June 2, 2025 • 55 mins
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On this week's episode, Dr. Srinivas Rao, co-founder and CEO at atai Life Sciences, explains how his engineering background led him to the development of psychedelic compounds for treating depression, anxiety, and other mental health disorders. Internal drug development efforts at atai are focused on short-duration psychedelics that can work within existing healthcare infrastructure, with the potential to transform the treatment of mental health disorders. Rao also talks about atai's hub and spoke model for investing in other psychedelic companies, what MAPS/Lykos Therapeutics got wrong in the run-up to FDA's review of Lykos's MDMA candidate for PTSD, and whether psychedelic therapies need the "trip" to catalyze network disruption and neuroplasticity in the brain.
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Episode Transcript
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Ben Comer (00:00):
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(00:49):
I'm Ben Comer, chief editor atLife Science Leader, and I'm
speaking today with Dr SrinivasRao, co-founder and CEO of atai,
Life Sciences, a companydeveloping psychedelic compounds
for the treatment of mentalhealth disorders such as
depression, anxiety,schizophrenia and opioid use
disorder.
Dr Rao earned his medicaldegree, as well as his PhD in
neurobiology at Yale, and healso holds a master's degree in
(01:13):
electrical engineering, alsofrom Yale.
His career in the life scienceshas included multiple
scientific officer chiefscientific officer, I should say
and chief medical officer roles, as well as two previous CEO
roles at Entheogenix Biosciencesand Kyalin Biosciences.
(01:34):
Prior to becoming CEO at atai,Dr.
Rao was the company's ChiefScientific Officer for five
years.
On today's show, we're going toget to know Dr Rao and find out
what's happening in thepsychedelic therapy space,
what's unique and challengingabout this segment of drug
development, how atai LifeSciences has changed since its
(01:55):
inception in 2018, and what kindof impact FDA-approved
psychedelic drugs could have onpatients with mental health
disorders.
Dr Rao, thanks so much forbeing here today.
Srinivas Rao, M.D., Ph.D (02:07):
Thanks for having me, Ben, and thanks
for the very generousintroduction.
Ben Comer (02:11):
Absolutely.
I'm excited to speak with you.
The famous American engineer,Henry Petrosky, said science is
about knowing.
Engineering is about doing.
Absolutely, engineering isabout doing.
You are an engineer by training.
Srinivas Rao, M.D., Ph.D. (02:31):
When did you know that you wanted to
be an engineer.
You know that's been somethingthat has been part of my
personality for a long time.
I've always enjoyed tinkering,I've always enjoyed building
things.
I think that was a reallyimportant element to it.
So once I got to school, I wasreally looking.
I mean I pre-med was alwayssomething I that was kind of
kicking around.
(02:51):
I I enjoy, I always enjoyedaspects of medicine.
But once I got to school, Imean I was really focused on
either being a physics major orgoing into engineering.
And after taking, you know,after freshman year, I think it
became pretty obvious to mewhich way I was going to go.
Again really enjoyed thebuilding and the problem-solving
(03:13):
element of engineering andindeed all my undergraduate
projects, and in fact even themaster's projects, were all
biomedical in nature.
Ben Comer (03:22):
Was there a specific class in those undergraduate
years?
That that, you know, reallyhelped you make up your mind?
Srinivas Rao, M.D., Ph.D. (03:30):
Yeah, I mean I it's.
It's been a while.
I certainly took some of thebasic engineering class.
I mean I'd always played withelectronics.
Ben Comer (03:40):
Yeah.
Srinivas Rao, M.D., Ph.D. (03:40):
It's something I'd always been
interested in.
So I had a pretty intensive Ihad an intensive, literally
intensive introductory physicsclass freshman year, enjoyed it
a lot.
Really small class was likeseven of us, but it was more.
You know, I met a lot of peoplethat were really strong on the
theoretical side and through thecourse of that class met a lot
of people that were reallystrong on the theoretical side
(04:02):
and through the course of thatclass met a lot of people that
were really strong on themathematical side of physics and
so just realized that you know,it's probably a better fit for
me to go into the engineeringside of things.
Ben Comer (04:17):
And you were at Texas Instruments, I think in the
TI-81 and TI-85 years, is thatright?
And did you work on thoseproducts?
Srinivas Rao, M.D., Ph.D. (04:27):
I worked on digital signal
processing chips and these werejust summer internships, I guess
, and very much in keeping withwhat I was doing as an undergrad
, which is really signalprocessing, which fundamentally
is not that different fromneuroscience, right?
So this was electronicapproaches to signal processing,
(04:47):
the hardware associated withthat.
I actually did some very earlywork on AI technologies.
I mean, it wasn't so muchconvolutional neural networks
back then, but more linear-basedneural network technologies.
These are really the verybasics and so implementation of
(05:08):
that on signal processinghardware as well.
Ben Comer (05:10):
That was at Texas Instruments.
Srinivas Rao, M.D., Ph.D. (05:12):
No, that was actually as an
undergrad.
Ben Comer (05:15):
Oh, as an undergrad.
Okay, and then what kind ofmade you decide to apply
engineering to brain science, gofrom electrical signaling to, I
guess, a different kind ofelectrical signaling?
Srinivas Rao, M.D., Ph.D. (05:27):
Yeah, I mean, I think that was really
it.
So all of my undergrad work wasaround biomedical applications
but it was pretty obvious therewas a strong disconnect in the
language that engineers use andphysicians use or, you know,
biological researchers use, andit just seemed a very obvious
niche for me to understand thosetwo languages and kind of be
(05:48):
able to work within that spaceand bridge that space.
And so that's where I went.
And again I had this interestin neural networks and how
neural networks in the brainprocess information and how that
is distinct from how a computerand say, you know all the
digital signal processingtechniques I'd learned.
So that's what.
(06:08):
That's kind of what got meinterested in the MD PhD side of
things.
Ben Comer (06:14):
Got it.
Maybe we can talk about theformation of atai next.
Who was involved?
How did it come together?
Srinivas Rao, M.D., Ph.D. (06:23):
So it actually preceded me by a
little bit, right.
So it was in 2018, and it wasChristian Angermayer, Lars Wilde
and Florian Brand.
Those are the three initiallythat sort of started.
This all came about becausethere was a desire to fund
(06:45):
Compass Pathways.
So this is in 2018.
It was very difficult forCompass to find funding.
As a developer of psychedelictherapies, Christian was able to
put money in and actually getsome of his friends to also put
money in, like Peter Thiel andothers.
So there was this initial roundof money that went into Compass
(07:07):
and it was, you know it becameevident to and then Lars
actually went into Compass andso Florian stayed with what
ultimately ended up becomingatai.
And you know, essentially thenit was there's lots of other
things that could be.
You know that this company youknow that we could fund, right,
there's other psychedeliccompounds, there's other
(07:28):
compounds, and so that's where atie sort of started and tie all
of Christian's shares andCompass were put into atai, and
so then it was more like afamily office for Christian for
a period of time.
But over the course of 2019,there was a desire to
potentially shift it in aslightly different direction,
(07:49):
look broader than simplypsychedelics.
In fact, the second investmentwas a company called Perception
Neuroscience and that wasostensibly a non-psychedelic,
non-dissociative version ofketamine, so something that
could be taken at home as anexample version of ketamine, so
something that could be taken athome as an example.
So that's actually how I gotinvolved with with atai.
(08:12):
Um, because the co-founder ofuh, perception was actually my
very first boss in the industry,a guy named Jay Kranzler.
Oh, interesting, yeah.
So that's how I got introducedand you know, the initial idea
was for me to uh take the helmat Perception, but in having
discussions with atai and thefolks that I mentioned, you know
, there was an opportunity foratai to go into a very different
(08:34):
direction, which is really anoperating company, and kind of
pursue this hub-and-spoke model.
And that's when I, you know, itmade more sense for me to join
at the atai level and reallybuild up that capability.
So, Lars, Christian, Floriandid not have a biotech
background, right?
I mean, Christian certainly hada background in biotech
(08:57):
investing, but of course that'sdifferent than operating a
company.
So that's what I came on boardto do to really build up that
capability, which I came onboard in January 2019.
And, of course, did exactlythat and built up the team
internally, started to work onsome of the internally developed
assets, including VLS-01shortly thereafter, and also
(09:21):
continued this model of findingcool assets that are outside and
investing in them, and that'sexactly what we did over the
course of 2019, 20 and 21.
Ben Comer (09:33):
I want to ask about the hub and spoke model of a tie
, but before that, you mentionedinvesting early in Compass
Pathways, one of the earliest, Ithink, psychedelic companies,
perhaps aside from MAPS who'sdeveloping their MDMA candidate,
Compass developing I thinktheir lead candidate is a
synthetic psilocybin candidateand you mentioned that
(09:58):
investment was tough findinginvestors.
Obviously there were some kindof hope, high profile investors.
Peter Thiel, you mentioned what.
What could you say about theinvestment landscape then versus
now?
We're going to talk a littlebit about MAPS in a minute and
what happened with them, but Iguess in terms of how the
(10:21):
investment area has changedsince, since you've been
involved in psychedelic drugdevelopment, yeah, it's been a
bit of a roller coaster, right.
Srinivas Rao, M.D., Ph.D. (10:28):
So 2018 was really characterized by
complete pessimism on the spaceand just really thinking of it
as kind of a crazy idea, right.
So why would you do psychedelic?
You know what's the benefit andis this even a thing with the
agency?
I think what helped catalyzethings to some degree was
actually approval in early 2019of Spravato, which is a, you
(10:52):
know, of course, were wherethere was a lot of investment.
You know, interestingly, withCOVID, of course, there was a
lot of money that went into thestock market and there was a lot
(11:13):
more speculative bets that wereplaced.
You know, broadly speaking,neuroscience is considered a
speculative bet and certainlypsychedelics within it was.
You know it was speculativesquared in some sense, lots of
money went into that space, tons, lots of smaller companies were
created then.
And then, you know, after 21,there was a bit of a winter in
(11:35):
biotech and in fact, the latterpart of 21 is when things turned
and that's been pretty much howit's been for some time.
You know, certainly, as resultscame out, there was ability to
invest.
But it's been a bit more of achallenging time and I think
Compass struggled with that toowith their phase two results.
I mean there was a lot ofrun-up on their stock going into
(11:57):
that result or preceding thatresult, but once the results
came, it was really, you know,stock price went down pretty
significantly.
So it's been a bit of achallenging time.
That's not to say that goodassets have not been able to get
invested in, because theycertainly have.
Early this year well, I thinkpost-election and early this
year, things were considered abit more positive.
(12:20):
There was a lot of, you knowthere was a bit of a Trump bump,
et cetera, in terms of generalmonetary policy, you know,
cutting taxes, et cetera,potentially leading to more
investment.
And then there was also thewhole thing about RFK that has
been said to have a morepositive stance on psychedelics.
I think that you know that was.
(12:42):
I don't know where that's allnetting out now.
I mean there's been a lot ofturmoil that you know, that is
obvious at the federal level andhow that's going to impact
things.
I know that, for example, youknow we just announced that our
VLS-01 trial, the Phase 2 trialwe just had a, you know, just
dosed our first patient.
