Atai Beckley NV Q2 FY2021 earnings call

• Founded to address unmet mental health needs, operating with a decentralized model and enabling technologies. - Pipeline includes 11 development programs and 6 enabling technologies, focusing on compounds with prior human evidence. - Completed an IPO in June 2021, raising $259 million. - Has 18 R&D catalysts in the next 18 months. - Partnered with Otsuka, a major pharma deal, and recorded licensing revenue of $19.9 million from that agreement.

ATAI Life Sciences operates a decentralized model utilizing enabling technologies such as digital therapeutics. It has a pipeline of 11 development programs and 6 enabling technologies. In June 2021, it completed an upsized IPO, raising $259 million, and had cash and equivalents of $453.6 million as of June 30, 2021, up from $97.2 million at the end of 2020. The company has partnerships like the licensing deal with Otsuka.

• Anticipates top line data from Recognify Life Sciences and COMPASS Pathways phase 2 trials by year end. - Plans to initiate several phase 2 and phase 1 trials in upcoming quarters. - Strong cash position to support pipeline execution, with the ability to incubate, acquire, and invest in new programs and enabling technologies.

Actual results may differ from expectations due to various risks and uncertainties described in SEC filings, including risks related to clinical trial outcomes, market acceptance of products, and potential regulatory hurdles.

Q: Good morning, Florian and team. First of all, thanks for taking the question. And thanks for all the details outlining the 12 and 18. Call it week and month plan. So I had a quick question on RL-007 phase 2a and CIAS [ph]. I guess, I'm wondering if you could provide a little bit more detail on the enrollment criteria regarding call it symptom presentation, as well as concomitant medications and perhaps frame a useful result for informing the next steps out of that study with regard to dosing and duration.

A: Absolutely, Charles, and thanks for the question. You know, generally speaking, of course, they have to meet the criteria of schizophrenia with a cognitive impairment. That is, I believe, one sigma below normal. And in terms of concomitant meds, I mean, they're allowed to have that we are limiting it to our peprazol [ph] and one other related compound. And that's really about it, just to keep the population as homogeneous, as top as possible. In terms of a meaningful outcome, I mean, as you'll recall, what we're trying to do here is extend the results of the previous Phase 1 study, which is a scopolamine challenge study. And in that trial, they found two things. First, they found improvements in verbal memory. And they also found concomitantly with that, changes on quantitative qEEG, specifically, they found alterations in the spectral profile, pre and post drug and it was really shifting from lower frequencies to higher frequencies. And generally speaking, such higher frequencies are associated with improved cognition. Folks with schizophrenia, particularly those with prominent cognitive impairments, do have some degree of suppression of higher frequencies they tend to run at lower frequencies. So the very first thing that we're looking at is a replication of the quantitative qEEG spectral shift. So that's going to be the first thing and then we'd like to extend from there to some of the evoked potential measures that we're looking at mismatch negativity and P300. I mean, you know, but broadly speaking, a win would be around some of the spectral shift. That's kind of the key here. Obviously, concomitant, improvements and evoked potentials would be great. And, we are doing cognitive assessments as well. Obviously, this is a very small study, we aren't expecting much, but if we find some proportionality of concordance with the qEEG shifts, then that, of course, would be a big one as well.

Q: Good morning, guys. Thanks for taking the question. My first questions is on perception and one on one. Can you preview for us the dose that and the dosing paradigm and treatment duration that you're using in the upcoming phase 2 way that you plan to start in Q3? And when we do get the data in 2022, I guess what are the most important scales that we should be looking to for depression efficacy, but as well as the degree of dissociation versus S ketamine, and then I've got a follow up.

A: No problem. I'll start with that one, then. So in terms of dosing, we haven't really guided on that at this point. What I can say is that, based on the phase 1, we have some latitude on dosing, and we are certainly going with doses that are sub dissociated, based on the phase 1 results. So that's essentially what we're doing there. In terms of endpoints, obviously, the mad rush [ph] is going to be kind of key here. You also talked about those in frequency. So this trial is a single dose of it's a single IV administration of a compound and clearly the results of that what we're following there. So you know, the depressive symptomatology as a 14 days of primaries at 24 hours consistent with other ketamine studies. The results of this trial will give us some indication of the dosing frequency or the re dosing frequency which we do anticipate will be required here. Not unlike S ketamine or ketamine proper. There's preclinical data suggesting greater durability of effect. So that's really what's driving this hypothesis that we might be able to dose less frequently than S ketamine which, of course, is twice a week for four weeks. So you know, so that's kind of the long and short of it in terms of the dosing in terms of endpoints [ph]. obviously, is a key endpoint here. In terms of dissociative/psychedelic effects, there's really two things that we're focused on. Obviously, CADS [ph] is something that's widely used in the industry. And we certainly are including that, I'd say the CADS [ph] is perhaps not the best suited for this. We're also doing the five DSC here. And that will give us a lot more granularity on the sort of psychedelic type effects that one may that we're seeing what the compound.

Q: Got it. And then my next question is on the DemeRx Phase 1/2 study that you're planning or starting in Q3. So, you mentioned the safety in PK [ph], are you doing any special cardiovascular monitoring around the IV study? And again, since this is recreational drug users, what sort of efficacy data could you glean out of it and when?

