Psychedelic drug development firm atai Life Sciences (NASDAQ:ATAI) is investing $50 million in UK-based Beckley Psytech as part of a collaboration that gives the company exposure to a Phase 2 psychedelic drug candidate.
The investment will give the Berlin-headquartered company a 35.5% stake.
Beckley’s two main clinical programs are an intranasal treatment for treatment-resistant depression (TRD) and alcohol use disorder (AUD) – both based on a compound similar to that excreted by the Colorado River toad, as well as an intravenous treatment for major depressive disorder (MDD) using the hallucinogen psilocin, related to psilocybin.
The TRD treatment, BPL-003, is part of a Phase 2b study with a readout expected in the second half of 2024. The MDD treatment, ELE-01, is being investigated in a Phase 1/2a study which is expected to deliver topline results in the first half of the year.
Analysts at Jefferies are bullish on the move by atai.
“We think the two programs help bolster ATAI's [central nervous system] pipeline, and their datasets in actual patients (vs healthies) should create a steady cadence of 2024 catalysts for ATAI stock,” the analysts wrote.
“A 35.5% stake in Beckley Psytech (valued at $50 million) for two psychedelics with potentially differentiated properties (namely a short-acting <2hr duration for real-world convenience) helps ATAI scale its overall CNS pipeline as well as diversify risk.”
Jefferies has a $6 price target for atai. Shares of the company climbed 15% Thursday afternoon to $1.73.