Atai Life Sciences N.V. (ATAI) on Q3 2021 Results - Earnings Call Transcript
Operator: Good morning. And welcome the ATAI Life Sciences Third Quarter 2021 Financial Results and Corporate Update Conference Call. Currently all participants are in listen-only mode. This call is being webcast live via the News & Events section of the company's website at www.atai.life and is being recorded. For opening remarks I would like to introduce Chad Messer, Vice President of Investor Relations and Strategic Finance of ATAI Life Sciences. Please go ahead.
Chad Messer: 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 at www.atai.life and our quarterly report on Form 10-Q ended September 30 2021 will file today with the SEC. 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. Your 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.
Florian Brand: Good morning. And thank you all for joining our 2021 third quarter earnings call today. To begin now, 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 and mental health. In addition, we anticipate further growing our drug development pipeline and enabling technologies through 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 come through 16. It demonstrated rapid onset of effects and your ability 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 entering 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, we still have no approved treatments. As for our discovery stage assets, earlier this quarter, we announced the launch of PsyProtix, precision psychiatry company focused on developing therapeutics for mental health indications. PsyProtix will study metabolic mechanisms associated with depression symptoms with a 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 accepting 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 Cyber 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 Viridia, COMPASS Bio and Revixia and Revixia IB. 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.
Srinivas Rao : 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 ladder is a proprietary formulation of synthetic psilocybin, of 5HT2A receptor agonist being developed as an oral potentially rapid acting antidepressant. We'd like to offer a huge congratulations to the COMP60 team. Last week COMPASS in which we own a strategic stake of 19.4% and as 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 patients 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 a COMP360 treatment resulted in a rapid response with statistically significant changes in the MADRS noted a 24 hours post-dose. When comparing results, with 25 to the 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 academy will be conducted across multiple sites in Europe and the U.S., enrolled of 93 patients diagnosed with TRD. We anticipate the study running 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-101one 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 academy may be efficacious at sub-dissociated doses in contrast 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. An 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 that are being tested in the Phase 2a trial. In April 2021, the 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 improve verbal memory and partially restored the shifts in qEEG spectral power induced by scopolamine. Of note the results of a recently completed interim analysis a qEEG data from the eight patients in the first cohort were encouraging. We observed spectral shifts the qEEG there were similar qualitatively and quantitatively to what were previously seen in the scopolamine challenge trial. As a result, ATAI advance 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 as a METRICS battery. We expect to announce top-line results as a Phase 2a trial before the end of the year. And we will be reviewing a confluence of data including spectral shifts on qEEG evoked potential information and changes and measurements of cognition to help us support a decision so you can use it the clinical advancement of the stroke candidate. Next GABA therapeutics primary program is GRX- 917 an oral formulation of a deuterated version of that 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. Further at a etifoxine has an extensive safety database, which we believe will greatly the risk of future developments GRX-917. Like etifoxine we hypothesized 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 and or low doses with GRX-917 been at etifoxine. In June 2021, we initiated a randomized double-blind placebo controlled Phase 1 trial in Australia with planned enrolled up to 76 healthy adults. The study is a single ascending dose, multiple ascending dose design, focusing on safety and tolerability, pharmacokinetics as well as 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 we're 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 was recently completed, and the multiple ascending dose component of alpha 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 IB. We're 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 and 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 is created and pharmacologically tested over 250 novel compounds generated by this platform. Lead candidate selection is currently ongoing, which will further bolster 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.
Greg Weaver : Thank you, Srini. ATAI continues to maintain its excellent cash position, with cash and equivalents totaling $430.3 million as of September 30, 2021, as compared to $453.6 million as of June 30, 2021. The 2 months net use of cash of $23.3 million was 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 in the quarter. And 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 as compared to $61.3 million in Q2. The decrease in total OpEx of $27.7 million was driven primarily by a decrease in the non-cash stock based compensation of $25.5 million as compared to Q2. In addition, looking back in Q2 we recorded acquired one time in process R&D expense of $8 million from our initial consolidation of neuro Neuronasal. These decreases were offset by an increase in R&D expenses, excluding the stock based comp of $1.1 million from $6.9 million in Q2, to 8.1 in q3, as we added R&D personnel and advancements in our clinical programs. The increase in G&A expenses excluding stock based compensation of $4.8 million from 8.7 in Q2 to $13.5 million in Q3 was due to growth in our G&A costs related to personnel and benefits, and D&O insurance, all related to building and operating a ATAI as a public company. And a brief comment regarding the decrease of $25 million in stock based compensation was that in the current Q3 total of $12.2 million in stock based comp represents the run-rate of normal vesting conditions going forward. Thanks again, I'll hand the call back to Florian.
