AtaiBeckley Inc. Q3 FY2021 Earnings Call

Thank you. Welcome to our third quarter 2021 ATAI Life Sciences corporate update conference call. The press release reporting our financial results is available in the Investors & Media section of our website. Joining me today are Florian Brand, our co-Founder and Chief Executive Officer; Dr. Srinivas Rao, our co-Founder and Chief Scientific Officer; and Greg Weaver, our Chief Financial Officer. During today's call, we will be making certain forward-looking statements that are intended to be covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. While these statements represent management's current expectations of projections about future results and performance as of today, ATAI’s results are subject to many risks and uncertainties that could cause actual results to differ materially from those expectations. In addition to any risks highlighted during this call, these statements are subject to additional risks that are described in our filings made with the Securities and Exchange Commission, including our final prospectus filed with the SEC on September 30 of 2021. Please caution not to place undue reliance on these forward-looking statements which speak only as of today, November 15, 2021. And except as may be required by applicable law, ATAI disclaims any obligation to update such statements, even if management's views change. I would now like to turn the call over to ATAI's CEO Florian Brand, Florian.

Good morning. And thank you all for joining our 2021 third quarter earnings call today. To begin, I will provide a few introductory comments and reiterate the strategy underpinning our vision to heal mental health disorders so that everyone everywhere can live a more fulfilled life. Then my co-Founder and CSO, Srini will review highlights from our drug development pipeline. And finally, our CFO Greg will provide the quarterly financial reports followed by the Q&A. Building on the momentum of our successful IPO on NASDAQ in June, we have continued to advance our innovative and diversified pipeline, focused on differentiated approaches to address important unmet patient needs in mental health. In addition, we anticipate further growing our drug development pipeline and enabling technologies through a buy-and-build approach and will remain highly active in business developments. In response to the heterogeneous mental health patient population, we plan to tailor our treatments to individual patient needs by using a diverse set of biomarkers supported by digital therapeutics and robust insights from our multimodal data approach. Just last week, we were excited to see strong positive Phase 2b data from COMPASS Pathways, the very first company that we funded to research the therapeutic potential of psychedelics. This clinical trial investigated COMPASS’s proprietary formulation of psilocybin called COMP360. It demonstrated rapid onset of effects and efficacy in treatment-resistant depression. In a few minutes, Srini will provide further details on these important results. Later this year, we anticipate another top-line data readout of our Phase 2a biomarker study with RL-007 in Cognitive Impairment Associated with Schizophrenia, or CIAS. We were encouraged by the interim data readout earlier this quarter, and we are eagerly anticipating the full results of this study given the lack of progress in developing treatments for CIAS, where we still have no approved treatments. As for our discovery stage assets, earlier this quarter, we announced the launch of PsyProtix, a precision psychiatry company focused on developing therapeutics for mental health indications. PsyProtix will study metabolic mechanisms associated with depression symptoms with the goal of deriving more tailored treatments to better meet individual patient needs. We expect to launch clinical trials in 2023. We have also seen great progress on our enabling technologies. For example, InnarisBio, which is developing a cell gel-based delivery technology to effectively transport compounds directly from the nose to the brain, recently completed a preclinical proof-of-principle study. We anticipate applying this technology across various drug candidates in our pipeline. In September, our company Introspect launched a user acceptability study of our digital therapeutic apps in patients with treatment-resistant depression undergoing ketamine therapy. In addition, our BCI company will soon begin testing a virtual reality and neurofeedback-based proof of concept device to support the in-clinic patient experience. We are currently optimizing the device ahead of inclusion in the clinical trials of several partners. We are making great progress towards our goal of a broad pipeline of novel transformative mental health therapies tailored to patient needs. I will now hand over to Srini to take us through some of our key pipeline updates and upcoming milestones. Srini.

