Weeks after the FDA approved Johnson & Johnson’s ketamine spray for depression, a group of investors joined forces in the largest-ever private financing round for a psychedelic medicine biotech company.
ATAI Life Sciences, a German biotech startup focused on depression and other mental health disorders, raised $43m in Series B funding. It is now the highest valued company in the space, valued at $240m.
Break on through to the other side
Recreational use of psychedelics became popular in the 1960s, but it didn’t take long for the US government to classify most of them as “drugs of abuse.”
But, according to CNBC, recent clinical studies have found loads of evidence that some of the trippy dippys actually can help patients with certain mental illnesses.
ATAI is currently funding clinical trials for “formerly stigmatized compounds,” like psilocybin (the activator in magic mushrooms) and arketamine (a different form of ketamine than what’s in J&J’s nasal spray).
Investors are down for the trip
Psychedelics are having a moment: Not only are regulators peaking at the therapeutic potential, investors are down to follow the white rabbit as well — of course, that comes with good, bad, and ugly.
- The good: Higher exposure brings in more funding for research.
- The bad: Big Pharma is an atrocious industry, where most companies are more in it for the cash than for patient well-being.
- The ugly: Rising stars like Compass Pathways, which at one time seemed to be conducting psilocybin trials for the right reasons, sometimes take shady turns to ensure monopolization of a product.
Oh, and guess which company is Compass Pathways’ largest investor?