Florian Brand: 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 4 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 4 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 within mental health. Our differentiated model has been validated by partnerships with large pharma and academic institutions. By designing our company is structured to maximize the probability of success in drug development, the combination of 3 elements the unique portfolio approach, that focus on developing compounds with prior evidence in humans, and the milestone-based approach to capital allocation. We're pleased with our progress in Q3 and look forward to the 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 and our progress as we continue to drive our business forward. With that we are happy to take questions.
Operator: Thank you. At this time, we'll be conducting a question-and-answer session. Our first question comes in the line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.
Charles Duncan : 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. And specifically -- really what could be a win out of the upcoming Phase 2a. And it sounds like -- I'm some wondering if that's a nice to have not a need to have in terms of designing of Phase 2b? And can you imagine being in Phase 2b in the second half of 2022? And then I'd like to ask you about the color -- any color that you can provide on the 8 patients in the first cohort. Any further information in terms of the observation spectrum shifts that you saw?
Srinivas Rao : Yeah. Thanks, Charles. So, as I've discussed on previously. Basically, there were a couple of things that we're looking for in the Phase 2a. The first sort of tier was spectral shifts of quantitative-EEG there were qualitatively and quantitatively similar to what was observed previously in the scopolamine challenge Phase 1 trial. The next tier down from that, if you will were the evoked potential. So we looked at mismatch negativity, in P170, and P300s with an oddball task. And the final sort of tier are the cognitive assessments, specifically really focusing on verbal memory but also sustained attention. So those are sort of the three tiers I will say, right off the top. This trial really wasn't set up or designed adequate -- power to in terms of size for cognitive -- to truly assess robustly the cognitive impact of the compound. What we're really looking for, there is some sort of correlation with some other marker. So the first 8 patients did show quantitative-EEG results. These are the spectral power shifts that were comparable to what we saw earlier. And that's what we found encouraging. And that's, of course, what led to the advancement of primary portion of the milestone to get the next trial up and running a little bit sooner and hopefully save us about a quarter. Obviously, we'll be looking at the totality of the data from all 4 cohorts before making go no go decision on that next trial. We haven't guided on -- yeah, go ahead.
Charles Duncan : No, I'm sorry. I think that you were going to address the timing question.
Srinivas Rao : Yeah, we really haven't guided on that to be honest with you. But I mean, we said broadly that once this trial wraps up, we'll be starting another trial.
Charles Duncan : Okay. And then one additional question, and I'll hop back in the queue, and that is on COMP360. I saw the data here recently and know that you have at least 2 or 3 other programs in depression. And I guess I'm wondering if the results impact your assumptions in any way, regarding the sizing or timing, or control paradigm for further studies in treatment resistant depression. And maybe, I guess I'm wondering what you think about the primary endpoint of 3 week efficacy versus durability. Any further color on your impressions from that COMP360 trial?
Florian Brand: Yep. Thanks, Charles. Before I hand it back to Srini, maybe let me quickly take the opportunity to again, congratulate the entire COMPASS team philosophiques data readout. So that was a really quick moment for us. As you know, COMPASS was the very first company that we funded in this space. And we perceive this as greatly validating for their psilocybin assisted therapy. But also for to your point, the other psychedelic assisted therapies that we have in development. So on all last week, it was greatly encouraging for the COMP360 data, but for psychedelic approaches in mental health with large. And with that, Srini, maybe you want to comment a little bit further on the details.
Srinivas Rao : Yeah. So Charles, addressing your first point around design. I mean, it certainly -- these are some things that we'll be looking into and all that more detail. There are some fundamental differences with what we're doing versus what COMPASS did. I mean of course, psilocybin is very long duration psychedelic effect compounds that we're designing are much shorter. And of course, this question of how duration of psychedelic effects impact durability is something that's been open at this point. Our trials were always configured for redosing. And I think that's an important element, we're going to be figure -- ultimately we want to use digital therapeutics to help guide those redosing decisions so that there's some flexibility. I obviously can't speak to how conference is going to approach this. So in terms of the big picture, I would say the design hasn't fundamentally changed. But obviously, there'll be a lot of detailed learning as we pick through this. As we pick this data and more data becomes available to us. In terms of the 3 weekend point, I think that was a pretty reasonable endpoint. And again, let's be honest the trial COMPASS really now that 3 week endpoint. Particularly when you start comparing it to some of the S-ketamine data, you're familiar with the approval package for S-ketamine, it really looked at 3 shorter term trials 4 week trials that were known as TRANSFORM I, II and III. TRANSFORM I and II actually failed TRANSFORM II was the one that was really the basis of approval in terms of the short term efficacy and they had a much smaller, least squares mean change in MADRS of 4 as compared to 6.6 on ours. So over 50% increase in the size the magnitude of the response. And of course, ours is based on a single administration, whereas S-ketamine is 2 administration's per week. That's how the trials were configured as well. So the stance really improve logistics for this study and for COMP360 versus S-katamine. Thanks for the added color. Congrats on the progress.
