Raises, R&D, Patents, & Spending: Exploring the Preliminary Prospectus Filed by ATAI

The race towards novel IP in psychedelic drug development has never been more competitive, as more companies are striving to discover, patent, and profit off their next big developments. Angermayer and Thiel-backed biopharmaceutical company, ATAI Life Sciences, is a major player in the psychedelic space with some promising developments to share. Based on a preliminary prospectus the company just filed, the major takeaways are hugely increased R&D spending and the expansion of their patent portfolio. This guide will take a closer look at the prospectus and what this could mean for the future of psychedelic frontrunner, ATAI Life Sciences.

Successful Capital Raises Signify Serious Investor Confidence

The psychedelic capital markets landscape has seen some significant activity between major capital raise to several IPOs, RTOs, and more in the last year alone! “To date, we have raised an aggregate of $362.3 million in gross cash proceeds from the sale of our common stock and convertible notes,” the company noted through the prospectus. With their upcoming IPO, the company hopes to raise another $100 million dollars. Proceeds from their raise will go towards a large and diversified effort to expand R&D, among other goals (discussed more in the “Use of Proceeds” section). ATAI’s upcoming raise is expected to be a bought deal, further establishing investor confidence in the company. Proceeds from the raise are expected to be utilized for R&D purposes, although exact amounts will not be specified until the final prospectus is filed.

Massive R&D Spending Spike Signifies Strong Strategy & Sound Progress

A closer look at the prospectus filed by ATAI Life Sciences demonstrates that over the last two years, their R&D spending has increased by over 200%. Like many other companies in the space, their objective is to develop novel and patentable drug formulations—an arduous task requiring immense capital investment (and a bit of luck) to be successful. Indeed, ATAI’s expanding patent portfolio clearly suggests that they know what they are doing when it comes to seeing novel drug candidates through the patent approval process. Indeed, their collection of both pending and, more importantly, issued patent applications, places them at a strong advantage over the competition.

ATAI’s Robust Patent Portfolio Includes Issued Patents That are Very Valuable to Investors

In the race to novel IP in the psychedelic drug development space, patents play a critical role to help investors feel safer about their investments. After all, the drug development game is a risky, long-term play, especially in such a speculative sector where the classes of drugs in question are still largely federally illegal around the world. The need for novel compounds that are both safe and efficacious is critical to the success of companies like ATAI. Furthermore, since ATAI is a major equity stakeholder (26.1%) in the well-known psychedelic firm Compass Pathways, they also have exposure to the benefits of their intellectual property portfolio. Their economic interest in Compass is likely well placed, as experts from across the financial sector have given it a bright forecast. Due to their significant stake in Compass Pathways, the ATAI team has a serious economic interest in Compass’ robust IP portfolio. The fact ATAI owns a significant chunk of the other largest company in the psychedelic space is an important consideration for investors.

Use of Proceeds: How ATAI Plans to Spend Their Money

While the exact dollar amounts behind ATAI’s intended use of their proceeds are still unknown until they file their final prospectus, we do know the general objectives they are trying to accomplish with it. As listed in the prospectus, their main goals are as follows:

• -Fund their ongoing Phase 1 and Phase 2 clinical trials of their most advanced drug development programs
• -Continue funding their preclinical programs, discovery, manufacturing and supporting research and development
• -Fund the development of their enabling technologies
• -Fund the acquisition of and development for activities related to new programs and enabling technologies

Closing Thoughts & A Look Ahead for ATAI Life Sciences

The team at ATAI has been making major progress in their journey as psychedelic frontrunners. Between their major industry raises to their rapidly increasing capital allocation towards R&D, it certainly seems like ATAI is making all the right moves. Investors and psychedelic enthusiasts alike would be wise to follow their progress.