(13:03):
What has been apparent intalking to investigators is that
you know there's been a lot ofchallenges with getting DEA
licensing because of all theturmoil at the agency.
I don't know at this point.
I mean it's just we just needto let some of this settle out,
I think.
Ben Comer (13:20):
Right, and that's.
That's DEA, drug EnforcementAgency which you need approval
from in order to conductclinical trials on on these
kinds of substances.
Just one.
I have one more question, justabout your, your background, dr
Rao.
I'm curious about if there werelearnings that you were able to
bring from past non psychedelicexperiences at companies like
(13:43):
Cypress Biosciences.
Non-psychedelic experiences atcompanies like Cypress
Biosciences we mentioned Kyalin,you worked at Retrophin, at
Axial Biotherapeutics, at others.
Were there specific learningsor insights that you picked up
at those companies that helpinform the therapeutic strategy
(14:04):
at atai?
Srinivas Rao, M.D., Ph.D. (14:05):
Yeah, I mean I think, well, there's a
couple of things, there's manythings actually.
You know all of those,including DepoMed, by the way
DepoMed too, right?
I mean essentially neuroscience, certainly, and mental health,
adjacent in many ways.
So, particularly if you startcounting things like chronic
pain, which has a huge affectiveelement.
More importantly, the generalstrategy for clinical trials is
(14:26):
pretty simple.
I sent a similar.
I should say you know they'reall using patient reported
outcomes.
You can't ask a pay.
You can't measure objectivelysomeone's pain level.
You've got to ask it.
You can't ask.
You know there's no biomarkerfor autism.
Really, you have to ask thepatient how their socialization
is and their caregivers, etcetera.
(14:47):
So the trials in many ways aresimilar across all of those
indications.
But I think the most importantelement for me has always been
starting with the end in mind,right Starting with, you know,
taking a physician's perspective, like what are we trying to
accomplish?
What is it that's going to?
You know, what's the gap thatwe're trying to fill, the unmet
(15:09):
need, but really keeping thepatient and the physician
perspective in mind and thinkingabout commercialization from
the get-go.
That is actually why VLS-01 isthe way it is.
It was a decision early on tosay you know, there are
challenges with a very longpsychedelic experience.
It demands new infrastructure,at least adaptation of existing
(15:30):
infrastructure.
So let's try and take somethingthat we believed would be fully
fleshed out by the time we wereready, and that was, you know,
the J&J infrastructure.
If anybody can put togetherinfrastructure, it is J&J right.
They've got the muscle to dothat.
Anybody can put together aninfrastructure it is J&J right,
they've got the muscle to dothat.
And Spravato launched into atough time.
They got approval in 2019, as Imentioned, but of course, got
(15:56):
hit with COVID shortlythereafter, and this is an
in-clinic kind of therapy.
So they had a very rough fewyears, but they cracked the code
, as you'd anticipate a companylike J&J would.
They were able to turn itaround, understand what
reimbursement looks like, puttogether the appropriate
cookbook for the sites to beable to deliver this therapy and
deliver it in a manner that'scost-effective for them.
(16:18):
I mean, if the sites are notmaking money the clinical sites,
the doctor's offices then it'snot going to work.
But they were able to crack thatcode and you know they hit.
They went over a billiondollars last year.
930 million of that was roughly930 million of that was in the
US and it was about 50,000patients give or take.
(16:41):
So if you think about that, fora second 50,000 patients out of
roughly 3 million or so withtreatment-resistant depression.
So I think there's lots ofavenues here.
But again, it was always aroundkeeping the end goal in mind
and we made a bet on Spravatoand Spravato infrastructure and
I think that's been borne out.
Ben Comer (17:02):
Yeah, so it sounds like that approval and launch of
Spravato was pretty important,perhaps not just to a tie, but a
number of companies that arefocused on this space.
Is that fair to say?
Srinivas Rao, M.D., Ph.D. (17:15):
Yeah, I would say so.
Ben Comer (17:17):
Yeah.
Srinivas Rao, M.D., Ph.D. (17:19):
Yeah, go ahead.
Yeah, I was just going to saythat of course, the Lykos thing
was the opposite in some ways,right, that really caused a lot
of.
That, did cause a markedpullback in space last year.
Ben Comer (17:30):
Yeah, let's.
Let's talk a little bit aboutthat, since you bring it up.
MAPS, the MultidisciplinaryAssociation for Psychedelic
Studies, spun off a commercialorganization called Lykos, which
was created to essentiallyreceive approval and
(17:50):
commercialize their MDMAcandidate for post-traumatic
stress disorder.
Widely thought that it would beapproved by FDA, including by
me.
It didn't.
It didn't happen.
There was an advisory committeewhere some I think, at least
from MAPS perspective unexpectedtopics came up.
(18:11):
The advisory committee votedagainst approval.
The FDA followed that lead,didn't approve it, requested
some additional trials, whichhas now led to some layoffs and
reorganization at Lykos.
What, what went wrong there?
I mean there was.
It was hard to find anyone whosaid, who didn't think that that
(18:35):
product was going to beapproved in August of what?
2013?
2014.
Srinivas Rao, M.D., Ph.D. (18:42):
Yeah, I was one of those that wasn't
quite so sure.
So this is one of those weirdones where you know, generally
speaking at this point, whensomething is going, you know
when something has beensubmitted.
I, you know, I have a prettygood sense of whether or not
it's going to get approved.
I was not convinced of this one, but I also was just saying I
really don't get it.
I really can't put odds on thisone, because there were weird
(19:06):
political pressures that pushedit in one way.
But then there was a datapackage itself, even stuff that
we knew about prior to thebriefing book being released for
the AdCom.
That didn't make a lot of sense.
I didn't make a lot of friendsat a conference about I don't
know.
It was a year, year and a halfago when I said I don't know if
it's going to get approved.
I really don't have a sense ofit.
So why did I say that?
(19:26):
I mean, there's a couple ofthings.
First of all, the generalpremise didn't make sense to me
that it was a drug that wasassisting therapy, because
therapy isn't the purview of theagency.
That's kind of obvious, right.
You can't say that as a labelindication, because that's not
what the agency does.
Now, there are ways of sort ofgetting around this.
(19:53):
Right, you can say listen,there are therapies that are
standard of care forpost-traumatic stress disorder,
right, there's dialecticalbehavioral therapy, there's
exposure therapy, there's a fewothers.
So what we are going to do isget those patients that have
PTSD.
We're going to bring them in,we're going to start them on
standard of care therapy onejust to make it simple and then
we're going to give them MDMA orwe're going to give them
(20:14):
placebo, not a problem, that's aknown modality, right?
The FDA has done this withopioid use disorder drugs.
Right, you had their part ofMAT, medically assisted therapy
Totally cool.
It's done with GLP-1s.
Glp-1s are supposed to be usedin the context of other health
(20:35):
interventions, like eating aswell as exercise, et cetera, to
affect weight loss.
Right?
The agency doesn't regulatethose things.
It's fine.
So there is a path.
But you know they went off thereservation a little bit.
I mean, the therapy wasnon-standard, completely
non-standard.
It was completelynon-standardized.
(20:56):
And then they had this wholenotion that the therapist had to
be in the room.
So there was therapistfunctional unblinding, which is
totally new, right?
That's just not a thing that'sever been dealt with before.
So not only were they trying toget therapy approved, they
wanted to get something that wasnon-standard approved.
And then they were doing oddthings like having the therapist
in the room.
So then the therapist knowswhether the patient got a drug
(21:18):
or a placebo and they will adapt.
Right, they will adapt how theyapproach the patient.
This is what the FDA wasconcerned about.
There was other stuff that cameout once the briefing book was
released and once the AdC omitself was released, but just
the basic premise of the stuffthat we knew about was
(21:38):
problematic.
That's what gave me pause.
Oh, the final thing, of course.
Course is just the size of thetrials.
80 patients, ish times two isjust very small for phase three,
for a um, not orphan,indication, let's just put it
that way.
It's a.
You know PTSD is pretty common,right you would?
(21:59):
You know you compare it toCompass, that's a thousand
patients.
Compare it to all the othercompanies out there.
I mean no one is under 500patients, I believe.
I mean you can double checkthat.
But you know that's a kind of anormal thing and the FDA, it
just makes sense.
You need to understand adverseevents.
(22:20):
You can't go in with thepremise saying this drug is
obviously works and it'sobviously safe.
You have to go and demonstrateefficacy.
You have to demonstrate thesafety.
You need to understand adverseevents that are occurring in 1%
of patients or more.
Resolution would be good, but1% demands that you do 300
patients.
On drug, there's this roughrubric which is the three.
(22:43):
You know the three X role.
So you didn't get any of thathere.
So I think it was one of theFDA reviewers or what you know
was basically like obviouslyvery politically savvy, but
basically said well, we didn'tknow how to put the label
together.
That's it.
We don't the data.
We don't understand.
We don't understand the safetydata that we're concerned, we
(23:05):
don't understand it and we don'tunderstand.
Ben Comer (23:09):
Right and, as you said, FDA doesn't regulate
therapy and I'm sure there wasthe issue of having to tease out
, you know how much of therapywas contributing to the efficacy
if they're paired together.
Do you think MAPS went in thatdirection because they needed
that aspect to deliver theoutcomes, or it was just kind of
(23:30):
a mistake?
Srinivas Rao, M.D., Ph (23:36):
outcomes or it was just kind of a
mistake.
They just had very fixed viewson how things should happen and
I think they frankly, over theyears they just went against the
establishment.
That was kind of the thingright, and I think that's what
caused some problems there.
There are pathways that makesense and I think those pathways
are suitable for MDMA, ahundred percent suitable, like
(24:00):
the stuff I told you about.
But they chose to go in adifferent direction.
Ben Comer (24:06):
Right right MAPS, Lycos may have created some of
their own challenges, but thereare certainly challenges that
are unique to psychedelic drugdevelopment, culturally, perhaps
, scientifically.
What can you say about thoseand maybe how a tie is thinking
about overcoming thosechallenges?
Srinivas Rao, M.D., Ph.D. (24:26):
Yeah, I mean, from the outset, my
view is this is just anotherclass of compounds, right, this
is just another class of drugs.
I was familiar with all of theketamine work.
I mean, ketamine was quitegroundbreaking because it did
affect benefits immediately,right, and there was some
persistence up to a week to twoweeks, so that was pretty cool.
This is sort of the next stepof that, the next iteration,
right, and there was a lot ofliterature that supported that
(24:51):
general motion, including smalldouble-blind placebo controlled
trials.
But to me it was just anotherdrug.
That, of course, isn't how thesethings are perceived externally
, right, there's a lot ofcultural overlay with these
compounds, which I've alwaysfound interesting, you know, and
there was a lot of discussionsthat these shouldn't be
commercialized, blah, blah, blah.
Okay, again, I never focused onthat personally.
(25:17):
It's just let's do the rightstudies, do it.
The FDA has been verysupportive of these compounds, I
mean all the way through, withbreakthrough designations and
everything else.
They like it, they recognizethe need in the space there.
There's a known pathway.
Just let's follow that, let'sgo do it and let's generate the
(25:37):
data that's needed.