Srinivas Rao : Thank you.
Operator: Our next question comes from the line of Neena Bitritto-Garg with Citi. Please proceed with your question?
Neena Bitritto-Garg: Hey, guys, thanks for taking my question. So just on the Perception Neuroscience update. Can you talk a little bit more about the bridging study that you're planning on conducting for the subcutaneous dose? And when we could see data from that study? Thanks.
Srinivas Rao : Yeah. So as you're aware, the current trial is using an IV formulation of R-ketamine. This is very comparable to how Jansen conducted their S-ketamine program. The initial trial was really based on an IV formulation. Of course, as I mentioned in parallel, we are doing the bioavailability study that is fundamentally looking at the PK of this IV formulation, which is a 40-minute infusion versus subcutaneous formulations that were -- that are in development now. And the idea, of course is to try and match as closely as possible the IV infusion profile, the PK within sort of the bioequivalence limits I mean, broadly speaking. So we want to make sure that it's on markedly shorter, that you're not seeing more pickiness, et cetera, that could impact both safety and efficacy. In terms of when those endpoints -- when those results are anticipated. It's roughly contemporaneous with the Phase 2a results.
Neena Bitritto-Garg: Okay, perfect. Thank you.
Operator: Thank you. Our next question comes from the line of Ritu Baral with Cowen & Company. Please proceed with your question.
Ritu Baral : Good morning, everyone. Thanks for taking my questions. I've got at least 2. Just following up on Neena’s question on 101. And I guess the PK. First, I guess starting with the Phase 2, what's the scale that's going to best form magnitude of disassociated effect and potential sort of separation from this pharmaceutical provider profile? And then Srini, as you talk about that PK impacting from the subcue and what you want to see, how should we be thinking about sort of peaks and area under the curve as far as the dissociative side effects versus efficacy? Like if you bring the peak down could you improve -- could that be one of the reasons that there would be less disassociation? But is there a fear that that contributes to efficacy? How should we be looking at that PK curve? And then what scale should we be looking at two separate 101 from its competition?
Srinivas Rao : Yeah, that's a great question. So in terms of the scales, of course, we're going to be looking at the . So it seems to be the scale of choice for a lot of these trials. Of course, it's what was used in a number of the ketamine studies as well as in the and of course in the S-ketamine label. There are some challenges with the kets. I mean, its resolution is not great. So we're also looking at things like the and the BPRS. So those are the other trials that are -- I mean, the other instruments that are really thing that we're focusing on. In terms of this question around AUC versus peak et cetera. That's a really good one. I mean, assuming that we see the efficacy that we're hoping for with this next trial, our initial plan is really match that as closely as possible, rather than deviating too far from it. One would anticipate that higher peak would probably result in increase or decrease in tolerability. But how that impacts efficacy is a little bit more difficult to really assess a priority. Again, our goal is to really try and match as closely as possible the current PK profile.
Ritu Baral : Got it? And my follow up is on deuterated etifoxine 917. You mentioned that you're looking for, again, qEEG spectral shift in the beta band. Can you talk to what percentage shift in the beta band has been seen from the other GABA-ergic drugs? What's the threshold that you're looking for? And you mentioned that the single ascending dose data would be available I think early 2022. Should we be able to see it in the single dose? Or would that be from the multiple ascending dose portion?
Srinivas Rao : Yeah. So on the first point, we're not really giving a lot of detail in terms of the magnitude of spectral shifts. I mean, we are looking for robust changes in spectral shifts there. And I mean, that's basically as much as we're saying at the moment. I don't think we've really ascertain, when we're going to be releasing which data? Yes, the SAD data -- the SAD component of trial is wrapped up. The quantitative-EEG data will be coming from both the SAD elements and the MAD element. And in fact, the MAD forms are a bit of a replication sample for the SAD data. I think we'll probably end up waiting for both before going into any kind of detail on these results.