A: Yes, so in terms of cardiovascular safety, of course, there is a signal depending on the publication for Q2 prolongation in this population, I mean, I think there are some compounds with existing data. There were certainly multiple dosing experiments that had been done. The concentration of Ibogaine wasn't necessarily clear. So that's something that we're looking at very closely. We are doing repeated ECG endpoints as well and sort of standard fashion here. We would like to see, of course, if there's a dose range that we can get to that is relatively devoid of Q2 prolongation. So that's really the focus here. In terms of efficacy and the phase one element, I mean basically, the focus on the efficacy endpoints are really in the phase 2 piece which is those individuals that are undergoing medically assisted detox. So, you know, looking at their withdrawal, and then looking at long term remission, if you will, is really what we're focusing on there, rather than within the phase 1 component of the trial.

Q: Hey, guys, thank you so much for taking my questions and congrats on all the progress. Maybe just starting with PCN-101. I was wondering if you could talk about the status of the subcutaneous formulation. You mentioned that would be moving into a bridging study in your opening comments. Just wondering, I guess where that stands? What if any gating factors, there are two starting that study and what your target volume would be for that administration?

A: I think a lot of that the details here are not public. I mean the long and short of it is that the formulation is under development. And of course, you know there's the formulation itself and then compatibility with the device to subcutaneous injector. So all that work is ongoing, the BE [ph] study, as you're familiar, is relatively straightforward, and very quick, right? I mean, it's basically comparative IV versus subcutaneous. And as we mentioned in the opening remarks, we are looking to get the data from that contemporaneously, roughly with the phase 2 results. So that's ongoing currently. In terms of volume, the standard volume here is for subcutaneous is keeping it under two milliliters. And obviously, we'd like to keep it significantly under two milliliters. And that's obviously what we're pursuing with our formulation.

Q: Good morning, and congratulations on all the progress. So first question, I wanted to ask about PCN-101 or ketamine for TRD? Regarding dissociative effects, or lack of. Is there any difference in patients who have been who may be more susceptible to potential dissociative effects? Or is it pretty clear that it depends on dose strengthen in this case, very high doses? And then I've got a follow up. Thanks.

A: Yes, that's a really interesting question. I mean, I think the short answer is we don't really know in terms of patient subsets. Obviously, it's something that we're looking into, we have a couple of different avenues to be looking into that including some of the digital aspects as well as some of the more metabolomic aspects. So if that's something that is of great interest, right now, we're focused on dose, to be honest with you.

Q: Okay, got it. And then wanted to ask about GRX-917 deuterated etifoxine for generalized anxiety disorder. Can you speak more about the non deuterated etifoxine use in France, and specifically, the safety profile where is it used in the treatment paradigm any additional details from its history of using in France? Thanks.

A: Yes, absolutely. So this is obviously a really old approval. So this was approved in 1979, in France, and there were some sort of reciprocal approvals and other small territories, but nothing in any of the major territories. And when it came out, it was viewed as a benzolite [ph] but it was pretty obvious that his profile was quite different. At that time and then in the late 70s, early 80s, this was kind of the heyday of benzodiazepines and people attributed the sort of drunk and feeling if you will, up a benzodiazepine with efficacy. So there was a bias against the compound right off the bat. And, you know, it is something that has sold significant amount that's used in particularly vulnerable patient populations, the elderly, et cetera, where there's certainly been a lot of use. And there was a publication a couple years ago that spoke to the safety. This was from the safety database in France, I think was about 13 million exposures, and looking at overall safety and compounds very well tolerated. Very limited effects in terms of reported adverse effects, certainly, compared to other compounds. I mean, compared to benzo [ph] was quite clean even compared to SSRIs, the profile was very favorable. Specifically, no data suggesting that there's any kind of addictive properties or dependence issues with this compound.

Q: Good morning, everyone and thanks so much for taking my question. Just a quick one on the pipeline for KUR-101, when you consider a broader indication set beyond OUD [ph], just given the range of traditional uses that the compound has had?

A: That's a good question. So you know, I tend to view opioid use disorder as kind of a spectrum. And you know, in many situations, particularly with iatrogenic [ph] opioid use disorder, it starts with the treatment of acute pain. And it's interesting, there was a study that was done a large cross sectional study that suggested that 6% is patients that received a prescription for an acute opioid in other words, short duration opioid, if they took it, we're still taking an opioid a year later. So that's really kind of terrifying. And obviously, things have kind of clamped down significantly over the course of subsequent years. But regardless, there is a need for a compound that has a better tolerability profile than a traditional opioids. So, that is something that we're looking at, again, there's a spectrum from treatment of pain, both acutely and chronically all the way to opioid use disorder. And that's something that we're going to be investigating with this compound. And to your point, this is basically where cradam [ph] is currently used, right? So, if you look at the boards, as it were, like the Reddit and other places, as well as some of the publications, it really is used as a treatment for pain, particularly those individuals that require more analgesia than non-scheduled compounds but can't tolerate an opioid and it's also used to mitigate withdrawal symptoms. So that spectrum is what we're focusing on as we develop this compound.

Q: Great, thanks. And just one follow up obviously, one of the beautiful things about a ties the multitude of different programs and the different API's so just curious whether the procurement of drugs substance for any of the programs had been a logistical challenge or if you foresee it being so in the future?

A: I mean, there have been no specific logistical challenge. I mean, certainly a lot of synthetic, there are three that are semi synthetic or purified extracts and that you know that's Ibogaine and deuterated methrozenine [ph]. We have good supply agreements for those products. So it hasn't really been an issue and we don't anticipate it being an issue. We are -- in general, we'd like to minimize the amount of stuff that's coming from plants for a range of reasons, you know, including environmental impacts. So we are looking at alternative routes to producing the drug substance, but something that will be that that's for a future discussion.