Now, again, this is weird,because this is one of the
reasons that I ended up goingwanting to do discovery work
very early on and finding newcompounds because again there
was this to me, a surprisinglevel of cultural overlay with
dmt and with 5-methoxy dmt andpsilocybin.
It's like, okay, fine, let'sjust go create some new
(25:58):
compounds so we can sidestep allof that, um, all of that stuff.
I think over time that's gottenbetter, though.
I mean, there's, you know,there's there's certainly
pockets and there's individualsthat continue to believe that
there's something above andbeyond the chemical compound
here, and that's fine, thatcontinue to believe that there's
something above and beyond thechemical compound here, and
that's fine, you can believewhatever you want.
But there's certainly a muchmore mainstream kind of view,
(26:21):
mainstream being in the sense ofphysicians et cetera.
But yeah, these are interestingcompounds, they're powerful
compounds.
Pharmacology to some degree isunderstood.
I mean, at least these would bethe 5-HT2A receptors.
So let's go do something withthat game changer in some mental
(26:56):
health disorders.
Ben Comer (26:57):
But I'm sure that you also encounter physicians and
patients that will hear you knowpsilocybin or ketamine or DMT
or MDMA and think you know drugillicit substance.
Do you encounter thatphysicians who are sort of less
willing to refer a patient to aclinical trial?
Or you know a treatment naivepatient who is concerned about
(27:20):
going into a clinical trial on asubstance like that?
That has something of areputation.
Srinivas Rao, M.D., Ph.D. (27:25):
Yeah.
So I think that on thephysician side it's a little
harder to answer Right.
It's because I have a selectionbias.
The people I speak to, probably, and the people are going into
trials and everything else aremore inclined to do that.
We have done some marketresearch and certainly around
MDMA itself there was somenegative views because, like,
this is a party drug and youknow why are we giving this to
(27:45):
patients.
But that speaks more to marketbuilding and physician education
to me than it does about thecompounds themselves.
It's all about the data for me,and I think a lot of doctors
ultimately kind of fall intothat same bucket.
I mean sure there'll beindividuals that are relatively
more dogmatic about it.
You know someone that wentthrough the seventies and had a
(28:10):
very negative you know negativethoughts about how it was
handled and how you know theLeary and others kind of you
know positioned it.
I mean sure there'll be thoseindividuals and patients also.
I mean you know we are goingfor psychedelic, naive patients.
We do not want patients thathave a lot of experience because
(28:31):
that has problems with thetrial, which was something else
that came up with Lykos, by theway.
They had like 40% of patientsthat had taken MDMA before, so
they had kind of a sense ofwhether or not they were getting
placebo.
So we want naive individuals andthere is absolutely anxiety in
many individuals going into itbecause it is such an unusual
experience and there's fearsthat things can come up, et
(28:53):
cetera, and that's kind of whatyou're going for to some degree.
I mean, you know, at leastthat's one of the hypotheses
that the benefit is coming frombeing able to process things
that haven't been processed.
Again, that's a hypothesis andwe don't have to flesh that out.
But you know so there'sabsolutely anxiety.
That's one of the other reasons.
I kind of like shorter durationcompounds the first one, the
(29:14):
first experience.
You know at least they get asense of what that's like and
they can maybe get anotherexperience.
You know, if it's a super longexperience they can feel kind of
you know that that can be evenmore daunting.
It's like all right, well, it'sonly two hours.
You know, right through twohours like oh geez, it's eight,
six hours, eight hours, 10 hours, that's a long time.
I mean just mentally kind ofgoing into it.
Ben Comer (29:36):
Not to mention the infrastructure required,
physicians.
You know, monitoring et ceterafor that long of a period of
time could get could getdifficult.
I want to talk about a atai'sbusiness model.
You have your own developmentcandidates as well as strategic
investments in other companies.
We mentioned Compass already,but Beckley SciTech Recognify
(30:01):
Life Sciences.
Am I saying that correctlyRecognify?
Can you kind of outline and youmentioned hub and spoke model,
but can you explain the thinkingbehind this business model?
Srinivas Rao, M.D., Ph.D. (30:12):
Yeah.
So again, we had a more complexmodel for the most part when we
started right.
So we were pretty open to allsorts of things, including
incubated assets like our DMT-1,blso-1, as well as our MDMA,
empo-1.
But we also did invest in othercompanies and that could be a
majority investment or minority.
We obviously had some publicinvestments as well, including
(30:33):
Compass.
So we were open to manydifferent things.
We had a lot of assets thatwere in development, early
development.
You know, the reality is thatwe had high bars for everything
for moving an asset forward, andthere was a lot of organic sort
of.
You know, there's a lot ofpruning for that reason and you
know, as we now advance intolater stage trials, the
(30:56):
resources demands become a lothigher.
So we've certainly winnowedthings down.
The primary focus for the mostpart is on our internal assets.
We did make an investment inBeckley in January of last year,
the reason being that we likethe team, we like the company,
(31:17):
we have a close relationship.
We've had a relationship withthem for an extended period of
time.
Philosophically, they're verymuch aligned with us with the
short duration psychedelics.
So they had BPL-03, which is5-methoxy-DMT.
It's distinct from DMT, whichis what we're developing
pharmacologically distinct butsame to our paradigm.
So we are very much inalignment on that.
And these two assets are thefurthest along in terms of short
(31:39):
duration therapies, by farright.
So these are both two-hourassets and kind of a single
administration, very much justkind of drag and drop into
Spravato paradigm.
Single administration monitorthe patient, see how they're
doing and can send them home twohours plus after they get their
dose.
So very simple.
So that's why we made thatinvestment.
(31:59):
Now, Recognify was an older one.
It's non-psychedelic actually.
It's for cognitive andschizophrenia Very interesting
compound with strong preclinicaland clinical data, actually for
pro-cognitive effects.
And the mechanism by which ithas these effects was very much
something that actually cameback to my PhD work, which was
(32:24):
actually around working memoryand in a schizophrenia lab.
So it was cognitive impairmentsand schizophrenia.
But there was a lot ofinteresting stuff with the
pharmacology of that drug thatsuggests that it could be very
beneficial for this patientpopulation.
The unmet medical need isenormous with schizophrenia, the
cognitive impairment element.
So just really believe in theindication, believe in helping
(32:46):
those patients out.
Challenging indication, withouta doubt.
But yeah, there we are on about60% With Beckley, we we got
about a third with beckley.
We have some, uh, we have, youknow, warrants that can take us
closer to 50.
We have a lot of shareholderrights, um as well, and, you
know, generally speaking, we'vehad the idea was to have some,
you know, depending on results,depending on where both
(33:08):
companies are at, potentiallybringing the two companies
together, um, at some point.
Ben Comer (33:17):
Yeah, schizophrenia is a really interesting one and,
of course, there have been somenewly approved and exciting
drugs in that space.
I've been coveringschizophrenia off and on for a
number of years and I rememberwhen Abilify tried to do the,
you know, the digital pill tosolve the adherence issue, which
didn't exactly work.
But, but these drugs are newmechanisms, right, the potential
(33:40):
to really make a change in thatdisease.
But you know, there were anumber of years where there just
wasn't much in development forthese patients and, like you
said, it's a.
It's a a.
It's an unmet need, to say theleast.
Atai, getting back to atai Lifesciences you experienced some
(34:02):
disappointing clinical resultsin 2023 with PCN 101, led to
some layoffs, a refocusing ofthe pipeline.
How has well?
Let me ask this how has ataichanged since its inception,
since you started in 2018?
Srinivas Rao, M.D., Ph.D. (34:21):
Yeah, so well, you know.
Just to answer the first thingfirst negative results are part
and parcel of this industry,right?
Absolutely.
If you knew the answers beforegoing into the trial, then you
don't need to do the trial,fundamentally, right, right, so
that's part and parcel.
I mean, as I mentioned, there'sbeen a simplifying of the model
(34:42):
, right?
That's what we, certainly whatI've been going for to keep the
team more focused on a smallernumber of assets, but really
going all in.
Smaller number of assets, butreally going all in.
And part of that isunderstandable because we did
run many, many clinical trialsacross a number of assets, I
mean from KUR101 to GABA'sGRX917 to, of course, the
(35:05):
multiple phase ones with PCN101and the phase two as well.
So we ran a lot of studies andwe had high bars for going to
the next step and many justdidn't make it, and that is okay
.
That is how this, that that'show this process works.
Ben Comer (35:22):
Yeah, and yeah, sorry , go ahead.
Srinivas Rao, M.D., Ph.D. (35:23):
No.
So just again, just kind ofsimplifying a lot, that the
company is much more lean andmean at this point and really
targeting the things that matterto us right now.
Ben Comer (35:34):
Right, how do you and , as you say, you know this,
everybody has a disappointingclinical result, something
doesn't go exactly as as hopedor planned.
How do you recover, you know?
How do you kind of take that inand and move forward the next
day after you get, you know, adata?
Srinivas Rao, M.D., Ph.D. (35:53):
read like that yeah, I mean, I think
this is one of those thingswhere experience is really
helpful.
Right, you, you, there's always.
I mean, I, I never say weunderstand that, I never say
that there's.
Yeah, this is a slam dunk.
Right, that's just not thelanguage I will use.
I think that you always learnsomething.
(36:13):
It's always massivelydisappointing that day and you
know, the next day you kind ofpick it up and take it from
there Like what did we learn outof this?
You know you do premortems,premortems.
You also do postmortems, Likewhat could have gone better,
what are some ideas?
You know we spend a lot of timewith a PCN 101 readout,
analyzing the data and cuttingthe data in many, many different
(36:34):
ways to try and understand whathappened, what could have
happened there, what could wehave done differently.
And you know that's again,that's just how it, that's just
the nature of the beast.
Ben Comer (36:45):
That's the way it goes.
That's right.
What are your key prioritiesand upcoming milestones that
you're most focused on right now?
Srinivas Rao, M.D., Ph.D. (36:55):
Yeah, we have a really exciting
roughly 12 months or so 12 to 15months, actually it's about 12
months.
At this point we're in March,so we have four phase two
readouts coming up.
So BPL-003, the Beckley assetagain the company where we own
about a third of the company, athird it will be reading out
with a Phase 2 in the middle ofthis year.
(37:17):
In fact we had a press releaserecently indicating that the
last patient had been dosed.
Recognify, the cognitiveimpairment and schizophrenia
trial will also be reading outin the middle of this year.
In fact that trial and theBPL-003 trial are kind of on top
of each other at the moment interms of which we'll read out
first the VLS-01, the internalDMT asset, we'll be reading out
(37:39):
in approximately a year, withinapproximately a year for the
treatment-resistant depressionstudy.
And then we have another asset,emp-01, which is our MDMA, so
single enantiomer of MDMA, whichwe're developing for social
anxiety disorder.
It's an earlier stage trial, soit's a phase 2A proof of
concept trial.
So that also is anticipatedreadout in approximately a year.
Ben Comer (38:02):
Okay, and where does Compass stand right now?
I think they had delayed a fullreadout on their phase 2
program.
Correct me if I'm wrong aboutthat, but what's next for them?
Srinivas Rao, M.D., Ph.D. (38:14):
Yeah, I mean it wasn't quite that
they delayed, it's just thatthey're waiting until the trial
is completed.
So their trials have sixweekend points or two phase
three.
