ATAI has raised $100 million to turn psychedelics into treatments for depression and anxiety. Now the unusual biotech is gearing up to raise millions more for the next phase of human testing.
- Florian Brand helped start ATAI Life Sciences with one vision in mind: to effectively treat mental-health disorders by turning psychedelics into medicines.
- The way to do that? By bringing psychedelics through clinical trials and getting approval from regulatory agencies.
- Prominent backers like Mike Novogratz, Peter Thiel, Thor Bjorgolfsson, and Steve Jurvetson have come on board with this vision, investing over $100 million in ATAI. More recently, traditional biotech and pharmaceutical investors have shown interest as well.
- ATAI plans to raise a fresh round of funding, Brand said. The round is expected to equal or exceed ATAI's Series B round of $43 million.
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Florian Brand was skeptical of psychedelics at first.
His longtime friend Lars Wilde was the first to bring them up with him. At the time, in late 2016, Wilde was considering taking a trip to the Netherlands to try taking the psychedelic psilocybin to treat his severe depression.
Wilde says it was a desperate attempt to find a solution for his mental health after he tried many other treatments but didn't feel better. Psilocybin is the main psychoactive ingredient in hallucinogenic mushrooms.
Wilde went to the Netherlands and received a "high dose of psilocybin," or more than 5 grams of the compound, he recalled in a recent interview with Business Insider, and noticed improvement. Then Brand's wife, who had struggled with depression after losing her mother, also underwent treatment with psilocybin and saw the same effects.
"It was fantastic, and I didn't expect that," Wilde told Business Insider. "I didn't really believe it because it sounded too good to be true."
Brand, Wilde, and their friend and business partner Christian Angermayer came together in 2018 to found ATAI Life Sciences, a company dedicated to turning psychedelics into medicines.
ATAI calls itself a biotech platform company, meaning it invests in and works closely with companies looking to develop medicines for mental-health conditions from psychedelics like psilocybin, arketamine, and ibogaine.
Wilde - who helped build up ATAI with Brand and Angermayer - now works as the president and chief business officer of Compass Pathways, one of ATAI's portfolio companies. Compass is studying the use of psilocybin for treatment-resistant depression.
ATAI has raised more than $100 million from prominent backers like Mike Novogratz, Peter Thiel, Thor Bjorgolfsson, and Steve Jurvetson. The company plans to raise more money to keep funding its research, Brand said.
Enthusiasm grows for turning magic mushrooms into medicines
A company representative told Business Insider the new funding round was expected to equal or exceed ATAI's $43 million Series B round. ATAI is "focused primarily on institutional and strategic investors" this time, the person said.
The representative said the company had seen growing enthusiasm for medicine made from psychedelics over the past several years. ATAI presented one of its studies at the J.P. Morgan Healthcare Conference in January, for instance, and the company says it had meetings with numerous interested pharmaceutical companies and biotech investors. The company declined to identify any of them.
ATAI is testing several compounds as potential mental-health treatments through its portfolio companies, though many of the trials are in earlier stages and it could be years before any of the compounds yield medical treatments. The first treatment that ATAI thinks will be available for patients is Compass Pathways' psilocybin in three to five years.
Other compounds being tested include arketamine for treatment-resistant depression, ibogaine for opioid addiction, and etifoxine for anxiety disorder.
As someone who struggled with anxiety disorder, Brand said he recognized the potential that psychedelic medicine could have for those with treatment-resistant disorders. He said he also spent time reviewing the research himself.
Matthew Johnson, a professor who studies psychedelics at Johns Hopkins University, said the main reason we hadn't seen many developments in the research on psychedelics in the past few decades was the professional marginalization that researchers faced when they expressed interest in the field.
But interest in psychedelics as mental-health treatments has been picking up in recent years. In the past year or two especially we've seen more research and witnessed companies like Johnson & Johnson release a ketamine-inspired nasal spray for treatment-resistant depression.
Johnson, who has worked with psilocybin for over 15 years, said that the most promising data he'd seen had been on psilocybin but that he was a "strong proponent of pursuing multiple promising avenues."
"We need more tools in the toolbox," he told Business Insider.
Why investors are backing psychedelics
Amanda Eilian, a cofounder and partner at Able Partners, an investment fund focused on mental health and wellness that has invested in ATAI, told Business Insider that Brand's perspective on the mental-health crisis was an important factor for her company in choosing to invest.
"He doesn't come from a traditional pharma background," Eilian said. "And he's younger than many biotech execs. That was also important because the current community has not been able to deliver us solutions to address mental-health crises."
Brand attributes the interest from his backers to what he sees as the strong evidence surrounding psychedelics as medicine.
"They looked at the data, following the evidence for what has potential as an innovation driver in the field," Brand said. "I think we were lucky to be at the right moment at the right time to identify the potential and onboard those compounds."
ATAI's background and future plans
Before ATAI, Brand did everything from heading a kitchen e-commerce company (where he met Wilde) to interning at organizations focused on clean water and preventing HIV in developing countries.
Heading a psychedelics company wasn't in his plans, but he attributes where he is today - from fresh college graduate to CEO of a multimillion-dollar biotech company in less than a decade - to his efforts to try out a plethora of experiences. Brand says he learned what he was good at and what he was interested in by going after "helpful experiences" where the work was interesting and there was a steep learning curve.
Wilde, who affectionately refers to Brand as "Flo," said that while both he and Brand loved to cook and eat and enjoyed their time heading the e-commerce kitchen company Springlane, they cared about mental health for personal reasons and wanted to contribute to improving it through ATAI.
"One thing we keep saying is that our success is really measured in the number of lives we can save," Wilde said, citing stark statistics for suicide. "We're both driven by that."
That and the little progress that's been made in mental-health treatments since the development of depression drugs like selective serotonin reuptake inhibitors and serotonin-norepinephrine reuptake inhibitors in the late-20th century motivated Brand to build up ATAI Life Sciences, alongside Wilde and Angermayer.
They aim to bring psychedelics through clinical trials to get approval from regulatory agencies like the Food and Drug Administration in the US and the Medicines and Healthcare Products Regulatory Agency in the UK.
"There are more therapists interested in this space now and a paradigm shift in the medical and psychiatrist community that allows for these services," Brand said. He added that this openness would ultimately prepare both patients and professionals for an ecosystem in which ATAI's medicines - once approved - could be integrated into everyday healthcare.