In the creation story of the Nigerian Efik people, the creator god Abassi and his goddess wife find themselves in a disagreement over where humans should live. While Abassi desires for humans to live jointly with them in the heavens, Atai advises him to let humans inhabit the Earth, where the first humans learn the secrets of the Earth to achieve power and wisdom.

Much like the Efik goddess, the eponymous clinical-stage biopharmaceutical company is trying to steer the fate of psychiatric pharmacology, which has seen a developmental drought of several decades, onto fertile soil. And to transform the treatment of mental health conditions like anxiety, depression, schizophrenia, and substance use disorder, atai Life Sciences is peering into the world of psychedelics.

From the thousand-foot level, there hasn’t been really meaningful advancement in psychiatry, at least in the depression space, since the 1980s with SSRIs,” Glenn Short, PhD, senior vice president of Early Development at atai Life Sciences, told GEN Edge. “There is certainly a need for rapidly acting antidepressants that are clinically meaningful. So, I do see that psychedelics fit that niche pretty readily.”

The clinical testing climb

Atai was founded by Christian Angermayer of Apeiron Investment Group along with CEO Florian Brand and CSO Srinivas Rao, MD, PhD. With offices in New York, London, and Berlin, atai’s goal is to be a global biotech platform and company builder with paradigm-shifting interventions for unmet needs in the mental health space.

Just like any drug, atai’s psychedelic medicine drug candidates must go through the same clinical testing hoops to obtain regulatory approval prior to commercialization. To do so, these trials must incorporate endpoints that, for better or worse, have been used previously in regulatory precedent for other drugs.

“For antidepressants, there are certain clinical scales, such as the Montgomery-Asberg Depression Rating Scale (MADRS), that regulators have familiarity with,” Short told GEN Edge. “But when you start to step outside the bounds of regulatory familiarity, it will be more difficult to get consensus with regulators on what the acceptable endpoints would be and if the endpoint in question is appropriately validated. So, you are hamstrung somewhat with regards to the precedent that exists.”

Nevertheless, positive clinical outcomes from some earlier, first-generation traditional psychedelics have started to surface. Biotechnology companies such as Small Pharma and others in the psychedelic medicine space are starting to announce the clinical efficacy of traditional psychedelics, at least those that have been positioned for depression. Short’s company atai recently announced the first patient dosed with RL-007 in an ongoing phase IIb study in cognitive impairment associated with schizophrenia as well as its intention to progress GRX-917 into a Phase II trial in an anxiety disorder as the next step in clinical development.

The news has not been entirely positive on this front, though. In the first week of 2023, atai’s PCN-101, a single isomer of ketamine, failed to achieve its main goal of reducing depression when compared to a placebo. The company said it would “explore strategic options” for the drug in a fourth-quarter earnings report released this morning. Meanwhile, a separate IV-to-subcutaneous bridging study is ongoing and is anticipated to be finished by mid-2023.

And precisely two months after the ketamine-like drug from atai Life Sciences failed a phase II trial for depression, the company focused on mental health announced that it is laying off 30% of its staff to focus resources on advancing candidates through mid-stage trials. The company will reduce its headcount by almost a third as a result of a related strategic review of the pipeline, with general, administrative, and non-clinical development roles taking the biggest hit. The company’s runway should be extended by the cost savings into the first half of 2026.

The chariot

As part of a hub-and-spoke model, atai—the parent company—is made up of all the functionality regarding drug development. Each of its subsidiaries is focused on a specific asset, while reaching back into atai’s expertise to pull out the various functionalities needed to drive their program.

Some of atai’s subsidiaries are wholly owned subsidiaries, which are made up of atai employees who work to progress these individual programs. Others are partially owned, where atai retains major stakes in these companies and will partner with or license these assets, often many at a time. There is only a small development team that comes with these assets, with atai’s subject-matter experts filling the gaps to advance their development. Finally, there are equity-only companies, for example, COMPASS Pathways and IntelGenx, in which atai does not involve itself operationally.

Currently, atai and its subsidiaries have a variety of ongoing efforts, ranging from discovery programs to the clinic. Short said that the important pipeline components currently are RL-007 for Cognitive Impairment Associated With Schizophrenia from Recognify Life Sciences; GABA Therapeutics and GRX-917 (Deu-Etifoxine); and VLS-01 (DMT) with Viridia Life Sciences.

According to Short, atai is focused on both psychedelics and non-psychedelics that have prior evidence, whether it be direct clinical or anecdotal use and utility in humans.

“That was our rationale for focusing on compounds like DMT at the subsidiary of Viridia and an MDMA derivative that’s being developed at Empath Bio,” said Short, who believes these compounds can get to the clinic quickly with proven efficacy.


Even though there is a lot of convincing data emerging from clinical studies that support the potential of psychedelic medicine, Short says there is still a stigma associated with using a lot of these drugs.

“The mission of psychedelic medicine and all those involved is to be able to break that stigma down,” said Short. “You can do that by hammering home the utility of these various psychedelics within certain clinical indications to show efficacy that people just cannot argue against such as the psilocybin data on treatment-resistant depression that’s being developed by COMPASS Pathways for treatment-resistant depression.”

Additionally, Short thinks that isolating components of psychedelics’ mechanism of action and improving their effectiveness may be a way to break down some of those barriers. For example, psychedelics have been shown to drive neuroplasticity, so Short thinks that pulling out that capability while leaving behind the hallucinogenic effects may gain better acceptance with the traditional clinicians and psychiatrists in this case.

But studies, including some from Johns Hopkins in 2016, have shown that the mystical experiences brought on by psychedelics are linked to improvements in mental health, especially when it comes to depression.

Along these lines, the COMPASS Pathway’s Phase II study on treatment-resistant depression looked at two doses (10 mg and 25 mg), both of which caused psychedelic experiences in a previously conducted Phase I trial. They found that only the higher dose, which made people feel very psychedelic, worked. Short said that the question becomes whether patients need to be dosed high enough to have a strong psychedelic effect or if it triggers the right polypharmacology to have an effect with positive clinical outcomes.

One of atai’s drug discovery engines, Entheogenix Biosciences, uses artificial intelligence to be able to rapidly design novel molecules by mimicking the binding profiles of psychedelics. The idea is that the technology may aid in modifying psychedelic compounds such that the overall anticipated exposure and duration of the psychedelic effect will be minimized. Sometimes, the difference can be just a few atoms within a molecule that can turn something that behaves like a psychedelic into something that is still very potent on the target but does not have these psychedelic effects.

It’s clear, from a mechanical point of view, that psychedelics work on more than one target or disease pathway. “While the primary target receptors, at least for the classical psychedelics, whether it be psilocybin or DMT, are focused on the serotonergic receptor 5HT-2A, these are compounds that hit many other receptors,” said Short. “It’s possible that it’s not just one receptor in isolation that’s probably contributing to the efficacy, so it’s the polypharmacology that might be important.”

Short thinks that the next step is to think about the learnings coming out of these initial studies while some of the psychedelic medicines move to the market and start to figure out what the next generation will look like.

“Will they be non-hallucinogens or psychedelic-inspired medicines that still have the psychedelic components but fewer side effects?” asked Short. “We still don’t know, at least from a rigorous clinical study, whether the psychedelic component is truly necessary or not. The extent to which you can dial out some of the side effects while still maintaining efficacy is going to be important. But we still need to understand the foundational question of whether psychedelics, in and of themselves, are efficacious and build out from there.”

Previous articleAlzheimer’s Symptoms in Mice Reduced by Stimulating Adult Born Neurons
Next articleStockWatch: Illumina Shares Steady as Icahn Escalates Proxy Fight