The two core phase three trialshave six weekend points but
then they have a blindedobservation window that goes out
to six months.
So the challenge there is thatif you want to read out from the
primary it is an interimanalysis, essentially right, so
(38:36):
you can wait until all thosepatients are in.
You can do an interim analysis.
There are concerns sometimesabout well many times about
disclosing efficacy results froman interim analysis because
there's a, you know, there's a,there's a recognition that that
can impact the rest of the trialthat's currently still on.
Oh, I see that's a challengethat they kind of came up
(38:56):
against and so what they haveguided?
So in the end I don't know that.
I mean there were some delays,don't get me wrong, but I don't
think they were quite asegregious as people may have
thought.
So their first Phase 3, theso-called 005 trial, their
interim read on the primaryanalysis, is in the middle of
(39:16):
this year.
Apparently it's a somewhatlimited data set for the reason
I just outlined, because thetrial is still ongoing.
The full readout is, I believe,at the end of this year.
I'm not sure if they guide itdifferently, but I'm pretty sure
it's at the end of this year.
So around the end, let's callit.
For the second trial, the 006trial, they are, I believe,
going to give the full datareadout in the middle of next
(39:38):
year.
So I think that's their currentguidance.
And once those two are read out, there's obviously some open
label work that's alsocontinuing.
You know the trials where youkind of roll into from the trial
that you roll into from thesetrials.
So yeah, that's kind of theirtimeline now.
So you know getting all thesewrapped up in kind of the middle
(40:00):
of 26,.
You know potential for, youknow approval sometime in 27,
essentially at this point.
Ben Comer (40:07):
Announcing efficacy data on an interim basis.
Does that have more of animpact if your endpoints are not
tied to you know, an objectivebiomarker?
If it's, you know, getting backto what you were saying about
the difficulty in a number ofCNS areas having a more
subjective kind of patientreported outcome, or does that
happen with efficacy datarevealed?
(40:30):
You know in other, you knowmuch more specific biomarker
type disease areas.
Srinivas Rao, M.D., Ph.D. (40:37):
Yeah, I have to admit I have much
less experience with things likecancer and other indications
like that, where there'sobviously, for better or worse,
very objective endpoints rightTumor-free survival and just
survival in general.
So as a general statement, it'snot considered great to reveal
(40:57):
data efficacy data prior to thecompletion of a trial.
But there may be exceptions forthings like that and certainly
with orphan indications, whereeven open label can be
acceptable.
I mean, even in some cancerindications there's, if you have
a very good sense of thenatural history of a compound,
at some point it becomesunethical to give a drug in a
(41:18):
placebo-controlled study, eventhough that's on top of standard
of care.
I mean, if you've got a prettygood sense that you're saving
lives, at some point it's like,yeah, well, you can't give them
placebo anymore.
So there's a lot more latitudein that context.
Ben Comer (41:32):
Right, there's a lot more latitude in that context,
right, do you?
And it's it's interesting yousay, for better or worse,
because I think about this toowith biomarkers, because you
hear about disease states whereyou know you show, for example,
a tumor has shrunk a certainamount.
The patient may not necessarilyfeel any better or may even
even feel worse.
So there, I think there arepros and cons with a strict
(41:54):
objective biomarker versus amore subjective biomarker.
But my question for you, dr Rao, is do you think that we're
anywhere close to getting to abiomarker in some of these
mental health disease, whetherit's imaging or something else?
And how helpful would that beif you were able to kind of hang
(42:15):
your hat on a biomarker in, youknow, depression, for example?
Srinivas Rao, M.D., Ph.D. (42:19):
Oh man, it would be unbelievably
helpful if we could do it.
I think it's been one of thoseareas that's been very fraught.
People have been trying to dothis for a long time, whether
it's EEG or imaging, et cetera.
I mean, I'm always interested init.
One of the things that's alwaysintrigued me about psychedelics
in particular is this notionthat they can help with
(42:41):
ruminative thoughts.
Right, and that's beensomething that you know the data
has been sort of.
It's not the highest quality insome sense, but a lot of
imaging studies have suggestedthat the default mode network
and things like that you can seesome persistent changes in that
and that may correlate with theefficacy.
Amazing, if that's true, andit's something that I'd love to
(43:03):
explore further.
It's not a regulatory endpointtoo.
Actually validate somethinglike that, which would be
considered a surrogate endpoint,would take a lot, but of course
, it markedly simplifies thingsif something like that can
actually work.
Ben Comer (43:18):
Right.
Several companies now DavidOlson at Delix is one example
that comes to mind are workingon psychedelics that have been
engineered to remove thehallucinatory aspect, the trip,
so to speak.
What's your opinion?
Srinivas Rao, M.D., Ph.D. (43:45):
Dr Rao on whether the trip or an
altered state of consciousnessis needed to deliver the
therapeutic outcome.
So my conceptualization of itis that these compounds are sort
of doing two things right.
The first is that they arecausing a network disruption and
that network disruption ismanifest as a psychedelic effect
, right.
And the second thing they'redoing is causing marked
neuroplasticity.
(44:06):
So how I view it is that you'vegot this frozen snow globe
that's got patterns in it thatare not good, right, that are
essentially, you know, bad forthe patient.
The psychedelic is doing twothings it's thawing it out and
then it's shaking it up and then, obviously, as the drug wears
(44:27):
off, it refreezes and it's got anew configuration.
Then, and for reasons due toregio specificity again talking
about some of these networksthat seem to change their
dynamics and their activity it'sa more helpful configuration
that they freeze back into.
So, in that conceptualization,having something that's not
(44:48):
psychedelic isn't necessarilyhelpful on its own, right.
So that's a theory, of course,and we don't have data to
support it or disprove it at themoment.
So I know that, Delix, I thinkthey pushed their timelines back
.
I mean, I know that they'reworking on a phase two, so
that's going to be very telling.
(45:08):
I think there is avenue, thereare some useful avenues for
non-psychedelic compounds, andthat is to put in conjunction
with therapy.
So if you, you can affectnetwork disruption in many
different ways, one of those istherapy.
That's fundamentally whatyou're doing right.
Cognitive behavioral therapy isa means of addressing negative
(45:29):
thoughts.
That's kind of what I wasgetting at right.
So you could do it all at oncewith the psychedelic, but that's
got psychedelic effect.
Or you could do it a bit moreslowly over time, but maybe more
constructively over time youknow who knows and allow it to
cement in with these compoundsright.
So the way I like to thinkabout that is you know, again, I
(45:49):
mentioned I've done a lot ofwork in pain.
So if you break your leg orsomething, you're likely going
to get physical therapy rightOnce the cast comes off.
Or once the cast comes off oronce the brace comes off, you
can get the most out of thattherapy if you take a ton of
NSAIDs prior to going intotherapy, because it allows you
to create a range of motion, itallows you to really exercise
(46:11):
the joint.
So that's how I think of thesenon-psychedelics and again, it's
all a theory at the moment Idon't have any data to support
that, but you know it's.
We've been working onnon-hallucinogenic or putatively
non-hallucinogenic compounds aswell, so we're intrigued by the
space and it could becompletely wrong.
(46:31):
Maybe they do somethingcompletely on their own and
that's totally cool and that'llbe interesting.
I'm a little suspicious that,and you know we have really done
the team at atai has done afantastic job of elucidating how
this biased agonism is working.
We've got a very good sense ofthat and how the psycho
messenger systems are working toaffect psychedelic effects or
(46:56):
neuroplastic effects.
So yeah, I mean I'm intriguedby this.
Let's see how it all plays out.
I mean there will be somedynamic.
You know I have a hard timebelieving there are no
perceptual effects, to be honest, but it might not rise to the
full level of psychedeliceffects.
It may be something that'sreasonably well tolerated, even
(47:19):
in an outpatient setting, butall of this is TBD.
Ben Comer (47:25):
atai's products, assuming they go forward and are
eventually approved, will theybe administered not in concert
with therapy, in a sense thattherapy is in the label, the way
that it was with Lycos' MDMAproduct, but will there be a
kind of, you know, a strongrecommendation, or how does that
work in terms of, or I guesshow do you think about it for
(47:47):
let's use depression or anxietyas an example?
Will you know, will there be atherapy component to
administering the drug?
Srinivas Rao, M.D., Ph.D. (47:56):
No, we don't have any therapy
component in our administration.
So in fact, for VLS-01, it'spretty limited at the amount of
therapist interactions.
It's an hour prior to dosing,so there's a one hour.
It's, I think that one is anactual visit prior to dosing.
It's really to help prepare thepatient right.
So essentially, to some degree,what is manifesting during the
(48:19):
psychedelic experience is whatyou are kind of thinking about
and what's you know.
There's a suggestibilityelement to it.
So if you are thinking aboutthe things that are bothering
you, like what is it you want tochange, you know, etc.
Some form of intention settingcould be helpful.
At least that's that'sspeculated at this point.
Um, so we do some of that, butwe also have a big part of it is
(48:42):
just giving, is ensuringpsychological safety.
So what can we do to make surethat you know if you're really
struggling?
You know we can teach you boxbreathing, so that's a nice easy
way of kind of settlingyourself down.
So we want to make sure thatyou've got some experience with
that going before going into it.
We have a one hour sessionafterwards.
It's strictly psychologicalsafety.
(49:03):
As I mentioned, things can comeup where this is a well-known
phenomenon, right?
So some history of abuse, somehistory of trauma can come up or
, you know, some memories ofthat can come up.
We want to make sure that thepatient is psychologically
stable, and it's kind of like ifyou had chest pain during
administration of thesecompounds ketamine or anything
else.
You want to make sure thepatient, you flag that.
(49:25):
You want to make sure thepatient is medically stable, so
you'd have a cardiology consultpotentially.
Here it's the same kind ofthing.
Something came up.
You want to make sure thepatient has support, as they
kind of figure that out, soyou'd want to refer them to a
therapist in that context, butthere's no specific therapy
that's outlined for this.
Ben Comer (49:45):
And then is there a therapist or a physician that
will be monitoring, I guess,during the session, similar to,
I think, the way it's done withSpravato.
I want to say it's up to fivehours, but maybe it's less than
that two hours.
Srinivas Rao, M.D., Ph.D. (50:00):
So, yeah, I mean absolutely, the
patient needs to be monitored.
I mean, if you look at the, sothe FDA provided some guidance,
right, some draft guidancearound psychedelic therapies,
and they said that they need twopeople to monitor these
patients, which I think has alot to do with the fact that
what they had been, what wasfront of mind for the agency at
that time was MDMA through Lykos, as well as Compass, and both
(50:23):
of these are the Comp360, andboth of these are long duration.
So I think a lot of it came fromthat.
With these short durationcompounds, you know, what we
have currently is someone in theroom with the patient not
therapeutic, but just monitoringfor safety and, you know, just
making sure nothing untoward ishappening and then we have
someone else that's monitoringthrough a camera, and that's
(50:45):
what we have.
Hopefully, over time, it can bemore like Spravato, where
there's only someone that'smonitoring through the camera
Basic telemetry, making sure theblood pressure and pulse are
not, you know, doing anythingcrazy and then just making sure
that the patient is, you know,is doing their thing but isn't
(51:05):
bouncing off the walls, right?
That's going to need someintervention.