Thanks Florian. In summary, we have a broad array of exciting assays in or nearing the clinic. On this call, I will focus on the programs with the most near-term visibility and highlight upcoming milestones. I'll start with COMPASS Pathways and its development candidate COMP360. The latter is a proprietary formulation of synthetic psilocybin, a 5HT2A receptor agonist being developed as an oral potentially rapid-acting antidepressant. We'd like to offer a huge congratulations to the COMP360 team. Last week, COMPASS, in which we own a strategic stake of 19.4%, announced positive top-line results from Phase 2b randomized, dose-controlled, double-blind trial of COMP360 for the treatment of treatment-resistant depression or TRD. The 233-patient study met its primary endpoint with a statistically significant 6.6 points reduction from baseline to week 3 of the Montgomery-Åsberg Depression Rating Scale or MADRS, a widely used measure of depressive symptomatology. The trial demonstrated that COMP360 treatment resulted in a rapid response with statistically significant changes in the MADRS noted 24 hours post-dose, when comparing results with 25 to 1 milligram dose arms. Further durability of efficacy was also found, as measured by response and remission rates at 12 weeks. Finally, COMP360 was generally well tolerated with more than 90% of treatment-emergent adverse events mild or moderate in severity. In summary, we are highly encouraged by this data showing both a rapid and durable anti-depressive effect in a difficult-to-treat population with limited treatment options. We believe these results not only bode well for the continued progress of COMPASS’s program, but confirm our belief that our pipeline of psychedelic drugs with different routes of administration, durations of actions, and pharmacology can help improve the lives of patients with serious mental health disorders while improving on the current standard of care. Next, on to Perception Neuroscience, which is developing PCN-101, a glutamatergic modulator for the treatment of TRD. In September, we initiated the Phase 2a trial of PCN-101. This randomized double-blind placebo-controlled trial testing an IV formulation of our ketamine will be conducted across multiple sites in Europe and the U.S., enrolling 93 patients diagnosed with TRD. We anticipate the study to run through late 2022. In parallel, we intend to conclude a Phase 1 comparative bioavailability study to bridge from the IV formulation to subcutaneous formulation of PCN-101, one that we believe will support at-home use. As we've mentioned before, we're excited about this potential aspect of differentiation, particularly from the perspective of scalability and commercial potential for a product delivered at home. These trials build upon extensive preclinical and strong preliminary clinical data that support the hypothesis that our ketamine may be efficacious at sub-dissociative doses, in contrast to S-ketamine. In preclinical models, R-Ketamine has demonstrated higher potency, greater durability, and lower abuse potential compared to S-ketamine. In February 2021, perception announced positive Phase 1 results demonstrating the safety and tolerability of PCN-101 in 58 subjects treated at doses of up to 150 milligrams IV. Additional details of this trial were made available in late September. In summary, we found that R-ketamine had no or minimal associated effects at the 30 and 60 milligram doses, respectively, and these are the doses being tested in the Phase 2a trial. In April 2021, Recognify initiated a 32-patient Phase 2a proof-of-mechanism study for RL-007, a GABA-glutamate and cholinergic receptor modulator for the treatment of Cognitive Impairment Associated with Schizophrenia or CIAS. The Phase 2a trial is designed to evaluate the effects of RL-007 on safety, tolerability, and quantitative electroencephalogram, or qEEG-based measures that are viewed as biomarkers for cognition. This builds on a previous study involving a scopolamine challenge in healthy volunteers, which demonstrated RL-007 both improved verbal memory and partially restored the shifts in qEEG spectral power induced by scopolamine. Of note, the results of a recently completed interim analysis of the qEEG data from the eight patients in the first cohort were encouraging. We observed spectral shifts on the qEEG that were similar qualitatively and quantitatively to what we previously saw in the scopolamine challenge trial. As a result, ATAI advanced a portion of a future milestone payment, aiming to accelerate the initiation of the subsequent Phase 2 trial. Broadly, we anticipate that this will be a double-blind placebo-controlled proof-of-concept study focusing on more traditional cognitive endpoints, including subsets of the METRICS battery. We expect to announce top-line results of the Phase 2a trial before the end of the year. And we will be reviewing a confluence of data, including spectral shifts, qEEG evoked potential information, and changes in measurements of cognition to help us support a decision for clinical advancement of the stroke candidate. Next, GABA Therapeutics' primary program is GRX-917, an oral formulation of a deuterated version of etifoxine. Mechanistically, etifoxine and GRX-917 have been found preclinically to increase the production of neurosteroids, including allopregnanolone, an IV formulation of which was approved in the United States in 2019 for the treatment of postpartum depression. This mechanism of action is thought to underlie etifoxine’s rapid onset and anxiolytic activity, which is similar to that observed with benzodiazepines, but without the sedation, cognitive impairment, or abuse and dependence risks associated with this class of compounds. Furthermore, etifoxine has an extensive safety database, which we believe will greatly mitigate the risk of future developments of GRX-917. Like etifoxine, we hypothesize that GRX-917 will provide rapid anxiolytic activity with improved tolerability compared to current treatments for anxiety, and the duration is intended to enable less frequent dosing or low doses compared with etifoxine. In June 2021, we initiated a randomized double-blind placebo-controlled Phase 1 trial in Australia with planned enrollment of up to 76 healthy adults. The study is a single ascending dose and multiple ascending dose design, focusing on safety, tolerability, pharmacokinetics, and pharmacodynamics using quantitative EEG. Based upon the mechanism of action of GRX-917, we're using the qEEG as a target engagement biomarker, looking for increased relative spectral power in the beta band. Such changes have been demonstrated with IV allopregnanolone and related compounds, and were also noted in a Phase 1 trial of etifoxine that we conducted in 2019. The single ascending dose elements of the GRX-917 Phase 1 trial were recently completed, and the multiple ascending dose component of the trial is ongoing. Offline data for the entirety of the GRX-917 Phase 1 trial are expected by the middle of 2022. Moving to DemeRx, we are developing DMX-1002, an oral formulation of ibogaine, a naturally occurring psychedelic compound as a treatment for opioid use disorder. In September, we dosed the first subject in the Phase 1 component of an exploratory Phase 1/2a trial of DMX-1002 in subjects in the UK. The Phase 1/2a trial is designed to assess safety, tolerability, pharmacokinetics, and efficacy, and the results will inform future studies in patients with opioid use disorder. We expect to obtain safety data from the Phase 1 portion of this trial in early 2022. Lastly, a quick update on EntheogeniX, which is developing structurally novel psychedelic compounds using a machine learning-based computational chemistry platform. EntheogeniX has created and pharmacologically tested over 250 novel compounds generated by this platform. Lead candidate selection is currently ongoing, which will further bolster our extensive early-stage pipeline. We will provide a more detailed update on this and other early-stage programs and associated milestones as we enter next year. I will now turn the call over to Greg for an overview of our financial highlights.

