Hello. Welcome to the Cantor Global Healthcare Conference for 2021. My name is Charles Duncan, and I'm a Managing Director and Senior Biotechnology Analyst with the firm's Equity Research Department. This is day number one for our conference, and I have to say, what a year it has been since we last hosted our clients in the fall of 2020. It is a pleasure to introduce the next presenting company that is Atai Life Sciences. With me today, I have Dr. Srinivas Rao, one of the company's founders and the Chief Scientific Officer. Srinivas, how are you? I'm good, thanks. Thank you for the opportunity to talk with you this morning. Really appreciate it, Charles. Absolutely. Thank you for joining us, Srini. You know, I want to keep this to about a 30-minute session, but I have to ask you a perspective, and that is on this last year. It has been a real challenge for a lot of people, you know, a lot of things to point to. Also, we've seen some interesting innovation out of biotechnology, obviously with the COVID vaccine, but also the recent approval of the first potentially disease-modifying agent in Alzheimer's. I guess when you think about all of those challenges, as well as the innovation that you've seen, how do you see that as a source of resilience and inspiration for building your company? How have you kept it all together this year? Certainly, talking more broadly, you know, the rollout of the vaccine and everything cannot be understated, right? The importance of the vaccine rollout and all of the heavy lifting that it took to get there, I mean, really is truly inspiring, right? I mean, this is not a technology that, what, 18 months ago, maybe a little bit longer, was really thought to be, you know, really thought to be viable or scalable. The effort, when people put their mind to it, to get that out there has been incredible, right? I mean, many of us are vaccinated at this point. I'd say a very large percentage of the people on this call are vaccinated. It's just a testament to what one can accomplish when, you know, you put your mind and your effort behind something. Very inspirational moment right there. Absolutely has been interesting to see science move back into the forefront, but it's also been a big challenge for a lot of people. This brings us to perhaps the raison d'être for Atai Life Sciences and the mental health challenges that people have experienced just this last year and a half, but also more, perhaps, longer term. Can you speak to that? Absolutely. There are a lot of things that have been impacting mental health for a longer period of time. Of course, it has been exacerbated over the course of the last 18 months. If you look at some of the epidemiologic data, you certainly see upticks in overall levels of depression and anxiety over the past, again, decade, maybe a little bit longer than that. I think what is particularly disconcerting is the uptick in those rates, particularly in the younger populations, sort of the 18 to 24, and a little bit younger than that as well. Reasons are not clear, but certainly people do point to social media and things of that nature driving a lot of that. Obviously, over the last 18 months, things have gotten much worse, right? There is a large uptick in depressive symptoms, self-reported depressive and anxiety symptoms, roughly 4x compared to baselines or roughly a year prior to that. It is really very challenging. You know, there are many factors that, of course, are driving that, the social isolation, obviously being an important thing, the uncertainty of what was happening or what is happening being a factor there, job loss, obviously deaths, and, you know, the sickness. This has impacted so many people. We emphasize and focus on, you know, the roughly 600,000 deaths, but of course, there has been a lot of impact more broadly on each one of those people. Many of those people obviously have a family. They might have, you know, they certainly have parents, they have children, they have siblings, and it is just, it has been a really impactful time. Of course, yeah, and I don't think that this is going to be short term, right? I mean, you know, COVID's going to be with us for some extended period of time, at least in an endemic kind of fashion and in an impactful fashion. These impacts are going to continue. Certainly the aging of the population doesn't help because of, you know, the core morbidity of mood disorders with neurodegenerative diseases. Absolutely. Yeah. You've been in neuroscience for a long time, virtually your entire career. You're trained in the neurosciences. I'm kind of wondering why now, why would you join an Atai? Why would you help to found an Atai Life Sciences? Yeah, as you point out, my background certainly is in neuroscience, MD, PhD there. I did all my training at Yale with someone who was really a visionary in the space of cognitive impairment, schizophrenia, actually. You know, not surprisingly, this has been an area of passion for me. I actually started out before that in computer engineering, but really wanted to understand the wetware inside one's head to be able to model that back. Yeah, obviously an area of passion. Always tried to stay in that field, but as you are well aware, CNS kind of fell out of focus for a long time, right? Yes. In all fairness, there were some serious challenges with very interesting pharmacologies that kind of fell to the wayside, did not replicate. You know, I'm thinking