Ben Comer (51:09):
Are there any standardized settings type of
like music playing or anythinglike that in the trials, or do
you anticipate that being usedin practice?
Srinivas Rao, M.D., Ph.D. (51:19):
Yeah, that's a great question.
I mean, people do use that,obviously, for all of these
things.
We have the mask on, becauseyou tend to have more intense
visuals, et cetera.
If you have a mask on, you'renot looking around.
And then we do have music aswell, but the role of that music
is not clear yet.
It's yet another variablevariable at some point needs to
(51:40):
get, uh, um, isolated andunderstood, but right now
there's no data that, one way oranother, you don't want
something that you know you'reprobably not going to listen to
death metal while on thesecompounds, but you know
something that's generallycalming, is probably uh, is
probably not unreasonable right,and you anticipate having a um,
a REMS program similar toSpravato.
Ben Comer (52:02):
That will kind of guide all of those practices
during the administration aswell.
Right, yeah, all right.
Final question for you, dr Raowhat impact do you think
psychedelic therapy couldultimately have on mental health
globally?
Srinivas Rao, M.D., Ph.D. (52:22):
I mean, I think it has a potential
to have a massive impact.
Right, this is just.
Again, it's a marked shift inparadigm.
Esketamine was the first one.
It's rapid resolution symptoms,but it's a lot of
administrations, right, that'sthe challenge.
With Spravato You're going intwice a week for four weeks.
Once a week for the subsequentfour weeks.
It's many hours out of yourweek.
(52:43):
You can't drive home, you'rekind of down for the count for
that day.
This could potentially allowone or two administrations over
the course of, say, four toeight weeks.
That's just a big shift thatcan then get someone into
remission, get many more peopleinto remission.
Having it approved, having itstandardized, allows for
(53:04):
reimbursement so many morepeople can benefit from in the
United States.
That's true elsewhere as well.
You're certainly welcome totake these compounds.
You know, particularly magicmushrooms and other compounds,
but our other materials, ofcourse that's not controlled.
You have no idea what you'regetting and it's expensive, at
least in the United States.
You know, usually these arethese sort of ceremonies and
(53:26):
things are on the order ofseveral thousand dollars.
So there's a very limitednumber of people that can
benefit from just kind of likeketamine.
Right, ketamine typically isaround $500 a pop if you're
doing it and it's out of pocket,as opposed to Spravato where
it's really your copay ordeductible, which is typically
substantially less.
So it's a different paradigm.
(53:46):
It could help a lot of peoplejust from that perspective, and
that's again what we're doing.
And once there's approval inthe US and Europe I mean there
tends to be more it opens thefloodgates to approvals in many
other countries, many otherterritories.
And you're not on that medicalneed Right.
This is one of the greatestcauses of disability in the
(54:07):
world.
Right Fifty percent of peoplewill have some kind of an
affective disorder over thecourse of their life.
It's big.
So this could be a huge step inthe right direction for all of
those patients.
Ben Comer (54:19):
Well, thank you very much for the conversation today.
I really, really enjoyedspeaking with you.
It's an exciting area ofdevelopment in the industry and
we'll be watching atai to seewhat happens.
Srinivas Rao, M.D., Ph.D. (54:31):
Thank you.
Thank you for your time.
Ben Comer (54:33):
That is Dr Srinii Rao , co-founder and CEO of atai
Life Sciences.
I'm Ben Comer and you've justlistened to the Business of
Biotech.
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(00:49):
I'm Ben Comer, chief editor atLife Science Leader, and I'm
speaking today with Dr SrinivasRao, co-founder and CEO of atai,
Life Sciences, a companydeveloping psychedelic compounds
for the treatment of mentalhealth disorders such as
depression, anxiety,schizophrenia and opioid use
disorder.
Dr Rao earned his medicaldegree, as well as his PhD in
neurobiology at Yale, and healso holds a master's degree in
(01:13):
electrical engineering, alsofrom Yale.
His career in the life scienceshas included multiple
scientific officer chiefscientific officer, I should say
and chief medical officer roles, as well as two previous CEO
roles at Entheogenix Biosciencesand Kyalin Biosciences.
(01:34):
Prior to becoming CEO at atai,Dr.
Rao was the company's ChiefScientific Officer for five
years.
On today's show, we're going toget to know Dr Rao and find out
what's happening in thepsychedelic therapy space,
what's unique and challengingabout this segment of drug
development, how atai LifeSciences has changed since its
(01:55):
inception in 2018, and what kindof impact FDA-approved
psychedelic drugs could have onpatients with mental health
disorders.
Dr Rao, thanks so much forbeing here today.
Srinivas Rao, M.D., Ph.D (02:07):
Thanks for having me, Ben, and thanks
for the very generousintroduction.
Ben Comer (02:11):
Absolutely.
I'm excited to speak with you.
The famous American engineer,Henry Petrosky, said science is
about knowing.
Engineering is about doing.
Absolutely, engineering isabout doing.
You are an engineer by training.
Srinivas Rao, M.D., Ph.D. (02:31):
When did you know that you wanted to
be an engineer.
You know that's been somethingthat has been part of my
personality for a long time.
I've always enjoyed tinkering,I've always enjoyed building
things.
I think that was a reallyimportant element to it.
So once I got to school, I wasreally looking.
I mean I pre-med was alwayssomething I that was kind of
kicking around.
(02:51):
I I enjoy, I always enjoyedaspects of medicine.
But once I got to school, Imean I was really focused on
either being a physics major orgoing into engineering.
And after taking, you know,after freshman year, I think it
became pretty obvious to mewhich way I was going to go.
Again really enjoyed thebuilding and the problem-solving
(03:13):
element of engineering andindeed all my undergraduate
projects, and in fact even themaster's projects, were all
biomedical in nature.
Ben Comer (03:22):
Was there a specific class in those undergraduate
years?
That that, you know, reallyhelped you make up your mind?
Srinivas Rao, M.D., Ph.D. (03:30):
Yeah, I mean I it's.
It's been a while.
I certainly took some of thebasic engineering class.
I mean I'd always played withelectronics.
Ben Comer (03:40):
Yeah.
Srinivas Rao, M.D., Ph.D. (03:40):
It's something I'd always been
interested in.
So I had a pretty intensive Ihad an intensive, literally
intensive introductory physicsclass freshman year, enjoyed it
a lot.
Really small class was likeseven of us, but it was more.
You know, I met a lot of peoplethat were really strong on the
theoretical side and through thecourse of that class met a lot
of people that were reallystrong on the theoretical side
(04:02):
and through the course of thatclass met a lot of people that
were really strong on themathematical side of physics and
so just realized that you know,it's probably a better fit for
me to go into the engineeringside of things.
Ben Comer (04:17):
And you were at Texas Instruments, I think in the
TI-81 and TI-85 years, is thatright?
And did you work on thoseproducts?
Srinivas Rao, M.D., Ph.D. (04:27):
I worked on digital signal
processing chips and these werejust summer internships, I guess
, and very much in keeping withwhat I was doing as an undergrad
, which is really signalprocessing, which fundamentally
is not that different fromneuroscience, right?
So this was electronicapproaches to signal processing,
(04:47):
the hardware associated withthat.
I actually did some very earlywork on AI technologies.
I mean, it wasn't so muchconvolutional neural networks
back then, but more linear-basedneural network technologies.
These are really the verybasics and so implementation of
(05:08):
that on signal processinghardware as well.
Ben Comer (05:10):
That was at Texas Instruments.
Srinivas Rao, M.D., Ph.D. (05:12):
No, that was actually as an
undergrad.
Ben Comer (05:15):
Oh, as an undergrad.
Okay, and then what kind ofmade you decide to apply
engineering to brain science, gofrom electrical signaling to, I
guess, a different kind ofelectrical signaling?
Srinivas Rao, M.D., Ph.D. (05:27):
Yeah, I mean, I think that was really
it.
So all of my undergrad work wasaround biomedical applications
but it was pretty obvious therewas a strong disconnect in the
language that engineers use andphysicians use or, you know,
biological researchers use, andit just seemed a very obvious
niche for me to understand thosetwo languages and kind of be
(05:48):
able to work within that spaceand bridge that space.
And so that's where I went.
And again I had this interestin neural networks and how
neural networks in the brainprocess information and how that
is distinct from how a computerand say, you know all the
digital signal processingtechniques I'd learned.
So that's what.
(06:08):
That's kind of what got meinterested in the MD PhD side of
things.
Ben Comer (06:14):
Got it.
Maybe we can talk about theformation of atai next.
Who was involved?
How did it come together?
Srinivas Rao, M.D., Ph.D. (06:23):
So it actually preceded me by a
little bit, right.
So it was in 2018, and it wasChristian Angermayer, Lars Wilde
and Florian Brand.
Those are the three initiallythat sort of started.
This all came about becausethere was a desire to fund
(06:45):
Compass Pathways.
So this is in 2018.
It was very difficult forCompass to find funding.
As a developer of psychedelictherapies, Christian was able to
put money in and actually getsome of his friends to also put
money in, like Peter Thiel andothers.
So there was this initial roundof money that went into Compass
(07:07):
and it was, you know it becameevident to and then Lars
actually went into Compass andso Florian stayed with what
ultimately ended up becomingatai.
And you know, essentially thenit was there's lots of other
things that could be.
You know that this company youknow that we could fund, right,
there's other psychedeliccompounds, there's other
(07:28):
compounds, and so that's where atie sort of started and tie all
of Christian's shares andCompass were put into atai, and
so then it was more like afamily office for Christian for
a period of time.
But over the course of 2019,there was a desire to
potentially shift it in aslightly different direction,
(07:49):
look broader than simplypsychedelics.
In fact, the second investmentwas a company called Perception
Neuroscience and that wasostensibly a non-psychedelic,
non-dissociative version ofketamine, so something that
could be taken at home as anexample version of ketamine, so
something that could be taken athome as an example.
So that's actually how I gotinvolved with with atai.
(08:12):
Um, because the co-founder ofuh, perception was actually my
very first boss in the industry,a guy named Jay Kranzler.
Oh, interesting, yeah.
So that's how I got introducedand you know, the initial idea
was for me to uh take the helmat Perception, but in having
discussions with atai and thefolks that I mentioned, you know
, there was an opportunity foratai to go into a very different
(08:34):
direction, which is really anoperating company, and kind of
pursue this hub-and-spoke model.
And that's when I, you know, itmade more sense for me to join
at the atai level and reallybuild up that capability.
So, Lars, Christian, Floriandid not have a biotech
background, right?
I mean, Christian certainly hada background in biotech
(08:57):
investing, but of course that'sdifferent than operating a
company.
So that's what I came on boardto do to really build up that
capability, which I came onboard in January 2019.
And, of course, did exactlythat and built up the team
internally, started to work onsome of the internally developed
assets, including VLS-01shortly thereafter, and also
(09:21):
continued this model of findingcool assets that are outside and
investing in them, and that'sexactly what we did over the
course of 2019, 20 and 21.
Ben Comer (09:33):
I want to ask about the hub and spoke model of a tie
, but before that, you mentionedinvesting early in Compass
Pathways, one of the earliest, Ithink, psychedelic companies,
perhaps aside from MAPS who'sdeveloping their MDMA candidate,
Compass developing I thinktheir lead candidate is a
synthetic psilocybin candidateand you mentioned that
(09:58):
investment was tough findinginvestors.
