Positive data from Irish biotechnology firm GH Research’s Phase 2 trial of GH001, an inhalation formulation of synthetic mebufotenin (5-MeO-DMT), in treatment-resistant depression bodes well for atai Life Sciences (NASDAQ:ATAI, ETR:9VC)’ own psychedelic, analysts at Jefferies believe.
Jefferies repeated its ‘Buy’ rating on atai and awarded it a $5 price target. The stock traded 14.3% higher at US$1.77 in the early afternoon on Monday, boosted by GH Research’s results.
GH Research’s trial results showed their drug led to an “ultra-rapid anti-depressant effect” with a negative 15.5 point placebo adjusted benefit at the eight-day primary endpoint. This translates to a 57.5% remission rate, compared to 0% for placebo.
Analysts believe this derisks atai’s randomized-controlled Phase 2b study of BPL-001 (intranasal 5-MeO-DMT) in treatment-resistant depression, from which data is expected in mid-2025.
The trial is being carried out by Beckley Psytech, in which atai has a 35.5% stake.
“We are keen on BPL-003, as its readout will mark the first time atai generates proof-of-concept data against a comparator (versus an open-label study) in actual patients,” analysts wrote in a note to clients.
With GH001 under a clinical hold in the US, they see BPL-003 potentially leapfrogging it to earn New Chemical Entity (NCE) exclusivity.
“Also, GH001 likely saw functional unblinding (the placebo arm barely moved), ran a short seven-day placebo-controlled study, and may need FDA buy-in on interim data reviews,” they wrote.
Analysts believe atai’s pipeline of psychedelic and non-psychdelic candidates could create value in the next six to 15 months.
In addition to BPL-003, they expect Phase 2 data readouts for RL-007 (oral GABA/nicotinic modulator) in mid-2025 for CIAS schizophrenia, VLS-01 (buccal film DMT) for treatment-resistant depression in the first quarter of 2026 and EMP-01 (oral R-MDMA) for social anxiety also in Q1 2026.