of the NK-1 antagonist or substance-P antagonist, you know, that didn't work, the CCKs before that. There were a number of attempts at bringing new pharmacology. It's just that it didn't work in the end. Actually, even 5-HT3 antagonist, now I think about it. Glutamate, glutamate pharmacology, NK-801. Yeah, so a lot of different things have been tried and did not work, and there's a number of reasons for that. You know, of course, the complexity of translational modeling is an important one, right? You can't ask a rodent how they're doing today. And of course, that's the primary endpoint that we're looking for in humans. So there's a lot of reasons for it. You know, the placebo effect is often brought up because of the exact same reason that I just said. I mean, how are you doing today when you're in a clinical study, when there's lots of attention being paid to the individual and to the condition? Obviously, many people do get do improve. So again, challenging field. That's why people kind of walked away from it. That's what made it a little bit more challenging. As for why Atai and why joining it and helping to co-found it, it's clear that the need is there, right? Despite many approvals along the way, many of them are me too. I mean, you know, with the SSRIs, the atypicals, subtle variations to be sure, and I'm not discounting the incremental benefits, but nothing that really shook things up. Of course, one of the things that really changed things is this brexanolone approval. Kudos to Srinivas and others in really having the vision to bring those things, bring that asset forward and bring it to the market. Likewise with Sage, with brexanolone, really kind of changing the space pretty significantly and bringing some innovation to the space. That was roughly contemporaneous with the, you know, the founding of Atai, which was in sort of the 2018 kind of timeframe. I really came on board in basically January 2019 to help kind of transition it to really an operating company. Again, you know, the chance to really build something completely new, the chance to take a lot of compounds that have been dismissed, right, including the psychedelics, but also non-psychedelics, just compounds that really have been given short shrift along the way was incredibly exciting for me. It has been an interesting time for neuroscience, and I got to tell you, in the last five years or even five quarters, it has dramatically changed in terms of institutional investor interest. We've been tracking this space for a long time, and I'm pleased to see the progress. When you think about all the areas of innovation, some of which you touched on, both preclinical models and targets, as well as genetic kind of information to better hone in on patients that may respond to drugs, and then clinical innovation and regulatory innovation, what is the key source of information that you use when you're thinking about bringing on a new project and a new candidate for Atai? Certainly with the clinical stage assets that we have at this point or the near clinical stage assets, the focus has been on prior evidence in humans, right? That's important from our perspective for de-risking. CNS, as I've mentioned, is challenging, and there's a number of different, you know, again, we touched upon the translational limitations there. Having compounds that we know have some effect, whether it's anecdotal or otherwise, or smaller, you know, clinical studies, academic studies, certainly is important for de-risking. Hence, you know, in the context of Compass with psilocybin, with DMT, with Ibogaine, other compounds that we're developing, but also non-psychedelic compounds like the deuterated form of venlafaxine, the deuterated form of mitragynine. These all have interesting data behind them, some double-blind placebo-controlled, others more extensive case series. We have a sense of what the safety and the is going to be, the tolerability is going to be with all these compounds. That has been a really important driver. Now, you know, going forward, we will expand into earlier stage compounds and, you know, very interested in novel pharmacology as well. To your point regarding, you know, finding the appropriate patient population, very heavily involved on that. We talk about Introspect, which is our digital therapeutic platform. The flip side of that, in addition to providing therapy, it allows us to better understand the patients. I mean, there are other channels that we can incorporate into that, whether it is movement or other sort of wearable technologies, et cetera. That is something that we are looking at for future revision, so to speak, of this technology platform. We're also developing hardware with cyber, and that is going to provide what I like to think of as a digital guide. That basic hardware is going to give us a lot of insights into, you know, the person's reactions to the psychedelics, potentially the reaction of the patient prior to the psychedelics and post. Really interesting from a digital biomarker perspective. We also recently announced CyProdyx, which is something that we're working on with some real visionaries and leaders in the space of metabolomics. Metabolomics is very interesting. It can be, you know, the profile that you're seeing in the blood is, of course, partially from the person themselves, right? They're literally their how they're metabolizing products, but it's also partially from the gut and from