atai Life Sciences (NASDAQ:ATAI) shares moved more than 13% higher Tuesday after the company reported positive findings from its early-stage study of EMP-01, Atai’s R-isomer of MDMA.
The company said that EMP-01 was well tolerated and treatment-related adverse events were expected and largely dose-related in healthy volunteers.
It reported that EMP-01 was demonstrated to be dose-proportional based on subjective reports and blood-based biomarkers.
The drug also resulted in a differentiated subjective experience compared to racemic MDMA, which Atai said meant it likely had therapeutic applications.
Detailed data from the Phase 1 study is expected to be presented at a medical meeting in the future, Atai said.
Following the news, analysts at Jefferies wrote in a note to clients that they could see Atai advancing EMP-01 into Phase 2 trials for central nervous system (CNS) indications like post-traumatic stress disorder (PTSD).
They wrote that oral EMP-01 is the right isomer of MDMA (R-MDMA) that could have an improved therapeutic index over racemic MDMA.
“Traditional MDMA has anxiogenic-like (anxiety-inducing) and hyperthermic (increased body temperature) properties, so the goal is to see whether EMP-01 can remove those effects to yield better safety (particularly cardiovascular) - which in turn may drive better efficacy,” they wrote.
“Importantly, EMP-01 is proprietary (patented) and will not need to rely on five-year new chemical entity exclusivity (if approved).”
They noted that Atai continues to make progress across its pipeline of psychedelic and non-psychedelic therapies for hard-to-treat CNS indications.
“Atai stock currently trades below $50M enterprise value (the company has $200M-plus cash), so we look forward to the next set of readouts in 2024, including (1) additional Phase 1 DMT data around mid-2024 (eventually for treatment-resistant depression), and (2) Phase 2 cognitive impairment associated with schizophrenia data of RL-007 in the second half of 2024 (non-psychedelic pro-cognitive neuromodulator),” they wrote.
“In our view, the key stock driver for Atai is to produce compelling placebo-controlled efficacy data in actual patients (versus healthiest).”
Looking at the “big picture,” the analysts wrote that the psychedelic landscape was evolving favorably.
“Notably, racemic MDMA could become the first psychedelic-assisted therapy by 2024 year-end or early 2025 (for PTSD),” they highlighted.
“We also look forward to pivotal Phase 3 data COMP360 (single-dose psilocybin) in summer 2024 (Atai holds a 16% stake in Compass Pathways (NASDAQ:CMPS)), where (positive) data could further reinforce the notion psychedelics can profoundly, safely and durably treat CNS disorders.”
Atai shares gained 13.5% on the news to US$1.60 in early trade on Tuesday.