Thank you, Srini. ATAI continues to maintain its excellent cash position, with cash and equivalents totaling $430.3 million as of September 30, 2021, compared to $453.6 million as of June 30, 2021. The net use of cash over the two months totaled $23.3 million, driven by $27.2 million in investments in platform companies and net operating expenses, offset by $2.9 million in net cash proceeds from the conversion of convertible notes and payment of IPO-related costs during the quarter. Consistent with prior guidance, our cash runway is expected to fund our operations into 2024. Third quarter 2021 total operating expenses were $33.6 million, compared to $61.3 million in Q2. The decrease in total OpEx of $27.7 million was driven primarily by a reduction in non-cash stock-based compensation of $25.5 million compared to Q2. In addition, looking back at Q2, we recorded an acquired one-time in-process R&D expense of $8 million from our initial consolidation of NeuroNeura. These decreases were offset by an increase in R&D expenses, excluding stock-based compensation, which increased by $1.1 million from $6.9 million in Q2 to $8.1 million in Q3 as we added R&D personnel and made advancements in our clinical programs. The increase in G&A expenses, excluding stock-based compensation, rose by $4.8 million from $8.7 million in Q2 to $13.5 million in Q3 due to growth in G&A costs related to personnel and benefits and D&O insurance, all associated with building and operating ATAI as a public company. Regarding the decrease of $25 million in stock-based compensation, the current Q3 total of $12.2 million represents the run-rate of normal vesting conditions going forward.