the bacteria in the gut. That's a really fascinating area. I was actually at a company previous to Atai called Axiol, which was focused on brain-gut interactions for autism as well as Parkinson's disease. Really interesting space. You know, there are certain moieties, you know, this is the work out of Sarkis Mazmanian in July, about a Caltech, really fascinating moieties that are known to be taken up by the human body and then have a very direct impact on certain, you know, protein expression within the brain. So really fascinating stuff. Maybe has been discounted, but of course, there's more visibility on that space and a lot more interest in it. Yeah, I find the microbiome and its impact on cognitive function as an example or even mood to be a fascinating area of discovery, at least at this point. One last, call it perspective builder question, then we'll ask a few questions about the pipeline. I guess when you think about psychedelics, what is the aha, you know, observation or moment here? Can you provide some contextual framework for why you are intrigued with those candidates in your pipeline that have psychedelic activity as well? Yeah, so there's sort of two elements to that. I mean, the early work on ketamine, which is psychedelic-like, right? The dissociative effects are somewhat similar. Yeah. Was this phenomenon of rapid onset of efficacy. Actually, John Krystal, who was one of the leaders in the space, was actually on my PhD committee way back when. I was familiar and had seen some of these data very early on, or at least was familiar with some of the trials that were being conducted. That is, I mean, that was really quite remarkable. People did not really believe that you could have a compound that you can administer once and then, or administer and then provide an immediate benefit on mood, right? That had not been seen before. If you think about all the drugs that have preceded it, the SSRIs or tricyclics before that, atypical antipsychotics, et cetera, none of those have that rapidity of onset. That is the first element, which I think is really intriguing. As for psychedelics themselves, I mean, it's sort of twofold. The first was this rapid onset, but unlike ketamine, there was this persistence of benefit. I think that's what really changes things and really explains some of the interest and excitement around this field. Single administration of a compound causing months, if not even longer, remission or significant amelioration of symptoms. Again, never been seen before. It's one of the reasons that we were intrigued by Ibogaine, for example. That's a particularly challenging population, as everyone knows. You know, opioid use disorder population is really challenging. You know, current therapies really are focused on chronicity, right? It's blocking craving. It's blocking the ability to get high by an opioid with high potency antagonists and partial agonists. Ibogaine, it was one that seems to, and again, we have to confirm this, hypothesis, but it seems to change the relationship that the patient has with their drug of abuse. That's a totally different paradigm. Single administration having marked in long-term changes is just remarkable. Again, kind of fits into this entire space with psychedelics. You mentioned Sage earlier on the call, and we do not cover Sage, but it seems to me that you are, with your candidates and perhaps Sage, ushering in an entirely new paradigm for the treatment of these disorders, which is more intermittent than daily chronic therapy. That combined with a differentiated mechanism is really quite exciting. Could be a paradigm shift. That's what we're clearly hoping for, right? That intermittent, the intermittent therapy, I think is a really important element along with rapidity of onset, of course. The intermittent therapy allows you to get away from the side effects that are commonly associated with SSRIs or augment therapies, which obviously typically include antipsychotics. Sexual dysfunction is obviously well described. Sleep abnormalities are well described. GI disturbances are well described. Weight gain or significant weight loss are also potential issues with these compounds. If you have something that's intermittent, presumably you're walking away from a lot of those side effects. Yeah. Why don't we talk a little bit about the pipeline? Because that was a great segue into what you're, I believe, what you're hoping to see out of Atai's subsidiary called Perception Neurosciences, which just recently started a clinical trial, phase two for arketamine, our PCN-101. And that's in treatment-resistant depression. You've got some other experience with TRD, which we'll come back to with another candidate. I guess I'm wondering, when you think about arketamine versus, say, esketamine or the racemic compound, why do you think it is differentiated? What is it about it that could result in a differentiated clinical profile? Yeah. If you go back again a decade or longer, the story around ketamine was focused on a particular pharmacology, namely NMDA antagonism. It makes, and it just so happens that ketamine, of course, is a racemic mixture. There is esketamine and arketamine. Esketamine is where the NMDA antagonism predominantly lies, not exclusively, but predominantly lies. Indeed, esketamine is sold in other parts of the world as an anesthetic. Arketamine is not. It is not particularly great at that. It made sense with the understanding