Ritu Baral : Got it. Thanks for taking the questions. I'll hop back in the queue.
Operator: Thank you. Our next question comes from Judah Frommer with Credit Suisse. Please proceed with your question.
Judah Frommer : Yeah. Hi, thanks for taking my questions. First, I was just hoping we can maybe back up a little bit on 007. We've got a few questions, just maybe unpacking the design of the Phase 2a trial? Kind of, we're next steps in terms of the cognitive endpoints that you'll be looking at always kind of designed within the plan. And once you get those is -- when you talk about kind of the decision making point, is that an incremental 2a versus a 2b? Or how should we think about that?
Srinivas Rao : Yeah. I think let's take that first -- the last question first. So in terms of what the next trial looks like, where we're still trying to figure -- we're still working on it, to be honest with you. Well, the way I interpret 2a versus 2b, 2b could be supportive of an end of Phase 2b meeting and again, that's kind of where some of the decision making lies. I didn't quite understand the first question. Clearly, we will be using parts of the METRICS battery, the consensus battery in terms of endpoints. And maybe the entire thing, it may just be parts of it. These are some of the considerations that we're focusing on now. There are some pretty important design considerations that we're still working through our course durability or duration of efficacy is something else that still under consideration.
Judah Frommer : Okay, and do you have size of the active and placebo arms in the next portion?
Srinivas Rao : We will have placebo. Yes.
Judah Frommer : Okay. Do you know how many patients are?
Srinivas Rao : Not yet, no. It's going to depend entirely on the design?
Judah Frommer : Yeah, got it.
Srinivas Rao : And of course, part of it is really getting a good handle on what we're seeing in terms of some of the effect sizes of this trial. So at least that will give us some color around what we can expect and that's going obviously drives some empowering decisions.
Judah Frommer : Okay, perfect. And then on GABA. This may be just a housekeeping item, but I think in Phase 2, you had talked about expecting Phase 1 data early 2022, now made 2022. Did anything change in terms of recruiting timelines or impacted by COVID in any way?
Srinivas Rao : Yeah. Well you hit the nail on the head on that one. So we did -- recruitment was a lot slower than we anticipated all the way through the trial. I mean, if you think about Australia, they do depend on students for these trials. They also depend on folks that are kind of travelling through both of these were heavily curtailed during some of the lockdowns that they had. So things definitely did slow down, there's a bit of a bit of a clearing of backlog that's occurring at the site at the moment. So, we're obviously pushing very hard to get our cohorts in sooner. But, we just decided that it makes sense to be on the conservative side and push out the guidance a little bit.
Judah Frommer : Got it. Okay. And last one, just on kind of a cash runway tied to the pipeline programs that you have. How should we think about I guess prioritization of cash towards various programs. You'll want to get presumably these programs that are that are further along as far as they can get -- as you get toward the end of that cash runway. But is there any way to talk about prioritization amongst the programs you've highlighted today?
Greg Weaver : Yeah, thanks, Judah. Greg Weaver? It's a good question. We give a lot of thought to the allocation of the cash for going forward. Keep in mind, we have runway now at $430 million, right through ‘22 and ‘23. And we're in the planning stages right now in Q4, like most companies laying out details around our debt 2022 priorities. But I think it's safe to say we're going to continue to drive on all fronts. We've got a very strong balance sheet. No reason to think that we'll be deprioritizing anything. I think we're going to continue to push on the Phase 2 programs, several moving into Phase 1 in 2022 along with as Florian mentioned earlier, BD continues to be an area of focus for the company, will continue to push on that trend as well. So in my words, the pedals to the metal.
Judah Frommer : Got it. Thank you.
Operator: Thank you. Our next question comes from Andrew Tsai with Jefferies. Please proceed with your question.
Andrew Tsai: Thanks. Thanks. And good morning. So on 007 one more question is just, sounds like there's also a quote unquote promising signal on ERP biomarker data. So maybe P100 P300. So, I guess the first question is, is it fair to assume you're seeing some kind of trend around, say P300 reduction? And secondly would be, perhaps give us some context how much benefit P300 for instance, shows for the other drugs that do benefit, cognition or even schizophrenia? Just some framework would be helpful, thanks.
