It’s hard not to associate the word psychedelic with the trippy, tie-dyed hippy movement of the 1960s, or the dance scene of the 90s.
However, drugs such as ecstasy and magic mushrooms are now part of mainstream life sciences research and development with companies assessing their potential to tackle a range of mental health conditions from anxiety to addiction.
Last year the Food and Drug Administration approved esketamine to treat depression, making it the first-ever psychedelic drug to receive the regulatory green light in the US.
MDMA, meanwhile, has been given breakthrough therapy designation by the regulator for post-traumatic stress disorder, as has psilocybin, the psychoactive found in mushrooms, which is being developed as an alternative to traditional antidepressants.
Against this backdrop has emerged ATAI Life Sciences, which styles itself as a ‘biotech platform’ – which means it is home to a host of innovative drug research companies.
Its focus is not solely psychedelics, rather its remit is to find new alternatives for mental health disorders such as depression, anxiety and addiction where treatment hasn’t change in decades.
The vision of the founders was born from personal experience of mental health issues that are prevalent in society today but tend, because of their nature, not to be part of mainstream discourse.
Set up two years ago, it has attracted more than US$100mln in Series A and B funding that has brought in an impressive roster of early investors, including Peter Thiel, the co-founder of both PayPal and Palantir.
In fact, Thiel Capital’s chief medical officer, Jason Camm, has joined the board to help guide the company’s future development strategy.
ATAI’s approach is to take controlling stakes in emerging drug developers, providing the capital and the deep domain expertise via a shared services approach. This leaves scientists to do what they do best – create the best in class therapeutics.
It is a similar model to the one pioneered by PureTech Health or Bridgebio, “but with a focus on the mental health space”, said company spokesman, Allan Malievsky.
It is the leading shareholder in a company called Compass Pathways, which is pioneering a psilocybin therapy for treatment-resistant depression.
Having received a breakthrough therapy designation in 2018 from the US Food and Drug Administration (FDA), the drug is now undergoing a phase IIb safety and efficacy study in Europe and North America involving 216 people. The London-based group secured US$80m in its Series B fundraising round, bringing on board an impressive array of investors, including the investment arm of Japanese pharma giant Otsuka.
Six other platform companies are helping to accelerate mental health solutions.
ATAI’s roster includes Perception Neuroscience, which is developing an arketamine therapy; DemeRx, which is working on treatments for opioid use disorders; and Neuronasal, which has a spray designed to counter concussion injuries.
Innoplexus and EntheogeniX Biosciences are in their unique ways trying to harness the potential of artificial intelligence, while GABA Therapeutics has reformulated a drug called etifoxine for people with anxiety.
With a full clinical and pre-clinical pipeline, it looks likely that ATAI will seek to refill the coffers with a Series C round, says Malievsky.
Just how much it plans to raise is unknown at this stage. But given the interest in the sector, and the size of the market (antidepressant drug sales on their own are around US$14bn annually and growing), one suspects investor interest will be high.