Thank you, Greg and Srini. I would like to thank the entire ATAI team, as well as our supportive investors for their contributions to all we've achieved this quarter. While we believe the for-profit model is the fastest way of bringing new solutions to patients in need, we also understand that the mental health crisis will not be solved by for-profit models alone. So I'm proud to report that in October, we announced the launch of our new philanthropic program ATAI Impact. We believe that commercial and non-profit entities must stand shoulder to shoulder to tackle this global crisis. The ATAI Impact program will initially be funded by 1% of the gross proceeds from our IPO and equity contributions from shareholders and founders. The program will support and collaborate with non-profits and institutions that share ATAI’s vision of healing mental health disorders. With our strong balance sheet and broad portfolio, we continue to solidify our leadership position as an innovative drug developer in mental health. Our differentiated model has been validated by partnerships with large pharma and academic institutions. By designing our company to maximize the probability of success in drug development, we combine three elements: a unique portfolio approach, a focus on developing compounds with prior evidence in humans, and a milestone-based approach to capital allocation. We're pleased with our progress in Q3 and look forward to further value-driving catalysts across our pipeline. Most notably, we expect the top-line data for Recognify’s Phase 2a by the end of 2021, followed by the GABA Phase 1 data in early 2022. We look forward to providing updates on our progress as we continue to drive our business forward. With that, we are happy to take questions.

Thank you. At this time, we'll be conducting a question-and-answer session. Our first question comes from Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

Good morning, Florian and team. Thanks for taking our question, and congratulations on a good quarter progress since coming public recently. Have a quick question on RL-007. Specifically, what could be a win out of the upcoming Phase 2a? And I'm wondering if that's a 'nice to have,' not a 'need to have' in terms of the design of Phase 2b? Can you imagine being in Phase 2b in the second half of 2022? Also, I'd like to ask about any further information on the eight patients in the first cohort regarding the observation spectrum shifts that you saw?

Yeah. Thanks, Charles. As I've discussed previously, there are a couple of things that we're looking for in the Phase 2a. The first tier was spectral shifts of qEEG that were qualitatively and quantitatively similar to what was observed previously in the scopolamine challenge Phase 1 trial. The next tier down were the evoked potentials, including mismatch negativity, P170, and P300s with an oddball task. The final tier consists of cognitive assessments, specifically focusing on verbal memory, but also sustained attention. These are the three tiers I would say. This trial really wasn't set up or designed adequately to power for cognitive assessments. What we're really looking for there is some sort of correlation with some other marker. The first eight patients did show qEEG results, and these spectral power shifts were comparable to what we saw earlier, which we found encouraging. That led to the advancement of a portion of the milestone to get the next trial running a little bit sooner, hopefully saving us about a quarter. We haven’t guided on timing yet.

I’m sorry. I think you were going to address the timing question.

Yeah, we really haven't guided on that to be honest with you. But we said broadly that once this trial wraps up, we'll be starting another trial.

Okay. And one additional question, if I may, on COMP360. I saw the data recently and know that you have at least two or three other programs in depression. I guess I'm wondering if the results impact your assumptions regarding the sizing, timing, or control paradigms for further studies in treatment-resistant depression. Also, can you provide your impressions on the primary endpoint of three-week efficacy versus durability?

Yep. Thanks, Charles. Before I hand it back to Srini, let me quickly take the opportunity to again, congratulate the entire COMPASS team for their impressive data readout. This was a significant moment for us. As you know, COMPASS was the first company we supported in this space, and we perceive this as greatly validating for their psilocybin-assisted therapy and for the other psychedelic-assisted therapies that we have in development. Overall, the data from COMP360 was greatly encouraging, both for the program and for psychedelics' potential in mental health. With that, Srini, perhaps you want to comment a little further on the details.