Srinivas Rao : Yeah, I don't want to oversell what we're seeing at the moment, in terms of -- this from the first cohort as I mentioned. There's only 8 subjects. And, again it's a little -- it's a little early to really get into the details. As I mentioned, we're really focused on the spectral shifts, and replication of the results from previous trial. So that's really what we focus on the first goal. We will look at the entirety of the data at that point. We've got a really good advisory for it, we'll give you giving us some color on how to proceed and how the magnitude of the changes that we're seeing really compared to other compounds across both sets of potentials, the mismatch negativity as well as the P100 and P300 as part of the test. So, again, I don't think we're really in position to get into the details about just yet, once we have results and the data.
Andrew Tsai: Make sense. Thanks. And so just thinking about your end data, I guess can you confirm how many dose cohorts of data we are getting? Fair to assume you looked at the lowest dose cohort and the interim look? And then should we expect some kind of dose response? Thanks.
Srinivas Rao : Yeah, so this is actually up on Clinicaltrials.gov for those that are interested. But essentially, there's 4 cohorts here. And some of you may have heard, I'm really -- we're really looking at the lower doses, because in both animal data -- in animal models and in humans, so far the lower doses are the ones that are primarily associated with or precognitive effects, whereas the higher doses were really more focused on analgesia. So that's what we're looking at and some details of 10, 20, 40 and 80. We didn't follow a linear sort of typical ascending sequence, just because of the very well-known safety profile of this compound. So we did look if the higher dose first and we're going to backfill with the lower doses. We are then going to be doing some -- we are definitely looking at correlation of course and seeing go on. But once again really don't have that data, those results yet to kind of talk about it.
Andrew Tsai: All right, thank you. Thanks for all the color
Operator: Thank you. Our next question comes from Esther Hong with Berenberg. Please proceed with your question.
Esther Hong : Good morning. Thank you for taking our questions. I just want to focus on the Phase 1 dose ranging trial for intranasal NAC or mTBI. That data is expected before the end of this year. What are your expectations for this study? And I believe the trial is also looking at biomarkers, which biomarkers are there -- or you're looking at? Thank you.
Srinivas Rao : Thanks, Esther. So that trial did get pushed out in time. There's a couple of reasons for that, most important is the biomarker. So we are looking at MRS, Magnetic Resonance Spectroscopy. And we are looking for alterations in and acetyl cysteine levels within glutathione levels within the brain. As it turns out, that's a very specialized -- it takes specialized equipment, it also takes a lot of personnel with a great deal of experience to do this adequately. And we did pull on board, someone who is a imaging specialists are really within the ATAI teams really helped us -- to kind of help this trial along. In the end, we decided to bring this trial to the United States and run it under an IND. The sites that can do this -- ultimately we looked at several different countries, including Australia and New Zealand and ultimately just ended up concluding that we were most comfortable in bringing this back to the United States and hence the delay on this switching in particular.
Esther Hong : Thank you so much for your answer.
Srinivas Rao : No problem.
Operator: Our next question comes from Brian Abrahams with RBC Capital Markets. Please proceed with your question.
Brian Abrahams : Hi, there. Good morning. Thanks for taking my questions. Maybe starting off on 917 deuterated etifoxine. I was wondering if you could expand a little bit on your learnings thus far from the single ascending dose study. And I realize it's early days, but I guess curious on the on the PK, kind of what you're seeing with respect to deuteration’s potential impact on future dosing frequency? If you have confidence based on what you're seeing that you can get to 1 or 2 times a day dosing. What you're seeing with regard to safety relative to the non-deuterated? Were -- obviously there's a nice, large safety database. And then maybe following up on Ritu’s question on the quantitative-EEG. Realized it's again still early, but do you have any sense of whether or not you might be able to get to a place that's -- with multiple doses that's equivalent, or even better than what's been seen with the non-deuterated form or with allopregnanolone? And then a couple of follow ups? Thanks.
Srinivas Rao : Yeah. I mean, again, I there's really not a lot that we're sharing on this particular on the SAD element at the moment. We're still analyzing all that data. And we'll put it all together. And, of course, we're also awaiting the MAD results, to go into pieces all together into a coherent story. Certainly, the expectation that we have is that, because we will be able to push those as higher, certainly exposure is higher. We may very well see an increase in quantitative-EEG signals over that which is seen with etifoxine itself. And maybe approaching what you see with a direct agonist like allopregnanolone, but we haven't got that data to really be able to provide any color.
Brian Abrahams : Okay. Now, that's fair enough. And I guess how does the half-life compare for the deuterated versus non- deuterated form?
