Mental health-focused atai chops 30% of staff to 'further focus' on looming readouts
Chopping the pipeline and discontinuing funding for certain programs were not enough to keep atai Life Sciences’ finances in check after all.
More than half a year after announcing those changes, the company has taken another long look at its pipeline of drugs for mental health disorders and laid off 30% of its staffers. The layoffs will mainly impact those in general and administration and non-clinical development roles, atai added.
A spokesperson told Endpoints News that “because the decision was geared to ensure we are equipped with the right team to hit our clinical program milestones (some accelerated) and generate meaningful data, the 30% of employees who were affected came primarily from general and administrative areas rather than clinical development.
CEO and co-founder Florian Brand called the decision part of an effort to “further focus our capital allocation towards generating meaningful clinical readouts in the near-term” and operate more efficiently.
Many biotechs have cited similar reasons in shrinking their workforce in recent months, as public and private companies alike find themselves having to go longer with less money — until they hit good enough data to entice investors.
Atai revealed in August that it’s implementing a “company-wide cost optimization” to save money, with funding discontinued for certain discovery programs being developed at its subsidiaries and others deprioritized. But its shares $ATAI kept going down and are now trading at $1.58.
It is now banking on several key programs, including RL-007, with which it’s recently dosed the first patient in a Phase IIb study in cognitive impairment associated with schizophrenia; and GRX-917, for which a Phase II study in anxiety disorder is planned.
Then there are the two candidates for treatment-resistant depression. PCN-101, an isomer of ketamine, recently flopped in a Phase IIa trial but atai is still considering next steps; COMP360 is a psilocybin therapy that is now in Phase III, and the company is speeding up the trial so that topline data are now expected in the summer of 2024.
The company now extends its cash on hand to fund operations into the first half of 2026.
Editor’s note: This story has been corrected to clarify that atai did not drop out of partnerships, but rather stopped funding programs it was developing in partnership with subsidiaries.