Yeah. Charles, addressing your first point around design: these are considerations we'll be looking into further. There are differences with what we're doing versus COMPASS. Certainly, psilocybin has a long-duration psychedelic effect, whereas the compounds we're designing are much shorter acting. The question of how the duration of psychedelic effects impacts durability is open at this point. Our trials were always configured for re-dosing, which is an important element we want to factor in with the use of digital therapeutics to guide those re-dosing decisions. I can't speak to how COMPASS is going to approach this. In terms of the big picture, I would say the design hasn't fundamentally changed, but there will be a lot of detailed learning as we analyze this data and more data becomes available. Regarding the three-week endpoint, I think that was a reasonable endpoint. Let's be fair, COMPASS really utilized that three-week endpoint, especially when you start comparing it with some S-ketamine data. In fairness, S-ketamine's trials were two administrations per week, while COMPASS's study was based on a single administration. This improves logistics for COMP360 versus S-ketamine. Thanks for the added color.

Our next question comes from the line of Neena Bitritto-Garg with Citi. Please proceed with your question?

Hey, guys, thanks for taking my question. Just on the Perception Neuroscience update, can you talk a little more about the bridging study that you're planning on conducting for the subcutaneous dose? And when might we see data from that study?

Yeah. The current trial is using an IV formulation of R-ketamine, which is very comparable to how Janssen conducted their S-ketamine program. The initial trial was based on an IV formulation. In parallel, we are conducting a bioavailability study fundamentally looking at the pharmacokinetics of this IV formulation compared to subcutaneous formulations. The idea is to match the IV infusion profile closely within bioequivalence limits. We want to ensure that there are no significant peaks affecting safety and efficacy. In terms of the endpoints and results anticipated, it’s roughly contemporaneous with the Phase 2a results.

Thank you. Our next question comes from the line of Ritu Baral with Cowen & Company. Please proceed with your question.

Good morning, everyone. Thanks for taking my questions. Just following up on Neena’s question on 101. Regarding PK, what's the scale that will best confirm the magnitude of disassociated effect and potential separation from the pharmaceutical profile? And as you discuss PK dynamics from subcutaneous administration, how should we think about peaks and area under the curve as far as the dissociative side effects versus efficacy? If you bring the peak down, could it improve tolerability? Could this be a reason for less dissociation, but could that impact efficacy? How should we view the PK curve? Finally, what scale should we use to differentiate between 101 and its competitors?

That's a great question. In terms of scales, we're looking at existing scales for a lot of these trials, including those used in ketamine studies. However, there's challenges with ketamine's resolution, so we're also focusing on other instruments that we are evaluating. Concerning the relationship of AUC versus peak effects: higher peaks are likely to decrease tolerability, while correlating with efficacy is complex. Our goal is ultimately to match the current PK profile as closely as possible.

Got it? And my follow-up is on deuterated etifoxine 917. You mentioned you're looking for qEEG spectral shift in the beta band. Can you talk about what percentage shift has been seen from other GABA-ergic drugs? What's the threshold you're targeting? The single ascending dose data is expected early 2022; will we see that from the single dose or multiple dose portion?

We're not giving much detail on the magnitude of spectral shifts yet. We're looking for robust changes in spectral shifts as the primary goal. We expect results from both the single ascending dose and multiple ascending dose, and the latter serves as a replication sample. We’ll likely wait for both before going into specifics.

Thank you. Our next question comes from Judah Frommer with Credit Suisse. Please proceed with your question.

Hi, thanks for taking my questions. First, I was hoping to dive deeper into 007. We have a few questions, just unpacking the design of the Phase 2a trial. What are the next steps in terms of the cognitive endpoints that will be assessed? Once you have those, can you elaborate on the decision-making process of moving towards a Phase 2b? Could this Phase 2a lead to incremental findings or must it support a Phase 2b?