Srinivas Rao : Again, we don't have all of the data in hand yet. Sorry, I really don't want to provide anything until we have that and can speak to it in totality.
Brian Abrahams : Got it. Okay. And then, you've talked a lot about the expectation to remain very active in business development. I was wondering if you could maybe talk a little bit about the types of deals that you envision doing going forward. Will these be more along the lines of enabling technologies, platforms and product? Where do you see sort of the next dollars being spent on that front in terms of expansions?
Florian Brand: Yeah. Sure. Happy to take this one, Brian. So, you mentioned some of the areas that we are active in and we anticipate to remain very active and all of those. So we truly believe in the potential of the complimentary benefit of digital therapeutics. So we anticipate to do more -- to invest more in that area, which is also clearly linked to data which will ultimately be needed in our perspective to tailor the therapies much more to the patient needs, with moving towards a precision psychiatry approach. This area will be or is and remains of high interest to us. In addition, on the enabling technology side, we also see potential there to add more complementary approaches. So having very, very interesting discussions here. And ultimately, we truly believe that there's no one size fits all solution and mental health. We truly believe that we will need a great array of tools and treatments in this area. Hence, we also see a great potential to add further treatments and therapies to our existing drug development pipeline.
Brian Abrahams : Got it. That's really helpful. Maybe one more for me if I could. I guess a question on the financials for Greg. You talked about kind of the base SG&A spend. I was wondering, how should we think about the base SG&A run-rate going forward? And how the mix of R&D and SG&A may evolve as the company continues to grow, but also the clinical trials in advance. And then, I guess also, along those lines, you talked about the components of stock-based compensation. And that we're sort of at a normalized run rate now this quarter relative to last for best things. Is this relative -- a run-rate relative that we should be thinking about -- relative to overall spend? Because the proportion does look to be a bit on the higher end of peers? Or should we think about this more as an absolute run rate where the magnitude relative to OpEx will, I guess, decline as OpEx grows and the company matures? Thanks.
Greg Weaver : Thanks, Brian. The couple things there to unpack. Let me take the last one first. If you recall, back in Q2 -- excuse me. We had a spike in investing related to our IPO in non-cash stock comp. So that dropped significantly in Q3 so that the $12 million number. I'm anticipating while it's lumpy quarter-to-quarter is more indicative of what we'll see going forward. Not so much on a percentage basis, but as a benchmark for guidance going forward non-cash stock comp. In terms of the actual OpEx in R&D and G&A, I think over the quarters ahead, we'll see an increase in R&D and I think a more of a normalization of G&A. So a couple of couple of concepts there to consider. One is, if you reflect back on just headcount, we started this year 2021 with maybe 30 to 40 employees. And we've doubled that this year, anticipating that that'll continue to increase as we build out our capabilities internally both focus on R&D, and the G&A. So I think the -- while it’s more heavily weighted initially on G&A, I think that'll be more in balance as we go forward. And so, a stop short of specific guidance as we're building out the game plan for 2022 right now. But that would hopefully be helpful.
Brian Abrahams : That's super helpful. Thanks again for taking my questions.
Operator: Thank you. Our next question comes from Elemer Piros with ROTH Capital Partners. Please proceed with your question.
Elemer Piros : Yes, good morning. Thank you for taking my questions. With the focus on COMP360, last week, Srini, I was wondering if you could tell us how your three other depression programs might complement psilocybin based therapies and you already started talking about R-ketamine. But if you could, perhaps further elaborate if god forbid all 4 would get approved, how would they be used differentially?
Srinivas Rao : Well, certainly the pharmacology of several of these compounds are different than that of DMT or psilocybin. So R-ketamine is glutamatergic in nature, Salvinorin A has the opioid-based mechanism or cap-opioid based mechanism. And so we anticipate -- and this is a hypothesis but we anticipate being able to pick up different subsets on the TRG population using pharmacology. And that's obviously an important element. As we've discussed, the R-ketamine assay is intended for at home use. The other assays we would anticipate being used on how -- without an inclining basis. So in that sense, there are some internal points of differentiation as well. The DMT compound in many ways is designed to kind of slot into the infrastructure that's being deployed for S-ketamine currently. So it's a much shorter duration compound we anticipate more we're dosing with compared to psilocybin. Obviously, the logistics are a little bit simpler when the compound has a shorter half-life. And we intend -- we also are developing it in combination with our digital therapeutics, both software and hardware based really to support the site and physician to simplify the administration of the cost of opioid -- I mean, sorry cost of psychedelic in this context.
