWKN-002 can be reviewed under the 505(b)(2) NDA pathway. The FDA also further confirmed that no additional clinical data are needed to proceed with a Phase 2b trial in patients with moderate to severe AUD.

Awakn said in a statement that it plans to submit an IND Application for AWKN-002 in the second half of 2025, followed by a Clinical Trial Application for a Phase 2b trial in the first half of 2026. If all goes well, the company will have market exclusivity for five years.

“We are excited about the progress across our key R&D programs, particularly in the areas of Alcohol Use Disorder and PTSD. With the advancements we’ve made in AWKN-001 and AWKN-002, we’re on track to deliver transformative therapies for patients in need of more effective solutions,” Anthony Tennyson, CEO of Awakn said.

Green Market Report wrote in December that Awakn would be bought by Graft Polymer (UK) PLC with Graft acquiring all of the company’s shares in a deal valued at C$8.8 million. That deal is expected to close in the summer of 2025.