Peter Thiel-backed psychedelics player ATAI pulls in another nine-figure raise. But they're not ready to talk IPO — yet
Roughly three and a half months since its last fundraising round, the Peter Thiel-backed ATAI Life Sciences has pulled in its latest venture haul.
The company closed a $157 million Series D round early Wednesday as it presses the gas on its psychedelics-based strategy. Though the short time between the two raises will likely fuel speculation about a potential jump to Nasdaq, ATAI isn’t ready to talk about that just yet, preemptively declining comment on all IPO-related questions.
Nevertheless, it marks a four-month span in which the company has seen nearly $300 million of capital flow into its coffers, as well as Thiel joining its cadre of investors.
ATAI’s business model for developing therapeutics covering a range of mental health disorders — bringing portfolio companies under one umbrella — is driving the heavy investor interest, CEO Florian Brand told Endpoints News. With the new raise coming almost immediately after the Series C, ATAI can now “double down” on its strategy, Brand said.
“A lot of awareness is increasing that the mental health crisis is a severe issue, which has only been amplified by Covid,” Brand said. “The way we’ve positioned ourselves gives us a very good opportunity to bring more effective treatments to the market and create interest among the investor community on more projects.”
Right now, ATAI has 13 programs developing drugs, and has disclosed two platform-based companies they’ve welcomed into their portfolio.
On top of that, the market has seemingly validated ATAI’s focus on psychedelics. Brand pointed to Compass Pathways’ $146.6 million IPO last September as a key development for legitimizing what ATAI is also trying to accomplish.
Compass’s most recent data come from December 2019 in a Phase Ib trial, showing their man-made version of the chemical psilocybin — a psychoactive ingredient found in some species of “magic mushrooms” — had been well-tolerated in 89 healthy volunteers. Coincidentally or not, Compass also brought in investments from Thiel to research psilocybin with psychological support as a treatment for mental illnesses such as depression, anxiety and addiction.
Though the cash has been flowing in for ATAI, the M&A landscape has been quiet since their January deal to acquire schizophrenia-focused company Recognify Life Sciences. Brand said he’s hoping that ATAI’s acquisition appetite will kick back into gear with the new Series D.
But ATAI’s bigger goal over the next few years, now that they have some more cash to expand their portfolio, is to push the psychedelics space to resemble precision medicine. ATAI is ultimately working toward digital therapeutics that can ideally predict what treatments might work best for specific patients, CMO Srinivas Rao told Endpoints.
It’s still too early for the company to divulge too much of its efforts on this front, Rao said, but once they get the ball rolling they hope to push forward an “aggressive” timeline.