Obviously there were some kindof hope, high profile investors.
Peter Thiel, you mentioned what.
What could you say about theinvestment landscape then versus
now?
We're going to talk a littlebit about MAPS in a minute and
what happened with them, but Iguess in terms of how the
(10:21):
investment area has changedsince, since you've been
involved in psychedelic drugdevelopment, yeah, it's been a
bit of a roller coaster, right.
Srinivas Rao, M.D., Ph.D. (10:28):
So 2018 was really characterized by
complete pessimism on the spaceand just really thinking of it
as kind of a crazy idea, right.
So why would you do psychedelic?
You know what's the benefit andis this even a thing with the
agency?
I think what helped catalyzethings to some degree was
actually approval in early 2019of Spravato, which is a, you
(10:52):
know, of course, were wherethere was a lot of investment.
You know, interestingly, withCOVID, of course, there was a
lot of money that went into thestock market and there was a lot
(11:13):
more speculative bets that wereplaced.
You know, broadly speaking,neuroscience is considered a
speculative bet and certainlypsychedelics within it was.
You know it was speculativesquared in some sense, lots of
money went into that space, tons, lots of smaller companies were
created then.
And then, you know, after 21,there was a bit of a winter in
(11:35):
biotech and in fact, the latterpart of 21 is when things turned
and that's been pretty much howit's been for some time.
You know, certainly, as resultscame out, there was ability to
invest.
But it's been a bit more of achallenging time and I think
Compass struggled with that toowith their phase two results.
I mean there was a lot ofrun-up on their stock going into
(11:57):
that result or preceding thatresult, but once the results
came, it was really, you know,stock price went down pretty
significantly.
So it's been a bit of achallenging time.
That's not to say that goodassets have not been able to get
invested in, because theycertainly have.
Early this year well, I thinkpost-election and early this
year, things were considered abit more positive.
(12:20):
There was a lot of, you knowthere was a bit of a Trump bump,
et cetera, in terms of generalmonetary policy, you know,
cutting taxes, et cetera,potentially leading to more
investment.
And then there was also thewhole thing about RFK that has
been said to have a morepositive stance on psychedelics.
I think that you know that was.
(12:42):
I don't know where that's allnetting out now.
I mean there's been a lot ofturmoil that you know, that is
obvious at the federal level andhow that's going to impact
things.
I know that, for example, youknow we just announced that our
VLS-01 trial, the Phase 2 trialwe just had a, you know, just
dosed our first patient.
(13:03):
What has been apparent intalking to investigators is that
you know there's been a lot ofchallenges with getting DEA
licensing because of all theturmoil at the agency.
I don't know at this point.
I mean it's just we just needto let some of this settle out,
I think.
Ben Comer (13:20):
Right, and that's.
That's DEA, drug EnforcementAgency which you need approval
from in order to conductclinical trials on on these
kinds of substances.
Just one.
I have one more question, justabout your, your background, dr
Rao.
I'm curious about if there werelearnings that you were able to
bring from past non psychedelicexperiences at companies like
(13:43):
Cypress Biosciences.
Non-psychedelic experiences atcompanies like Cypress
Biosciences we mentioned Kyalin,you worked at Retrophin, at
Axial Biotherapeutics, at others.
Were there specific learningsor insights that you picked up
at those companies that helpinform the therapeutic strategy
(14:04):
at atai?
Srinivas Rao, M.D., Ph.D. (14:05):
Yeah, I mean I think, well, there's a
couple of things, there's manythings actually.
You know all of those,including DepoMed, by the way
DepoMed too, right?
I mean essentially neuroscience, certainly, and mental health,
adjacent in many ways.
So, particularly if you startcounting things like chronic
pain, which has a huge affectiveelement.
More importantly, the generalstrategy for clinical trials is
(14:26):
pretty simple.
I sent a similar.
I should say you know they'reall using patient reported
outcomes.
You can't ask a pay.
You can't measure objectivelysomeone's pain level.
You've got to ask it.
You can't ask.
You know there's no biomarkerfor autism.
Really, you have to ask thepatient how their socialization
is and their caregivers, etcetera.
(14:47):
So the trials in many ways aresimilar across all of those
indications.
But I think the most importantelement for me has always been
starting with the end in mind,right Starting with, you know,
taking a physician's perspective, like what are we trying to
accomplish?
What is it that's going to?
You know, what's the gap thatwe're trying to fill, the unmet
(15:09):
need, but really keeping thepatient and the physician
perspective in mind and thinkingabout commercialization from
the get-go.
That is actually why VLS-01 isthe way it is.
It was a decision early on tosay you know, there are
challenges with a very longpsychedelic experience.
It demands new infrastructure,at least adaptation of existing
(15:30):
infrastructure.
So let's try and take somethingthat we believed would be fully
fleshed out by the time we wereready, and that was, you know,
the J&J infrastructure.
If anybody can put togetherinfrastructure, it is J&J right.
They've got the muscle to dothat.
Anybody can put together aninfrastructure it is J&J right,
they've got the muscle to dothat.
And Spravato launched into atough time.
They got approval in 2019, as Imentioned, but of course, got
(15:56):
hit with COVID shortlythereafter, and this is an
in-clinic kind of therapy.
So they had a very rough fewyears, but they cracked the code
, as you'd anticipate a companylike J&J would.
They were able to turn itaround, understand what
reimbursement looks like, puttogether the appropriate
cookbook for the sites to beable to deliver this therapy and
deliver it in a manner that'scost-effective for them.
(16:18):
I mean, if the sites are notmaking money the clinical sites,
the doctor's offices then it'snot going to work.
But they were able to crack thatcode and you know they hit.
They went over a billiondollars last year.
930 million of that was roughly930 million of that was in the
US and it was about 50,000patients give or take.
(16:41):
So if you think about that, fora second 50,000 patients out of
roughly 3 million or so withtreatment-resistant depression.
So I think there's lots ofavenues here.
But again, it was always aroundkeeping the end goal in mind
and we made a bet on Spravatoand Spravato infrastructure and
I think that's been borne out.
Ben Comer (17:02):
Yeah, so it sounds like that approval and launch of
Spravato was pretty important,perhaps not just to a tie, but a
number of companies that arefocused on this space.
Is that fair to say?
Srinivas Rao, M.D., Ph.D. (17:15):
Yeah, I would say so.
Ben Comer (17:17):
Yeah.
Srinivas Rao, M.D., Ph.D. (17:19):
Yeah, go ahead.
Yeah, I was just going to saythat of course, the Lykos thing
was the opposite in some ways,right, that really caused a lot
of.
That, did cause a markedpullback in space last year.
Ben Comer (17:30):
Yeah, let's.
Let's talk a little bit aboutthat, since you bring it up.
MAPS, the MultidisciplinaryAssociation for Psychedelic
Studies, spun off a commercialorganization called Lykos, which
was created to essentiallyreceive approval and
(17:50):
commercialize their MDMAcandidate for post-traumatic
stress disorder.
Widely thought that it would beapproved by FDA, including by
me.
It didn't.
It didn't happen.
There was an advisory committeewhere some I think, at least
from MAPS perspective unexpectedtopics came up.
(18:11):
The advisory committee votedagainst approval.
The FDA followed that lead,didn't approve it, requested
some additional trials, whichhas now led to some layoffs and
reorganization at Lykos.
What, what went wrong there?
I mean there was.
It was hard to find anyone whosaid, who didn't think that that
(18:35):
product was going to beapproved in August of what?
2013?
2014.
Srinivas Rao, M.D., Ph.D. (18:42):
Yeah, I was one of those that wasn't
quite so sure.
So this is one of those weirdones where you know, generally
speaking at this point, whensomething is going, you know
when something has beensubmitted.
I, you know, I have a prettygood sense of whether or not
it's going to get approved.
I was not convinced of this one, but I also was just saying I
really don't get it.
I really can't put odds on thisone, because there were weird
(19:06):
political pressures that pushedit in one way.
But then there was a datapackage itself, even stuff that
we knew about prior to thebriefing book being released for
the AdCom.
That didn't make a lot of sense.
I didn't make a lot of friendsat a conference about I don't
know.
It was a year, year and a halfago when I said I don't know if
it's going to get approved.
I really don't have a sense ofit.
So why did I say that?
(19:26):
I mean, there's a couple ofthings.
First of all, the generalpremise didn't make sense to me
that it was a drug that wasassisting therapy, because
therapy isn't the purview of theagency.
That's kind of obvious, right.
You can't say that as a labelindication, because that's not
what the agency does.
Now, there are ways of sort ofgetting around this.
(19:53):
Right, you can say listen,there are therapies that are
standard of care forpost-traumatic stress disorder,
right, there's dialecticalbehavioral therapy, there's
exposure therapy, there's a fewothers.
So what we are going to do isget those patients that have
PTSD.
We're going to bring them in,we're going to start them on
standard of care therapy onejust to make it simple and then
we're going to give them MDMA orwe're going to give them
(20:14):
placebo, not a problem, that's aknown modality, right?
The FDA has done this withopioid use disorder drugs.
Right, you had their part ofMAT, medically assisted therapy
Totally cool.
It's done with GLP-1s.
Glp-1s are supposed to be usedin the context of other health
(20:35):
interventions, like eating aswell as exercise, et cetera, to
affect weight loss.
Right?
The agency doesn't regulatethose things.
It's fine.
So there is a path.
But you know they went off thereservation a little bit.
I mean, the therapy wasnon-standard, completely
non-standard.
It was completelynon-standardized.
(20:56):
And then they had this wholenotion that the therapist had to
be in the room.
So there was therapistfunctional unblinding, which is
totally new, right?
That's just not a thing that'sever been dealt with before.
So not only were they trying toget therapy approved, they
wanted to get something that wasnon-standard approved.
And then they were doing oddthings like having the therapist
in the room.
So then the therapist knowswhether the patient got a drug
(21:18):
or a placebo and they will adapt.
Right, they will adapt how theyapproach the patient.
This is what the FDA wasconcerned about.
There was other stuff that cameout once the briefing book was
released and once the AdC omitself was released, but just
the basic premise of the stuffthat we knew about was
(21:38):
problematic.
That's what gave me pause.
Oh, the final thing, of course.
Course is just the size of thetrials.
80 patients, ish times two isjust very small for phase three,
for a um, not orphan,indication, let's just put it
that way.
It's a.
You know PTSD is pretty common,right you would?
(21:59):
You know you compare it toCompass, that's a thousand
patients.
Compare it to all the othercompanies out there.
I mean no one is under 500patients, I believe.
I mean you can double checkthat.
But you know that's a kind of anormal thing and the FDA, it
just makes sense.
You need to understand adverseevents.
(22:20):
You can't go in with thepremise saying this drug is
obviously works and it'sobviously safe.
You have to go and demonstrateefficacy.
You have to demonstrate thesafety.
You need to understand adverseevents that are occurring in 1%
of patients or more.
Resolution would be good, but1% demands that you do 300
patients.
On drug, there's this roughrubric which is the three.
(22:43):
You know the three X role.
So you didn't get any of thathere.
