View this email in your browser Spotlight: Srinivas Rao, MD, PhD Chief Scientific Officer, ATAI Life Sciences AG

MD from Yale University School of Medicine

PhD in Neuropharmacology from Yale University About ATAI: Largest private biotech company working on psychedelic medicine

Employs a decentralized platform model of development – with the Portfolio includes psychedelics like psilocybin and ibogaine, psychedelic-like compounds, and non-psychedelics

The company does not consider itself to be a “psychedelics company”, but rather a platform for evidence-based innovation in CNS drug development. ATAI's Platform & Companies ATAI has attracted over $100M in capital to date. What do you think attracted high-level investors to the psychedelic space and to ATAI specifically? The work of researchers like those at Imperial College of London and Johns Hopkins (among many others) in the space has done wonders in legitimizing the science of psychedelic medicine. My colleagues and I couldn’t be more grateful to them for their pioneering work.



With respect to ATAI specifically, I would say our distributed, holistic, and rigorous approach to the study of mental healthcare, coupled with an all-star scientific and regulatory team was that distinguishing factor. Our investors know that we’re committed to producing the highest possible quality clinical evidence and accompanying therapeutic protocols across a wide swathe of critical indications. Moreover, due to our team’s strong record of shepherding medications to market, there is trust that these medications will make it to patients as covered treatments.



I should add that none of this is to discount the work of others in the space, particularly those focused on building the necessary ecosystem for the delivery of psychedelic medicine. Folks like Ronan Levy and Field Trip are doing much needed work to ensure that once psychedelic therapies are approved and made available, we will be able to provide it to all who need it in a safe and supportive setting. This is absolutely critical and their progress has been instrumental in building investor confidence in the space more broadly. What do you think is the most important thing for people to understand about the future of psychedelics as medicine? Folks are beginning to catch on, but the main point is that psychedelics are not like cannabis. Psychedelics are – first and foremost – medicines, and, as such, must go through all the regulatory pathways that any other novel chemical entity might have to clear. There a numerous reasons for this, but the main ones are:



The relatively narrow therapeutic index of psychedelics as it regards long-term psychological impact. Psilocybin, for example, can provide long-term efficacy when provided in a supportive clinical setting, but by the same token can result in long-term harm when taken without support and in unsafe environment. Psychedelics-induced trauma is very possible despite what popular media might have you believe.



The need to ensure broad patient access. By diligently proceeding through established clinical and regulatory pathways, we not only ensure that psychedelics will become approved medicines and thus become integrated into mainstream healthcare, we also ensure that we’re producing the pharmacoeconomic data needed to show insurers that for patients for whom existing therapies haven’t worked (the treatment resistant population), it makes financial sense for these treatments to be covered. As a rule, patients with unmanaged mental illnesses overutilize all aspects of the healthcare delivery system (both physical and mental), so it is in the best interest of insurers to support patients in finding meaningful solutions.



The corollary to this is that – outside of a few interest groups – patients will continue to look to the healthcare system for information and [mental] healthcare. Particularly for older populations, who will soon outnumber those under the age of 18, the notion that these groups will turn to non-medical communities for care is unlikely. We need to be realistic and focus on creating and delivering these solutions to where the uptake will be broadest – the immensity of the crisis demands it. Which achievements are you most proud of at ATAI to date?



ATAI is unique in that our view of mental health is holistic. We follow what we call a platform model, which allows multiple teams working independently on complimentary therapeutics to draw upon ATAI’s in-house scientific and regulatory expertise for support and best practices that help avoid common pitfalls in the drug development process. Remember, CNS drug development has historically underdelivered -- very little innovation since the 1980s and 90s until the approval of esketamine and brexanolone– so all of this is new territory. By collaborating across therapeutics and indications (e.g. depression, anxiety, addiction, and even mTBI), we’re responsibly accelerating innovation in mental healthcare writ large.



Specifically? With the addition of DemeRx to the platform, I couldn’t be more proud of the fact that our portfolio now touches on each of what we see as the essentials of mental healthcare: depression, anxiety and addiction. That’s unique in the space and helps us keep a long-term and holistic perspective on the mental health crisis. Beyond that, we’ve added 8 assets (psychedelics, non-psychedelics, and artificial intelligence-driven drug discovery) in just a year and a half -- with more on the way! What is the most common misconception you hear about psychedelics?



