An ambitious startup working on psychedelic drugs with hopes of treating mental health issues has made its way onto the public markets. That startup, ATAI Life Sciences, listed on the Nasdaq exchange (ticker “ATAI”) on Friday, the 18th of June, and saw its share price close up nearly 30% that day.

• ATAI Life Sciences is the brainchild of a German billionaire entrepreneur, Christian Angermayer, who made a fortune founding a biotech company and then investing in tech startups. 

• ATAI is in the ambitious territory, looking to develop psychedelic drugs to treat mental health conditions. It’s a field still in its infancy and with many regulatory hurdles to cross.

• As it’s structured, ATAI is a holding company for various psychedelic startups pursuing treatments for mental illnesses. When it was privately held, it raised over $360mn of venture funding and used it to buy several startups to house under its umbrella. 

• Now with its IPO, ATAI raised $225mn more to continue buying and funding psychedelic startups, with hopes of striking gold in one or more of them. Notably, ATAI is a pre-revenue company tailored for investors with a high appetite for risk.

• As to regulations, psychedelics have many federal restrictions in the US, the main target market of ATAI. It was only last year that Oregon became the first US state to legalize psychedelics for medicinal use, and as it is, ATAI is betting that regulations for the drug will get loosened as time goes.

• Current drug programs in ATAI’s pipeline include Psilocybin and Ketamine therapies to treat depression and Ibogaine to treat opioid use disorder. Most of the company’s trials are still in the Preclinical or Phase 1 stages, with no approved drugs to date.

• Signaling very high investor confidence, ATAI has a current market cap of around $3bn despite being a pre-revenue company.

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