So I think it was one of theFDA reviewers or what you know
was basically like obviouslyvery politically savvy, but
basically said well, we didn'tknow how to put the label
together.
That's it.
We don't the data.
We don't understand.
We don't understand the safetydata that we're concerned, we
(23:05):
don't understand it and we don'tunderstand.
Ben Comer (23:09):
Right and, as you said, FDA doesn't regulate
therapy and I'm sure there wasthe issue of having to tease out
, you know how much of therapywas contributing to the efficacy
if they're paired together.
Do you think MAPS went in thatdirection because they needed
that aspect to deliver theoutcomes, or it was just kind of
(23:30):
a mistake?
Srinivas Rao, M.D., Ph (23:36):
outcomes or it was just kind of a
mistake.
They just had very fixed viewson how things should happen and
I think they frankly, over theyears they just went against the
establishment.
That was kind of the thingright, and I think that's what
caused some problems there.
There are pathways that makesense and I think those pathways
are suitable for MDMA, ahundred percent suitable, like
(24:00):
the stuff I told you about.
But they chose to go in adifferent direction.
Ben Comer (24:06):
Right right MAPS, Lycos may have created some of
their own challenges, but thereare certainly challenges that
are unique to psychedelic drugdevelopment, culturally, perhaps
, scientifically.
What can you say about thoseand maybe how a tie is thinking
about overcoming thosechallenges?
Srinivas Rao, M.D., Ph.D. (24:26):
Yeah, I mean, from the outset, my
view is this is just anotherclass of compounds, right, this
is just another class of drugs.
I was familiar with all of theketamine work.
I mean, ketamine was quitegroundbreaking because it did
affect benefits immediately,right, and there was some
persistence up to a week to twoweeks, so that was pretty cool.
This is sort of the next stepof that, the next iteration,
right, and there was a lot ofliterature that supported that
(24:51):
general motion, including smalldouble-blind placebo controlled
trials.
But to me it was just anotherdrug.
That, of course, isn't how thesethings are perceived externally
, right, there's a lot ofcultural overlay with these
compounds, which I've alwaysfound interesting, you know, and
there was a lot of discussionsthat these shouldn't be
commercialized, blah, blah, blah.
Okay, again, I never focused onthat personally.
(25:17):
It's just let's do the rightstudies, do it.
The FDA has been verysupportive of these compounds, I
mean all the way through, withbreakthrough designations and
everything else.
They like it, they recognizethe need in the space there.
There's a known pathway.
Just let's follow that, let'sgo do it and let's generate the
(25:37):
data that's needed.
Now, again, this is weird,because this is one of the
reasons that I ended up goingwanting to do discovery work
very early on and finding newcompounds because again there
was this to me, a surprisinglevel of cultural overlay with
dmt and with 5-methoxy dmt andpsilocybin.
It's like, okay, fine, let'sjust go create some new
(25:58):
compounds so we can sidestep allof that, um, all of that stuff.
I think over time that's gottenbetter, though.
I mean, there's, you know,there's there's certainly
pockets and there's individualsthat continue to believe that
there's something above andbeyond the chemical compound
here, and that's fine, thatcontinue to believe that there's
something above and beyond thechemical compound here, and
that's fine, you can believewhatever you want.
But there's certainly a muchmore mainstream kind of view,
(26:21):
mainstream being in the sense ofphysicians et cetera.
But yeah, these are interestingcompounds, they're powerful
compounds.
Pharmacology to some degree isunderstood.
I mean, at least these would bethe 5-HT2A receptors.
So let's go do something withthat game changer in some mental
(26:56):
health disorders.
Ben Comer (26:57):
But I'm sure that you also encounter physicians and
patients that will hear you knowpsilocybin or ketamine or DMT
or MDMA and think you know drugillicit substance.
Do you encounter thatphysicians who are sort of less
willing to refer a patient to aclinical trial?
Or you know a treatment naivepatient who is concerned about
(27:20):
going into a clinical trial on asubstance like that?
That has something of areputation.
Srinivas Rao, M.D., Ph.D. (27:25):
Yeah.
So I think that on thephysician side it's a little
harder to answer Right.
It's because I have a selectionbias.
The people I speak to, probably, and the people are going into
trials and everything else aremore inclined to do that.
We have done some marketresearch and certainly around
MDMA itself there was somenegative views because, like,
this is a party drug and youknow why are we giving this to
(27:45):
patients.
But that speaks more to marketbuilding and physician education
to me than it does about thecompounds themselves.
It's all about the data for me,and I think a lot of doctors
ultimately kind of fall intothat same bucket.
I mean sure there'll beindividuals that are relatively
more dogmatic about it.
You know someone that wentthrough the seventies and had a
(28:10):
very negative you know negativethoughts about how it was
handled and how you know theLeary and others kind of you
know positioned it.
I mean sure there'll be thoseindividuals and patients also.
I mean you know we are goingfor psychedelic, naive patients.
We do not want patients thathave a lot of experience because
(28:31):
that has problems with thetrial, which was something else
that came up with Lykos, by theway.
They had like 40% of patientsthat had taken MDMA before, so
they had kind of a sense ofwhether or not they were getting
placebo.
So we want naive individuals andthere is absolutely anxiety in
many individuals going into itbecause it is such an unusual
experience and there's fearsthat things can come up, et
(28:53):
cetera, and that's kind of whatyou're going for to some degree.
I mean, you know, at leastthat's one of the hypotheses
that the benefit is coming frombeing able to process things
that haven't been processed.
Again, that's a hypothesis andwe don't have to flesh that out.
But you know so there'sabsolutely anxiety.
That's one of the other reasons.
I kind of like shorter durationcompounds the first one, the
(29:14):
first experience.
You know at least they get asense of what that's like and
they can maybe get anotherexperience.
You know, if it's a super longexperience they can feel kind of
you know that that can be evenmore daunting.
It's like all right, well, it'sonly two hours.
You know, right through twohours like oh geez, it's eight,
six hours, eight hours, 10 hours, that's a long time.
I mean just mentally kind ofgoing into it.
Ben Comer (29:36):
Not to mention the infrastructure required,
physicians.
You know, monitoring et ceterafor that long of a period of
time could get could getdifficult.
I want to talk about a atai'sbusiness model.
You have your own developmentcandidates as well as strategic
investments in other companies.
We mentioned Compass already,but Beckley SciTech Recognify
(30:01):
Life Sciences.
Am I saying that correctlyRecognify?
Can you kind of outline and youmentioned hub and spoke model,
but can you explain the thinkingbehind this business model?
Srinivas Rao, M.D., Ph.D. (30:12):
Yeah.
So again, we had a more complexmodel for the most part when we
started right.
So we were pretty open to allsorts of things, including
incubated assets like our DMT-1,blso-1, as well as our MDMA,
empo-1.
But we also did invest in othercompanies and that could be a
majority investment or minority.
We obviously had some publicinvestments as well, including
(30:33):
Compass.
So we were open to manydifferent things.
We had a lot of assets thatwere in development, early
development.
You know, the reality is thatwe had high bars for everything
for moving an asset forward, andthere was a lot of organic sort
of.
You know, there's a lot ofpruning for that reason and you
know, as we now advance intolater stage trials, the
(30:56):
resources demands become a lothigher.
So we've certainly winnowedthings down.
The primary focus for the mostpart is on our internal assets.
We did make an investment inBeckley in January of last year,
the reason being that we likethe team, we like the company,
(31:17):
we have a close relationship.
We've had a relationship withthem for an extended period of
time.
Philosophically, they're verymuch aligned with us with the
short duration psychedelics.
So they had BPL-03, which is5-methoxy-DMT.
It's distinct from DMT, whichis what we're developing
pharmacologically distinct butsame to our paradigm.
So we are very much inalignment on that.
And these two assets are thefurthest along in terms of short
(31:39):
duration therapies, by farright.
So these are both two-hourassets and kind of a single
administration, very much justkind of drag and drop into
Spravato paradigm.
Single administration monitorthe patient, see how they're
doing and can send them home twohours plus after they get their
dose.
So very simple.
So that's why we made thatinvestment.
(31:59):
Now, Recognify was an older one.
It's non-psychedelic actually.
It's for cognitive andschizophrenia Very interesting
compound with strong preclinicaland clinical data, actually for
pro-cognitive effects.
And the mechanism by which ithas these effects was very much
something that actually cameback to my PhD work, which was
(32:24):
actually around working memoryand in a schizophrenia lab.
So it was cognitive impairmentsand schizophrenia.
But there was a lot ofinteresting stuff with the
pharmacology of that drug thatsuggests that it could be very
beneficial for this patientpopulation.
The unmet medical need isenormous with schizophrenia, the
cognitive impairment element.
So just really believe in theindication, believe in helping
(32:46):
those patients out.
Challenging indication, withouta doubt.
But yeah, there we are on about60% With Beckley, we we got
about a third with beckley.
We have some, uh, we have, youknow, warrants that can take us
closer to 50.
We have a lot of shareholderrights, um as well, and, you
know, generally speaking, we'vehad the idea was to have some,
you know, depending on results,depending on where both
(33:08):
companies are at, potentiallybringing the two companies
together, um, at some point.
Ben Comer (33:17):
Yeah, schizophrenia is a really interesting one and,
of course, there have been somenewly approved and exciting
drugs in that space.
I've been coveringschizophrenia off and on for a
number of years and I rememberwhen Abilify tried to do the,
you know, the digital pill tosolve the adherence issue, which
didn't exactly work.
But, but these drugs are newmechanisms, right, the potential
(33:40):
to really make a change in thatdisease.
But you know, there were anumber of years where there just
wasn't much in development forthese patients and, like you
said, it's a.
It's a a.
It's an unmet need, to say theleast.
Atai, getting back to atai Lifesciences you experienced some
(34:02):
disappointing clinical resultsin 2023 with PCN 101, led to
some layoffs, a refocusing ofthe pipeline.
How has well?
Let me ask this how has ataichanged since its inception,
since you started in 2018?
Srinivas Rao, M.D., Ph.D. (34:21):
Yeah, so well, you know.
Just to answer the first thingfirst negative results are part
and parcel of this industry,right?
Absolutely.
If you knew the answers beforegoing into the trial, then you
don't need to do the trial,fundamentally, right, right, so
that's part and parcel.
I mean, as I mentioned, there'sbeen a simplifying of the model
(34:42):
, right?
That's what we, certainly whatI've been going for to keep the
team more focused on a smallernumber of assets, but really
going all in.
Smaller number of assets, butreally going all in.
And part of that isunderstandable because we did
run many, many clinical trialsacross a number of assets, I
mean from KUR101 to GABA'sGRX917 to, of course, the
(35:05):
multiple phase ones with PCN101and the phase two as well.
So we ran a lot of studies andwe had high bars for going to
the next step and many justdidn't make it, and that is okay
.
That is how this, that that'show this process works.
Ben Comer (35:22):
Yeah, and yeah, sorry , go ahead.
Srinivas Rao, M.D., Ph.D. (35:23):
No.
So just again, just kind ofsimplifying a lot, that the
company is much more lean andmean at this point and really
targeting the things that matterto us right now.
