Very speculative IPO $ATAI psychedelics startup ATAI Life Sciences $2.3B Market Cap

German Psychedelics startup $ATAI backed by Peter Thiel, Atai life sciences, an early stage mental health drug development companies is going public at $2.3B market cap, raising $215M.

$ATAI I thought I’d take a Q&A approach to this company since there are no revenues, no earnings or metrics to speak of immediate term.

What are psychedelics?

The term “psychedelic” is derived from the Ancient Greek words psychē (ψυχή, “soul”) and dēloun (δηλοῦν, “to make visible, to reveal”), translating to “mind-manifesting”.

Psychedelics (also known as hallucinogens) are a class of psychoactive substances that produce changes in perception, mood and cognitive processes.

Psychedelics affect all the senses, altering a person’s thinking, sense of time and emotions. They can also cause a person to hallucinate—seeing or hearing things that do not exist or are distorted.

There are many different kinds of psychedelics. Some occur naturally, in trees, vines, seeds, fungi and leaves. Others are made in laboratories.

Drug wheel segment - Psychedelics segment@2x.png

What are the effects of psychedelics?

Physiologically, entheogens can temporarily increase blood pressure, heart rate, body temperature, and hormones such as cortisol and oxytocin.

The following may be experienced using them:

  • feelings of euphoria
  • sense of relaxation and wellbeing
  • seeing and hearing things that aren’t there
  • confusion and trouble concentrating
  • dizziness
  • blurred vision
  • clumsiness
  • fast or irregular heart beat
  • breathing quickly
  • vomiting
  • sweating and chills
  • numbness.

What are the type of psychedelics?

Acid or LSD

Lysergic acid diethylamide, or LSD, is a chemically synthesized hallucinogen, developed from ergot, a kind of mold that grows on the rye grain.

Dimethyltryptamine or DMT

DMT is a naturally occurring plant-based psychedelic found in the bark and nuts of certain trees.

Ololiuqui or Morning Glory Seeds

Ololiuqui is a naturally occurring psychedelic which is found in the seeds of the morning glory flower.

Psilocybin or Magic Mushrooms

Magic mushrooms contain a naturally occurring type of hallucinogen, called psilocybin, which is found in certain fungi.

Mescaline or Peyote

Mescaline is a naturally occurring psychedelic substance found in certain species of cactus, the most well-known being the peyote cactus.

What are the therapeutic benefits of psychedelics?

A 2016 review of the medical literature on psychedelics concluded that entheogenics are considered physiologically safe, with no evidence that they lead to dependence or addiction. There is a significant body of research that indicates psychedelics can help treat disorders that don’t always respond well to conventional medicine. 

Are psychedelics legal?

At present, psilocybin, LSD, psychedelic mushrooms, and other psychedelic substances are classified as Schedule I controlled substances under US federal law.

Legalizing psychedelics would remove all legal prohibitions against their use and make them available to the general adult population for purchase and use at will, similar to cannabis in adult-use states. 

What does $ATAI do in psychedelics?

$ATAI has a pipeline containing 10 development programs and 6 enabling technologies. One of its companies has initiated a Phase 2a trial in the US, and ATAI expects to initiate a Phase 2 trial for another program in 2021 and three additional Phase 2 trials for other programs in 2022.

How much is $ATAI going to raise? What is the Market Cap?

$ATAI is raising $215M at $2.3B market cap. The market cap is based on selling 14.3M shares at $15 during IPO.

Which are other psychedelics companies?

Compass pathways $CMPS, Mind Medicine $MNMD and Aikido $AIKI are important companies.

$BMBIF, $TRYPF, $LFYSF $CYBN $CLXPF $NUMI $MMED and $MEDH are other tickers to watch.

How will we track the progress of $ATAI?

$ATAI One of its companies, Recognify Life Sciences, has initiated a Phase 2a trial in the US. ATAI expects to initiate a Phase 2 trial for another program in 2021 and an additional three Phase 2 trials for other programs in 2022. Below are the other companies.

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What is $ATAI corporate structure?

$ATAI has ownership in the 10 companies, but each is allowed to pursue their own path (funding, growth, research), since they target different therapies.

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Analysis

I think this might solely be a trade for me given the likelihood of sharp movement in price action. Since I am not a biotech expert, I will not likely take a large, long position. The fact that Peter Thiel is involved gives this (as with $PLTR and $VLDR some credibility).