Elemer Piros : Okay. Do you envision a combination or subsequent administration of these various compounds in the same patient?
Srinivas Rao : Yeah, that's a really interesting question. Of course, there's different patients, but there's also different points in the patient's journey. One can certainly think of an induction and maintenance type approach for some of these. For example, could you anticipate using psilocybin first to really get the patient over the hump as it were, and then looking at shorter acting compounds, whether they're DMT or R-ketamine? Certainly, that's all within scope. Will they be developed to such, probably not that that tends to be a very complex development program. But in real world, I can totally imagine how these things would be put together for individual patient benefit. And again, we are looking at biomarker strategies. The digital biomarkers or biological biomarkers, including metabolomic profiling, we did announce by products for example, in that regard. And hopefully the data from this will also help inform which compound is best suited for which patient and perhaps when given compounds is best suited for a patient, again based on the patient's journey.
Elemer Piros : Thanks so much Srini.
Operator: Thank you. Our next question comes from Sumant Kulkarni with Canaccord Genuity. Please proceed with your question.
Sumant Kulkarni : Good morning. Thanks for taking my questions. I have 3 a couple of product specific ones and one on strategy. First on PCN-101, at what point do you expect to have more comfort around the potential for the products at home use? Or is that more of a wait and watch until the approval kind of thing? That's my first question.
Srinivas Rao : I think that that will really occur once we have these data from the Phase 2a. So as I mentioned in the call, we have the 30 and 60 milligram doses that were taken forward. We did provide color on those, you can see that those were either non-dissociative completely or minimally dissociative and quite different than what you see with S-ketamine. Obviously that was in the healthy volunteer population, things tend to look a little bit different in patients. So we're looking forward to those data in that trial that's really going to help drive some decisions.
Sumant Kulkarni : Got it.
Srinivas Rao : Least surprising however, if the 30 milligram dose is profoundly dissociative, given what we know about the compound.
Sumant Kulkarni : Understood. On DMX-1002, with your Phase 1/2a study results that are due in early 2022. What would you qualify as success especially relative to what we know already about the safety profile of ibogaine?
Srinivas Rao : Yeah, so we're characterizing a few things. Obviously, the normal sort of safety and tolerability parameters doing this in a very robust and rigorous trial, that's obviously important in making sure that there's resolution. We know that, for example, there's a lot of intoxicant stuff that occurs with each trials, understanding what the -- what the time course resolution of all those instances. There's a signal that's been talked about in the literature around cardiovascular viability. And we're obviously looking very closely at the EKGs or ECGs all in these trials to understand the magnitude of changes that we'll be seeing there. All of these factors will be taken together to help guide dosing decisions for the Phase 2 ibogaine trial.
Sumant Kulkarni : And my last question is on strategy. We know, it's still quite fresh, but have you began to see any impact from the COMP360 Phase 2b data set and the tone of discussions or prices of assays in the secondary space that might still be looking for partnering?
Srinivas Rao : It’s early days yet. I don't know Florian, if you've heard or seen anything.
Florian Brand: Yeah. If I -- could you repeat the question? Did you say whether there was any impact of -- to ensure that I understood currently on prices of assays? Is that what you said?
Sumant Kulkarni : Yes. Now that we have the COMP360 data set in hand. Have you seen any changes in the tone of your discussions with psychedelic potential partners on the price of assays themselves, given what we know about this data?
Florian Brand: Yeah. To reiterate Srini’s point, I think that's very early. So there was no direct impact that we realized in our discussion so far. Again, I think for us, it's highly encouraging, highly validating for what we are doing. And that holds also true for other complementary compounds and technologies that we evaluating to add to the platform. Yeah.
Sumant Kulkarni : Thank you.
Operator: Thank you. Our next question comes from the line of Patrick Trucchio with H.C. Wainwright. Please proceed with your question.
Unidentified Analyst : Hi, thank you. This is Jason speaking for Patrick. And thank you for taking my question. I just have one question is on RL-007. Can you discuss a little bit more about the mechanism of action for RL-007? And what differentiates it from many of the other compounds being developed for CIAS? And then kind of related to this is how is the Phase 2 trial can further validated the other potential differentiation? Thank you.