Sure, let's address the last point first. In terms of what the next trial looks like, we’re still working on it. The Phase 2b could support an end-of-Phase 2b meeting depending on findings, and we’re identifying endpoints relevant in this context, potentially using parts of the METRICS battery. Key considerations include durability and duration of efficacy.

Got it. Do you have an estimate of the active and placebo arms size in the next portion?

We will have a placebo group; however, I don't have specific numbers yet. It will depend on various design factors linked to the effect sizes we're observing.

Okay. And regarding GABA, your timeline changed for Phase 1 data early 2022. Was this impacted by recruitment timelines or complications from COVID?

Yes, you nailed it there. Recruitment was slower than anticipated, influenced by factors like relying on students and travel restrictions due to lockdowns. We're now clearing backlogs and pushing to get cohorts enrolled sooner.

Got it. And lastly, regarding cash runway tied to pipeline programs, how should we think about prioritizing cash towards various programs? Will you aim to get these programs as far along as possible as you approach the end of your cash runway, and can you discuss how programs will be prioritized?

Thanks, Judah. It's a good question; we give a lot of thought to cash allocation going forward. Keep in mind, we have a runway now of $430 million right through 2022 and 2023. We're in the planning stages right now in Q4, laying out details for 2022 priorities. That said, it's safe to say we will continue to operate on all fronts. We have a strong balance sheet and see no reason for deprioritizing any programs. We plan to drive multiple Phase 2 programs, with several expected to move into Phase 1 in 2022, along with ongoing business development initiatives.

Thank you. Our next question comes from Andrew Tsai with Jefferies. Please proceed with your question.

Thanks, and good morning. A couple more questions on 007: Sounds like you see promising signals around ERP biomarker data, so maybe P100, P300. Can I assume you're seeing a trend around P300 reduction? If so, how much benefit does P300 show for other drugs that benefit cognition in schizophrenia? Just some context would be helpful.

I don't want to oversell what we're seeing; there are only eight subjects in this initial cohort, so it may be early to get into details. Our primary focus is the spectral shifts and replicating results from previous trials. Once we have the data together, we’ll give you context and comparisons to other compounds.

Makes sense. For the end data, can you confirm how many dose cohorts' data we are getting? Did we analyze the lowest dose cohort for interim results? Should we expect some dose response?

There are four cohorts, and we did focus on lower doses as they correlate with specific outcomes. We're not following a linear ascending sequence due to the compound's known safety profile.

Thank you. Our next question comes from Esther Hong with Berenberg. Please proceed with your question.

Good morning. Thank you for taking my questions. On the Phase 1 dose-ranging trial for intranasal NAC or mTBI, what are your expectations for this study? Are you looking at any biomarkers?

The trial was pushed back, primarily due to biomarker assessments. We're looking at MRS for alterations in NAC levels and glutathione within the brain. This requires specialized equipment and personnel, which caused delays. We’re now running it in the U.S. under an IND, and we felt more comfortable doing this than previously considered locations.

Our next question comes from Brian Abrahams with RBC Capital Markets. Please proceed with your question.

Hi there, good morning. Regarding 917 deuterated etifoxine, can you expand on the learnings from the single ascending dose study? In particular, any insights regarding PK's potential impact on dosing frequency compared to the non-deuterated?

At this time, there isn't much detail shared on the single ascending dose data. We are still analyzing data before making any conclusions. We expect exposure to be enhanced, potentially indicating a higher exposure resulting in stronger qEEG signals with GRX-917.

Understood. How does the half-life compare for the deuterated versus non-deuterated version?

Again, we don't have all the data yet. I don't want to provide anything until we analyze everything and can speak to it comprehensively.

You've addressed activity concerning business development. Can you talk about the types of deals you foresee? Will they focus more on enabling technologies, platforms, or products? Where do you expect to allocate the next dollars?

Happy to address this, Brian. We are exploring numerous areas and anticipate remaining active across all of them. We believe in the complementary impact of digital therapeutics. We plan to invest more in that area, which closely ties to data necessary for precision psychiatry. Further, we see potential in enabling technology and anticipate adding more diverse treatments to our existing pipeline.

