atai Life Sciences (NASDAQ:ATAI, ETR:9VC) is gaining momentum in the psychedelics space, with Jefferies analysts highlighting the company’s potential to leapfrog rival GH Research (NASDAQ:GHRS) and establish a leading position in the treatment-resistant depression (TRD) market with its intranasal 5-MeO-DMT candidate BPL-003.
The analysts maintain a ‘Buy’ rating and $7 price target on atai, about double the stock’s price at the time of writing.
Shares of atai traded up 6.5% at $3.76 in the early afternoon on Wednesday, having surged about 185% in the year to date.
Jefferies argues that atai has the chance to get ahead of GH Research and earn New Chemical Entity (NCE) exclusivity, a form of market protection granted by the US Food and Drug Administration to drug sponsors who develop and receive approval for a completely new, never-before-approved active ingredient, citing the more advanced regulatory status of BPL-003 compared to GHRS’s GH001.
GH001 remains under an FDA clinical hold as of July 2025 due to concerns requiring additional inhalation toxicology studies and device validation, while atai and its partner Beckley Psytech are moving forward with BPL-003, including the recent release of positive Phase 2b trial results.
The analysts highlighted the the company will be meeting with the FDA in the second half of the year to discuss its Phase 3 strategy, whereas GH Research may still need to get its clinical hold lifted.
atai’s asset has multiple advantages, the analysts believe. “We maintain that BPL-003 has produced one of the most differentiated psychedelic datasets, including single-dose efficacy durability, which has positive implications to sales,” they wrote.
atai’s trial design is more robust, featuring an 8-week blinded treatment phase followed by an 8-week open-label extension, compared to GHRS’s shorter 8-day blinded period and 6-month extension, the analysts added.
BPL-003 also benefits from a more precise intranasal delivery system using Aptar technology, the same platform used in Johnson & Johnson's FDA-approved esketamine nasal spray Spravato, whereas GH001 relies on a vaporized device requiring multiple breaths.
In terms of dosing, BPL-003 is potentially more practical, Jefferies wrote. GH001 allows up to five individual dosing regimens during the open-label phase, totaling as many as 15 doses, which would demand more frequent clinic visits. In contrast, BPL-003 is designed around a simpler single-dose model.
Looking ahead, atai plans to release new 8-week open-label extension data and two-dose induction results in Q3 2025, followed by a pivotal FDA meeting in the second half of the year.
Jefferies believes these milestones could support a breakthrough therapy designation from the FDA and enable initiation of a Phase 3 program in 2026.
“Ultimately, we think BPL-003 has best-in-class potential, supporting a $1 billion-plus opportunity in TRD,” the analysts concluded.