Peter Thiel's psychedelics-focused ATAI acquires majority stake in Recognify and its lead schizophrenia candidate
Billionaire Peter Thiel has made significant and sometimes controversial pushes into life sciences over the past few years, and one of his startups out of Berlin has made a new acquisition less than two months after achieving unicorn status.
ATAI Life Sciences purchased a majority stake Tuesday in Recognify Life Sciences, a company focused on developing treatments for cognitive impairment associated with schizophrenia. The financial terms of the deal weren’t disclosed, but the acquisition follows up a $125 million Series C in November co-led by Thiel, leading to a post-money valuation of about $1 billion for ATAI.
Recognify adds to ATAI’s portfolio of companies with psychedelic and non-psychedelic approaches to mental health disorders, including depression, anxiety and addiction. Tuesday’s deal centers around Recognify’s lead program, RL-007, a small molecule that the company says can modulate three mechanisms central to learning and memory: the cholinergic, NMDA and GABA type B receptor systems.
“We’re focused on CNS and within CNS mental health indications, and we’re not limited to addiction, depression, anxiety, but will holistically explore anything categorized in the DSM-5,” ATAI CEO Florian Brand told Endpoints News. “[Schizophrenia] is very much in our wheelhouse.”
ATAI has completed seven Phase I and two Phase II studies for RL-007, but the majority of these were related to pain in diabetic neuropathy, CSO Srinivas Rao told Endpoints News. Three of those studies demonstrated improvements in verbal learning and memory, ATAI said, including in a large Phase II study of subjects with peripheral neuropathic pain.
The plan going forward, Rao said, is to try to extend the results seen in these earlier studies and see if the compound’s mechanism can be further established. Recognify had included secondary endpoints in cognitive performance in their neuropathic pain studies, including a challenge study in healthy volunteers with the motion-sickness drug scopolamine, and ATAI’s goal is to pursue those signals in an open-label trial expected to launch early this year.
“We have a biomarker we can use, which are these EEG parameters,” Rao said. “There were particular phenomena noted in the scopolamine challenge, basically that slows down the frequencies in your EEG; that’s something seen in folks with schizophrenia. So that’s one of the first things we want to see, can you actually increase the frequency … which would be consistent with pro-cognitive effects.”
ATAI got started back in 2018 as R&D interest — and investor funding — in psychedelics picked back up to see if the field could prove fruitful in mental-health conditions. The area had been largely abandoned since the designation of psychedelic molecules as controlled substances in the 1970s and subsequent crackdown, but a group of researchers has been dipping their toes to try to engineer new versions of those compounds.
Tuesday’s acquisition comes about five months after ATAI picked up EmpathBio, which is advancing a new MDMA treatment for PTSD. Though that outfit is far from the clinic, ATAI hopes its candidates have better profiles than those in earlier research where scientists had to administer variations of the party drug over multiple days, in facilities where patients had to be supervised by trained professionals for hours.
Thiel, who made his fortune from co-founding PayPal and making the first outside investment in Facebook, has been busy as well. He joined a $35.4 million Series B for Peptilogics, a peptide drug design and development biotech, in December, and hopped onto the board of Eli Lilly partner AbCellera one month earlier.