Peter Thiel backs ATAI’s psychedelics mission in $125 million round

Peter Thiel

Adam Jeffery | CNBC

LONDON — Billionaire tech investor Peter Thiel has backed a Berlin start-up aiming to make psychedelic drugs to treat mental health disorders in a $125 million funding round.

ATAI Life Sciences, which describes itself as a drug development platform, was set up to acquire, incubate and develop psychedelics and other drugs that can be used to treat depression, anxiety, addiction and other mental health conditions. The company — founded in 2018 by entrepreneurs Christian Angermayer, Florian Brand, Lars Wilde and Srinivas Rao — announced the funding on Monday.

“ATAI’s great virtue is to take mental illness as seriously as we should have been taking all illness all along,” Thiel, who co-founded Palantir and PayPal, said in a statement shared with CNBC. “The company’s most valuable asset is its sense of urgency.”

Thiel made a 10 million euro ($12 million) investment in ATAI through his venture firm, Thiel Capital, while the rest of the series C funding round came from Apeiron Investment Group (Angermayer’s family office), Catalio Capital Management, Future Ventures, Galaxy Investment Partners, Falcon Edge Capital, and Pura Vida.

Total investment in the company now stands at over $210 million.

ATAI, which has roughly 35 staff in offices across Berlin, New York and San Diego, is currently partnered with around 10 drug development companies. In exchange for a majority stake in the drugs they’re developing, ATAI helps the scientists to raise money, work with the regulators, and conduct clinical trials.

None of ATAI’s drugs have been formally approved by regulators to date.

There is growing interest in certain psychedelics after recent clinical studies suggested that some could help patients with a number of mental illnesses, either in combination with traditional solutions or in cases where nothing else has worked.

“The current treatments (for mental health issues) which are out there are definitely not sufficient,” company co-founder Angermayer told CNBC via Zoom ahead of the announcement. “I don’t want to say they don’t work as all because some people are helped by them but they’re not sufficient.”

Almost a billion people suffer from mental health problems worldwide, according to the World Health Organization. Of the 322 million people globally that have depression, roughly a third are treatment-resistant, according to fellow company co-founder Brand.

ATAI said it will use the new funding to pay for the clinical development of drugs that ATAI has already backed. This includes ar-ketamine, which is being developed at Perception Neuroscience for treatment-resistant depression, and ibogaine, which is being developed by DemeRx to treat opioid addiction. The funding will also be used to identify new drugs and support their development.

Earlier this year, the U.S. Food and Drug Administration approved Johnson & Johnson’s ketamine-like nasal spray for depression and there are a number of other start-ups trying to get psychedelic drugs to market including MindMed and Beckley Psytech.

Psychedelic trips

Angermayer said that people “meet themselves” when they have a psychedelic trip. “Since we’re born, society imposes on us how we should

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Psychedelics startups racing to go public: Compass, Havn, Field Trip

  • There is a “psychedelics renaissance” in motion, according to insiders in the industry, as shown by a rush of investor dollars and a number of public market debuts.
  • Some of the investors and banks working in psychedelics are the same ones who were involved with the cannabis boom and subsequent bust.
  • Despite the similarities, psychedelics insiders say that there are stark differences between cannabis and psychedelics.
  • Business Insider spoke to five industry insiders, from company CEOs to investors. They said they don’t see psychedelics facing the same pitfalls that befell the cannabis industry.
  • Subscribe to Insider Cannabis for more stories like this.

The psychedelics industry is booming.

Compass Pathways, a London-based psychedelics giant, raised $146.6 million in its US initial public offering last month, and is valued at more than $1 billion. Psychedelics companies Field Trip Health and Havn Life Sciences recently started trading in Canada, following MindMed, which secured a Canadian listing in March.

Meanwhile, the psychedelics industry is drawing attention from biotech investors, as well as from cannabis companies looking for fresh opportunities.

The total market for psychedelics-related medicines could eventually reach $100 billion, according to a report from Tania Gonsalves at Canaccord Genuity. Companies are working on psychedelics-based therapies for treatment-resistant depression, cluster headaches, opioid use disorder, smoking cessation, and PTSD among others, according to the report.

Ronan Levy, the founder and executive chairman of Field Trip, which is focused on setting up treatment clinics and on psychedelics-based drug development and manufacturing, called the uptick in investor interest and funding a “psychedelic renaissance.”

A focus on the importance of mental health has gone mainstream, Levy said. Other factors driving the boom include increasing research on psychedelics, big-name investors like Peter Thiel coming on board, skepticism around big pharma, and the headway that cannabis has made in challenging preconceived notions of drugs, he said.

The psychedelics boom has some parallels with the cannabis bubble

Levy’s firm started trading on the Canadian Securities Exchange on Oct. 6. Cannabis-focused asset manager Silver Spike Capital and Harris Fricker, the former CEO of GMP Capital, invested in the company before it went public.

GMP Capital is a Canadian investment bank that advised cannabis companies including Canopy Growth. Its capital-markets business was acquired by Stifel Financial in December 2019. Other Canadian investment banks that work with cannabis companies, such as Canaccord Genuity and Eight Capital, are now starting to advise psychedelics companies as they gear up to trade publicly.

“I think you have a lot of people who have seen what has happened in the cannabis industry from a capital markets perspective, seeing psychedelics as an extension of it,” said Levy. “You have a lot of people who either made a lot of money or were very interested in the cannabis industry, seeing the cannabis industry going through a bit of a trough from a valuation perspective and a reputational perspective and they’re looking for another great opportunity.”

Though there are some parallels between cannabis and psychedelics, they don’t run as deep as

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