at the time to pursue esketamine. That, of course, is why change is done and brought it to market. However, you actually mentioned MK801 as another NMDA antagonist early on. Many NMDA antagonists have failed in subsequent clinical studies or, you know, certainly have not replicated and have not had the sort of magnitude of effect that you see with ketamine. This really does speak to something else going on. That is what led some investigators to start looking at arketamine and obviously initially in animal models. I mentioned that arketamine does not really have much NMDA antagonism. It is about four- or five-fold less potent compared to esketamine. What you see in the animal models and multiple animal models of depression is actually greater potency for arketamine than esketamine. These effects are being driven, or these effects are present at doses that are not associated with NMDA antagonism. That is what is really interesting. That preclinical data is what makes this truly fascinating because what we're doing is trying to develop this compound as an at-home therapy. Of course, this will be driven by the data that we generate in this phase two trial and subsequent to that. That is what we're targeting. That is the promise of this compound. As many of you, as you know, and as many of the audience probably knows, you know, our esketamine is fantastic, but it's complicated to deliver. It's a two-hour within doctor office visit, you know, or administration, I should say. It's twice a week for four weeks, then once a week for the subsequent four weeks. It's 12 visits in eight weeks. You're clearly not driving home after taking this medication. There is a lot of logistical challenges. With our ketamine, if we can, you know, if we can get it to a non-dissociative compound, in other words, a compound with greater therapeutic index that's non-dissociative, then this, you know, then we have this potential for at-home use that obviously is a game changer in this space. We have a rapid-acting agent, non-psychedelic, non-dissociative that can be taken at home, markedly expensive. The commercial footprint, not surprisingly the market, but also the number of patients with TRD that can be treated. We've also read in the scientific literature that some of the metabolites of our isomer are longer lived. I guess I'm wondering if you think that you could see greater durability and really change the treatment paradigm, not only in terms of where it's administerable, but also how long it acts. Yeah. That is the other element of the preclinical data in addition to this greater therapeutic index, to your point, durability of response or greater durability of response. That is absolutely a really interesting element. It is something that we are going to explore. It is complicated. I do not think there is a full appreciation for how the compound is working at the moment. There is a glutamatergic element without a doubt. Whether that is a direct AMPA effect because of one of the metabolites or it is an indirect effect on some other means of impacting neuroplasticity is not completely clear at this point. It is really interesting. We are very focused in our clinical study on the durability of effect as well. Not durability in these psilocybin-type contexts, but at least more than several days, which is what you typically see with esketamine. Maybe once a week. Yes, maybe once a week, maybe once every two weeks. Okay. These would be marked improvements over the current paradigm. A lot of candidates to talk about, but I want to touch on two before the end of this call. I'll move on to your subsidiary called Recomify. It's conducting a phase two A with a candidate called RL-007. Now, as I understand it, this is not a psychedelic compound. I'm wondering if you can talk a little bit about its mechanism and the potential for its use in cognitive impairment associated with schizophrenia. Yeah, absolutely. Cognitive impairment associated with schizophrenia, cognitive impairments are essentially ubiquitous in schizophrenia. You know, there's always an impact on IQ, if nothing else, right? It's been noted across multiple studies at this point. It's really difficult to treat. You know, when you think about schizophrenia, you're normally focused on the so-called positive symptoms, right? The hallucinations, whether they're verbal, you know, auditory or visual, those are what people tend to focus on. In many cases, you can sort of handle those. You can certainly suppress them and you can give the individual insight so that they know that this is originating within their head and so they can sort of deal with that. That's not what keeps people institutionalized. That's not what impacts their ability to go get a job. It's really, you know, the cognitive impairments as well as negative symptoms. The abolition, you know, the lack of affect and everything else, these are the elements that really impact the individual's lives and of course then have a marked societal impact as well. They're very difficult to treat. There's nothing indicated for cognitive impairment in schizophrenia at this point. You know, so that makes it really intriguing. The compound that we are developing is a unique one. It's got a very complex pharmacology. I mean, it certainly hits the glutamatergic system. It hits GABA. It hits the cholinergic system as well. People are familiar with acetylcholine in the context of, you know, Alzheimer's