I appreciate the insights. A question about financials regarding the base SG&A spend. How might we assess the SG&A run-rate going forth? How will the mix of R&D and SG&A evolve?

In terms of stock-based compensation, there was a spike in Q2 tied to our IPO, thus the drop to $12 million in Q3 reflects a normalized run-rate. We expect increases in R&D while G&A stabilizes. We're still building out our headcount to support R&D and G&A as needed.

Thank you. Our next question comes from Elemer Piros with ROTH Capital Partners. Please proceed.

Good morning, and thanks for the questions. With the recent focus on COMP360, Srini, how might your other depression programs complement psilocybin-based therapies? If all four were approved, how would they be used differently?

The pharmacological mechanisms of several of these compounds differ from DMT or psilocybin. R-ketamine acts on the glutamatergic pathway, while Salvinorin A focuses on the opioid receptors. We anticipate using these different pharmacologies to target different subsets of the TRD population. The R-ketamine assay is intended for at-home use, while others will be used differently. The DMT compound is also designed to fit into the existing S-ketamine infrastructure, providing shorter duration for more complex dosing.

Do you foresee potential combinations of compounds or sequential administration for the same patient?

That's an interesting prospect. Each patient may have a different journey; using one compound to induce and others for maintenance could be beneficial. While this would need to be designed carefully, the idea is definitely feasible.

Good morning, and thanks for taking my questions. On PCN-101, when do you expect to be more comfortable around it being used at home? Or is this more of a wait-and-see until approval?

That really depends on data from the Phase 2a. We've seen promising results with the 30 and 60 milligram doses being less dissociative than S-ketamine. However, things may differ in a patient population. It certainly informs decisions as we move forward.

On DMX-1002, what do you qualify as success after the Phase 1/2a results considering ibogaine's established safety profile?

We will look at the standard safety and tolerability parameters within a rigorous trial we're conducting. We need to ascertain the resolution of intoxicant effects and monitor ECGs to understand any cardiovascular impacts, which will guide dosing for Phase 2.

In terms of strategy, have you begun to see any effects from COMP360 Phase 2b data on discussions or interest in your assays among potential partners?

It’s early days, so no direct impact on discussions yet. However, it is encouraging and validating for all the work we're doing.

Hi, thank you. This is Jason speaking for Patrick. I have a question on RL-007. Can you describe the mechanism of action for RL-007? What sets it apart from other compounds being developed for CIAS? How will the Phase 2 trial further validate its differentiation?

The pharmacology compound is quite complex. It binds differently than traditional compounds; we’re assessing receptor interactions through antagonism. The various effects at different doses lead to broad potential benefits without common GABA agent side effects. The diverse pharmacological approach makes it different from the GABA-glutaminergic compounds. I believe several of these compounds can co-exist to meet the medical need.

Thanks very much.

Our next question comes from Nathan Weinstein with Aegis Capital. Please proceed with your question.

Good morning, ATAI team. A question on COMP360. The rapid onset confirmed in the Phase 2b highlights potential benefits of psilocybin in acute care. What's your view on how this could be beneficial for patients in emergency mental health settings?

That’s certainly a rational perspective. The rapidity of onset could potentially bring this compound into emergency settings, similar to S-ketamine's suicidal indication.

On the digital therapeutics, can we discuss regulatory perspectives on integrating these programs? How has receptivity been for the FDA or European authorities?

The elements we've discussed have undergone regulatory review. As for combination products, we have not had specific discussions with the FDA yet, however, general concepts have shown while the EMA seems to have a slower approach. The foundation in regulatory terms has been established. I appreciate everyone joining today, and thank you for the engaging questions. It’s been a pleasure sharing our latest highlights and insights. Our focus remains on encouraging developments across our pipeline, supported by our innovative approaches with holistic digital tools. We are committed to addressing the diverse mental health needs of a wide array of patient populations. Thank you again, and have a great week.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.