I’d say there’s broad misunderstanding around what studying something like psilocybin versus “magic mushrooms” really means. Just as GMP-grade omega-3 fish oil (Lovaza) isn’t the same as salmon, psilocybin isn’t the same as a magic mushroom. The former is a pharmaceutical compound that’s been tested to be safe and effective -- whereas the latter is not. While the FDA can eventually approve the use of GMP psilocybin for one indication or another, “magic mushrooms” can never be approved (if for no other reason than the concentration of psilocybin and related compounds varies widely in mushroom).



I also think there’s a bit of misunderstanding about what decrim or legalization would really mean from a medical perspective. As stated above, by and large, patients will continue to look to mainstream healthcare for definitive information about care options, and if psychedelics are rolled out in all the trappings of “psychedelic culture”, a wide swathe of people will not be in a position to make use of them. Physicians won’t be able to prescribe or recommend them, and anyone who isn’t a part of the subculture or steeped in the science won’t have access to them.



Secondly, in the event of decriminalization or legalization, the sudden lack of barriers to entry inherent to the medical model will mean a flood of new players in the space competing to capture market shares, with a corresponding drop in the emphasis on the “- assisted ” aspect of psychedelic medicine. Importantly, since this will also mean that insurers won’t be covering “treatments”, the costs will be borne entirely by patients – and I can tell you that underground treatments can be just as expensive as clinical protocols (if you’re unsure about this, just look at legal retreats).



It's easy to gloss over safety concerns – in no small part because of the emphasis on positive experiences in the public narrative – but the medical system prioritizes patient security and confidentiality above all else. Those who take psychedelics are placed in a uniquely vulnerable state, so, whereas a regulator would require an REMS to be in place (therapist training, screening procedures, administration protocol, confidentiality, etc.), that is not true for retreats or non-medical models. Just take a look at what Shayla Love of Vice experienced even in Synthesis , the gold-standard of retreats:



“In a moment of lucidity, I looked through the window at the backyard and saw Gemma, sitting and crying—she looked distraught. I felt horribly guilty for taking away one of the people there to help her. That knowledge made my journey harder—and even more so since I was grappling with the themes of care, and my often-suppressed desire for others to take care of me. Here I was asking for care, but knowing deep down that I was asking for too much given the context that I was in.



(…)



I did not feel blissful, I did not walk away from my trip with a deep connection to the universe. If I were to summarize my takeaway in one sentence, it would be that that life is full of suffering, and that we are forced to sacrifice our softness to have the strength to face that suffering. I am curious if my takeaway would have been different with more support.



As difficult as that experience must have been, it can be much worse. What made you personally want to get involved in the space? Perhaps not surprisingly, there are both professional and personal elements to this. On the professional side, my interest in the 5-ht2a receptor system (and 5-ht more broadly) dates back to my PhD thesis work and, of course, my focus on affective disorders since then.



On the personal side, I, as well as many people in my family have struggled with mood disorders, and these symptoms have been highly resistant to typical medications. As such, I have a strong personal interest in finding new therapies. What obstacles and challenges do you think psychedelic-focused companies and researchers will need to overcome from an investment perspective? The biggest one is the shift away from psychedelics as recreational. Because of the (understandable but ultimately unhelpful) cross pollination between the very different cannabis and psychedelic advocacy movements, the field still looks risky. Yet, we’re already seeing changing attitudes from institutional investors as ever-later and larger trials produce promising results and the field becomes better capitalized and thus prepared to undertake the rigorous research required. The key will be to emphasize ad nauseum that these are a) medicines and b) are part of a broader treatment pathway that involves therapy and clinical support.



Much of the recent buzz around the cannabis market has been focused on the consumer side, though pharmaceutical companies have been developing cannabinoids as therapies for decades (e.g., Alkem’s Marinol, Benuvia’s Syndros, and GW Pharma’s Epidiolex); the present group of companies developing psychedelics are analogous to the latter rather than the former.



Another practical concern is the cost of late stage trials. In broadest terms, bringing a new drug to market can take up to a decade and cost approximately $2 billion. When J&J was studying esketamine, for example, they undertook a large development program (at least 30 studies) that likely totaled at least $300 million dollars. Does ATAI have plans to become a public company?



Ah, the perennial question :)



As much as I’d like to offer more guidance, all I can say is that we’re evaluating all avenues to maximizing the scale and impact of our work for patients. We’ll be sure to keep your team at Psychedelic Finance in the loop as things develop. Archives Spotlight Interviews

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