Srinivas Rao : Yeah, that's a good question. So the pharmacology compound is quite complex. It doesn't bind on the thing sites as other traditional compounds. So it's difficult to do in vitro binding experiments to understand the binding potency and efficacy against these receptors. So the way this has been done today, is using antagonists studies. As I mentioned, in animal models, you're seeing a no tropic effect of lower doses analgesic effects at higher doses, GABA-B antagonists. I think it’s antagonists. Yeah, so GABA-B antagonists actually do mitigate some of the no tropic effects as the some of the cholinergic compounds. So, again it seems to be hitting multiple receptor systems to provide its benefit. Conversely, most GABA agents do have a pretty pronounced -- have pretty pronounced side effects. That doesn't seem to be the case here. That's one of the reasons the doses were pushed pretty aggressively in existing clinical trials. So how does this compare? Well, a lot of those are glut agents, these are glutamatergic compounds, or glycine compounds. So they're a little bit different in terms of their pharmacology. I would suspect a lot of this is ultimately going to be -- is going to end up being complementary to one another. So I'm pretty encouraged. I hope more than one of these compounds makes it through the gauntlet of Phase 2 and Phase 3 trials quite frankly. I think that, there's a huge medical need in terms of patients and piecing it together with the different compounds in different compound class is going to be very useful, even within the same patient, putting dosing with more than one could be very beneficial.
Unidentified Analyst : All right, great. Thank you.
Operator: Our next question comes from Nathan Weinstein with Aegis Capital. Please proceed with your question.
Nathan Weinstein: Good morning, ATAI team. Question on COMP360. The rapidity of onset that was confirmed in the Phase 2b. Seems to highlight a benefit of psilocybin versus SSRIs for example. So can I trouble you to opine what that might one day mean for patients in terms of use in an acute care or emergency mental health setting?
Srinivas Rao : Yeah, that's a good question. So that's certainly the rapidity of onset is one of the motivators. That was one of the motivators presumably for why S-ketamine ultimately got a suicidal indication in their label. One could certainly anticipate something like that happening with this compound. So you certainly do have a day in the clinic and maybe someone walks in at one in the morning. It's probably not the best time to be doing this. But certainly after some initial stabilization, it does make a great deal of sense to actually use this trial or use this compound in such a patient population.
Nathan Weinstein: Great, thanks so much.
Operator: Our next question is a follow up from Ritu Baral with Cowen & Company. Please proceed with your question.
Ritu Baral : Hi, guys. Thanks for the follow up. I'll keep it quick. Florian, you spoke about digital therapeutics and bringing them into clinical development programs on a relatively early basis. Can you talk -- can you speak to the regulatory discussions around building these programs with digital therapeutics and receptivity of either the FDA or European authorities on their incorporation? Thanks.
Florian Brand: Yeah, Srini, you can if you want to jump in.
Srinivas Rao : Okay. So the various elements here have already been through the regulatory process. So with respect to reset kind of, I believe 510(k) off of reset. But is functionally sort of a combination product. So the combination -- the digital therapeutic and combo with a drug, the general concept is out there. Obviously, combination products, where the cost the other thing -- basically hardware and drug, that concept is already out there. So I think the overall, the elements have already been through the regulatory process. We have not had a specific discussion with the FDA around this, we will do so as we go through the IND process with our assays. But, again, I think the general concepts have already been validated from a regulatory perspective. The EMA seems to be a little bit further behind on some of those doesn't immediately impact us however, as we go through the process. Of course, we get a chance to educate along the way. And of course, there's other companies that are thinking about general concepts like this. It should also be noted that that did go through the FDA approval process, it's a little bit different. My site is hardware, partially hardware based. And it wasn't a digital therapeutic in the traditional sense, it was really more compliance management. But nonetheless, this concept of a digital element being paired with a drug rather is certainly out there. So all the pieces are out already. Does that answer your question?
Ritu Baral : Yes. Thank you, thanks for the follow.
Operator: Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Florian Brand for closing on.
Florian Brand: Thank you, operator. And thank you, everyone so much for joining us today. It has been a pleasure to share our latest highlights and interaction. As always, including the importance of the highly encouraging COMP360 data as we've discussed, and its broader potential for psychedelics and mental health as a whole. We continue our onward positive momentum, progressing our diverse array of treatments supported by our novel digital therapeutics and data insights that we also could discuss today. And in addition also discussed we will remain highly active in business development across a broad array of treatments enabling technologies. Understanding that when it comes to mental health, we are facing a very heterogeneous patient population and one size does not fit all. So we are driving treatment approach with a very patient-centric focus as we advance our vision to heal mental health. With that. I thank you all very much for dialing in today and have a great week.
Operator: Thank you. This concludes today's conference. And you may disconnect your lines at this time. Thank you for your participation. And have a wonderful day.