disease and other forms of dementia because acetylcholine esterase inhibitors are widely used there. This compound is incredibly well tolerated. I mean, animal data is what has driven, you know, there's really two elements of this compound's efficacy. One is an analgesic and the other one is a pro-cognitive agent. There have been nine studies that have been conducted to date. For the most part, they've been focused on the analgesic profile of the compound. There's always been an interest in exploring the cognitive side effects of the compound, the cognitive benefits. Indeed, one of the phase one trials, our healthy volunteer trial, was actually focused on a particular model of cognitive impairment, the so-called scopolamine challenge. You give a normal healthy volunteer scopolamine, which is a cholinergic antagonist, and you get a marked cognitive impairment. This compound actually reverses that cognitive impairment in particular domains. This, you know, no drug is really ubiquitous, but verbal memory was improved and certain elements of attention were also improved. This improvement was associated with shifts in EEG, shifts in the power spectrum of EEG. When you give scopolamine, you get a slowing of brain frequencies. When you give this compound, it actually causes a shift to higher frequencies. Really interesting. A large phase two study was also conducted. This was in diabetic peripheral neuropathic pain. Diabetics, particularly those that have peripheral involvement, have some level of cognitive impairment, though it may be subclinical. In this particular case, what was found was that at lower doses, there was actually an improvement once again in verbal memory. Really intriguing. That is a 180-subject trial. These are the data that really intrigued us. Of course, they're not in patient populations. We're, of course, extending this to this schizophrenic population. It's a phase two A, as you point out. It's really mechanism-focused. I mentioned the spectral shifts that were seen in individuals on the scopolamine challenge. We want to replicate that in this population. Schizophrenics, many of them normally have a slowing of frequencies. We're looking for increases in, you know, we're looking for spectral shifts, you know, theta-beta ratios and things of that nature. That's the first thing we want to see. We're also looking at potentials mismatch negativity, P300. These are things that in the literature are associated with cognition, basically normalizing these parameters. They're abnormal in schizophrenics. Normalizing these parameters is associated with the pro-cognitive effect. That's what we're really looking for in this trial. This is really a signal-seeking study. It isn't about statistical significance. It's about seeing these brain physiology changes or brain activity changes. That'll help you design and conduct another study. Yeah, that's exactly right. I mean, we want to see effect size. We want to confirm that there's a benefit. I mean, in the absence of these changes, that way it would be very challenging to move this asset forward, let's put it that way. That, of course, is an important element going back to Atai. It's an important element of our model. We have a lot of different things that are, you know, in our pipeline. One of the luxuries that affords us is the ability to be truly truth-seeking as opposed to seeking. If we, you know, we structure our trials to be go, no, go decisions, this is absolutely within that paradigm. Okay. Axiol, since we only have a couple of minutes left, I wanted to recognize that Atai is also an investor in COMP and Compass Pathways. COMP 360 is meant to read out by the end of this year. As a neuroscientist, would you be more focused on needs or would you be focused on, you know, call it response rates? What would you like to see out of that phase two study in treatment-resistant depression? How will you judge success? Yeah, so this trial is obviously a large leap forward from existing data sets, right? They're all academic studies, you know, at most a handful of sites. This is a large multi-center trial, well-powered, you know, 222 subjects, 22 sites. It is a really, you know, it's a massive undertaking and very well conducted by the team over at Compass. There is going to be a lot of learnings from this study. I mean, what I am personally focused on are in fact response and remission rates. Okay. We recognize the heterogeneity of treatment-resistant depression. I've said multiple times, not everyone's going to respond to psilocybin any more than not everyone responds to an SSRI or ketamine, esketamine. There is another subset of this population that undoubtedly is going to have a very long-term remission. Most people are going to fall somewhere in between. I am focused on the effect size I want to see and the durability of effect. The best way to assess that is with response and remission rates from my perspective. At least they're conducting a very large, rigorous study relative to what's been done in the past. The neat thing is that you have a lot of candidates to prosecute. You're going to be a busy person over the course of next year. I hope that we are together in a year at the Cantor 22 Healthcare Conference. We're talking about some of this progress, but I appreciate you taking time today, Srini, and sharing your perspectives on Atai with us. Absolutely, Charles. Thank you so much once again for the opportunity. Thank you.