Ben Comer (35:34):
Right, how do you and , as you say, you know this,
everybody has a disappointingclinical result, something
doesn't go exactly as as hopedor planned.
How do you recover, you know?
How do you kind of take that inand and move forward the next
day after you get, you know, adata?
Srinivas Rao, M.D., Ph.D. (35:53):
read like that yeah, I mean, I think
this is one of those thingswhere experience is really
helpful.
Right, you, you, there's always.
I mean, I, I never say weunderstand that, I never say
that there's.
Yeah, this is a slam dunk.
Right, that's just not thelanguage I will use.
I think that you always learnsomething.
(36:13):
It's always massivelydisappointing that day and you
know, the next day you kind ofpick it up and take it from
there Like what did we learn outof this?
You know you do premortems,premortems.
You also do postmortems, Likewhat could have gone better,
what are some ideas?
You know we spend a lot of timewith a PCN 101 readout,
analyzing the data and cuttingthe data in many, many different
(36:34):
ways to try and understand whathappened, what could have
happened there, what could wehave done differently.
And you know that's again,that's just how it, that's just
the nature of the beast.
Ben Comer (36:45):
That's the way it goes.
That's right.
What are your key prioritiesand upcoming milestones that
you're most focused on right now?
Srinivas Rao, M.D., Ph.D. (36:55):
Yeah, we have a really exciting
roughly 12 months or so 12 to 15months, actually it's about 12
months.
At this point we're in March,so we have four phase two
readouts coming up.
So BPL-003, the Beckley assetagain the company where we own
about a third of the company, athird it will be reading out
with a Phase 2 in the middle ofthis year.
(37:17):
In fact we had a press releaserecently indicating that the
last patient had been dosed.
Recognify, the cognitiveimpairment and schizophrenia
trial will also be reading outin the middle of this year.
In fact that trial and theBPL-003 trial are kind of on top
of each other at the moment interms of which we'll read out
first the VLS-01, the internalDMT asset, we'll be reading out
(37:39):
in approximately a year, withinapproximately a year for the
treatment-resistant depressionstudy.
And then we have another asset,emp-01, which is our MDMA, so
single enantiomer of MDMA, whichwe're developing for social
anxiety disorder.
It's an earlier stage trial, soit's a phase 2A proof of
concept trial.
So that also is anticipatedreadout in approximately a year.
Ben Comer (38:02):
Okay, and where does Compass stand right now?
I think they had delayed a fullreadout on their phase 2
program.
Correct me if I'm wrong aboutthat, but what's next for them?
Srinivas Rao, M.D., Ph.D. (38:14):
Yeah, I mean it wasn't quite that
they delayed, it's just thatthey're waiting until the trial
is completed.
So their trials have sixweekend points or two phase
three.
The two core phase three trialshave six weekend points but
then they have a blindedobservation window that goes out
to six months.
So the challenge there is thatif you want to read out from the
primary it is an interimanalysis, essentially right, so
(38:36):
you can wait until all thosepatients are in.
You can do an interim analysis.
There are concerns sometimesabout well many times about
disclosing efficacy results froman interim analysis because
there's a, you know, there's a,there's a recognition that that
can impact the rest of the trialthat's currently still on.
Oh, I see that's a challengethat they kind of came up
(38:56):
against and so what they haveguided?
So in the end I don't know that.
I mean there were some delays,don't get me wrong, but I don't
think they were quite asegregious as people may have
thought.
So their first Phase 3, theso-called 005 trial, their
interim read on the primaryanalysis, is in the middle of
(39:16):
this year.
Apparently it's a somewhatlimited data set for the reason
I just outlined, because thetrial is still ongoing.
The full readout is, I believe,at the end of this year.
I'm not sure if they guide itdifferently, but I'm pretty sure
it's at the end of this year.
So around the end, let's callit.
For the second trial, the 006trial, they are, I believe,
going to give the full datareadout in the middle of next
(39:38):
year.
So I think that's their currentguidance.
And once those two are read out, there's obviously some open
label work that's alsocontinuing.
You know the trials where youkind of roll into from the trial
that you roll into from thesetrials.
So yeah, that's kind of theirtimeline now.
So you know getting all thesewrapped up in kind of the middle
(40:00):
of 26,.
You know potential for, youknow approval sometime in 27,
essentially at this point.
Ben Comer (40:07):
Announcing efficacy data on an interim basis.
Does that have more of animpact if your endpoints are not
tied to you know, an objectivebiomarker?
If it's, you know, getting backto what you were saying about
the difficulty in a number ofCNS areas having a more
subjective kind of patientreported outcome, or does that
happen with efficacy datarevealed?
(40:30):
You know in other, you knowmuch more specific biomarker
type disease areas.
Srinivas Rao, M.D., Ph.D. (40:37):
Yeah, I have to admit I have much
less experience with things likecancer and other indications
like that, where there'sobviously, for better or worse,
very objective endpoints rightTumor-free survival and just
survival in general.
So as a general statement, it'snot considered great to reveal
(40:57):
data efficacy data prior to thecompletion of a trial.
But there may be exceptions forthings like that and certainly
with orphan indications, whereeven open label can be
acceptable.
I mean, even in some cancerindications there's, if you have
a very good sense of thenatural history of a compound,
at some point it becomesunethical to give a drug in a
(41:18):
placebo-controlled study, eventhough that's on top of standard
of care.
I mean, if you've got a prettygood sense that you're saving
lives, at some point it's like,yeah, well, you can't give them
placebo anymore.
So there's a lot more latitudein that context.
Ben Comer (41:32):
Right, there's a lot more latitude in that context,
right, do you?
And it's it's interesting yousay, for better or worse,
because I think about this toowith biomarkers, because you
hear about disease states whereyou know you show, for example,
a tumor has shrunk a certainamount.
The patient may not necessarilyfeel any better or may even
even feel worse.
So there, I think there arepros and cons with a strict
(41:54):
objective biomarker versus amore subjective biomarker.
But my question for you, dr Rao, is do you think that we're
anywhere close to getting to abiomarker in some of these
mental health disease, whetherit's imaging or something else?
And how helpful would that beif you were able to kind of hang
(42:15):
your hat on a biomarker in, youknow, depression, for example?
Srinivas Rao, M.D., Ph.D. (42:19):
Oh man, it would be unbelievably
helpful if we could do it.
I think it's been one of thoseareas that's been very fraught.
People have been trying to dothis for a long time, whether
it's EEG or imaging, et cetera.
I mean, I'm always interested init.
One of the things that's alwaysintrigued me about psychedelics
in particular is this notionthat they can help with
(42:41):
ruminative thoughts.
Right, and that's beensomething that you know the data
has been sort of.
It's not the highest quality insome sense, but a lot of
imaging studies have suggestedthat the default mode network
and things like that you can seesome persistent changes in that
and that may correlate with theefficacy.
Amazing, if that's true, andit's something that I'd love to
(43:03):
explore further.
It's not a regulatory endpointtoo.
Actually validate somethinglike that, which would be
considered a surrogate endpoint,would take a lot, but of course
, it markedly simplifies thingsif something like that can
actually work.
Ben Comer (43:18):
Right.
Several companies now DavidOlson at Delix is one example
that comes to mind are workingon psychedelics that have been
engineered to remove thehallucinatory aspect, the trip,
so to speak.
What's your opinion?
Srinivas Rao, M.D., Ph.D. (43:45):
Dr Rao on whether the trip or an
altered state of consciousnessis needed to deliver the
therapeutic outcome.
So my conceptualization of itis that these compounds are sort
of doing two things right.
The first is that they arecausing a network disruption and
that network disruption ismanifest as a psychedelic effect
, right.
And the second thing they'redoing is causing marked
neuroplasticity.
(44:06):
So how I view it is that you'vegot this frozen snow globe
that's got patterns in it thatare not good, right, that are
essentially, you know, bad forthe patient.
The psychedelic is doing twothings it's thawing it out and
then it's shaking it up and then, obviously, as the drug wears
(44:27):
off, it refreezes and it's got anew configuration.
Then, and for reasons due toregio specificity again talking
about some of these networksthat seem to change their
dynamics and their activity it'sa more helpful configuration
that they freeze back into.
So, in that conceptualization,having something that's not
(44:48):
psychedelic isn't necessarilyhelpful on its own, right.
So that's a theory, of course,and we don't have data to
support it or disprove it at themoment.
So I know that, Delix, I thinkthey pushed their timelines back
.
I mean, I know that they'reworking on a phase two, so
that's going to be very telling.
(45:08):
I think there is avenue, thereare some useful avenues for
non-psychedelic compounds, andthat is to put in conjunction
with therapy.
So if you, you can affectnetwork disruption in many
different ways, one of those istherapy.
That's fundamentally whatyou're doing right.
Cognitive behavioral therapy isa means of addressing negative
(45:29):
thoughts.
That's kind of what I wasgetting at right.
So you could do it all at oncewith the psychedelic, but that's
got psychedelic effect.
Or you could do it a bit moreslowly over time, but maybe more
constructively over time youknow who knows and allow it to
cement in with these compoundsright.
So the way I like to thinkabout that is you know, again, I
(45:49):
mentioned I've done a lot ofwork in pain.
So if you break your leg orsomething, you're likely going
to get physical therapy rightOnce the cast comes off.
Or once the cast comes off oronce the brace comes off, you
can get the most out of thattherapy if you take a ton of
NSAIDs prior to going intotherapy, because it allows you
to create a range of motion, itallows you to really exercise
(46:11):
the joint.
So that's how I think of thesenon-psychedelics and again, it's
all a theory at the moment Idon't have any data to support
that, but you know it's.
We've been working onnon-hallucinogenic or putatively
non-hallucinogenic compounds aswell, so we're intrigued by the
space and it could becompletely wrong.
(46:31):
Maybe they do somethingcompletely on their own and
that's totally cool and that'llbe interesting.
I'm a little suspicious that,and you know we have really done
the team at atai has done afantastic job of elucidating how
this biased agonism is working.
We've got a very good sense ofthat and how the psycho
messenger systems are working toaffect psychedelic effects or
(46:56):
neuroplastic effects.
So yeah, I mean I'm intriguedby this.
Let's see how it all plays out.
I mean there will be somedynamic.
You know I have a hard timebelieving there are no
perceptual effects, to be honest, but it might not rise to the
full level of psychedeliceffects.
It may be something that'sreasonably well tolerated, even
(47:19):
in an outpatient setting, butall of this is TBD.
Ben Comer (47:25):
atai's products, assuming they go forward and are
eventually approved, will theybe administered not in concert
with therapy, in a sense thattherapy is in the label, the way
that it was with Lycos' MDMAproduct, but will there be a
kind of, you know, a strongrecommendation, or how does that
work in terms of, or I guesshow do you think about it for
(47:47):
let's use depression or anxietyas an example?
Will you know, will there be atherapy component to
administering the drug?
Srinivas Rao, M.D., Ph.D. (47:56):
No, we don't have any therapy
component in our administration.
So in fact, for VLS-01, it'spretty limited at the amount of
therapist interactions.
It's an hour prior to dosing,so there's a one hour.
It's, I think that one is anactual visit prior to dosing.
It's really to help prepare thepatient right.
So essentially, to some degree,what is manifesting during the
(48:19):
psychedelic experience is whatyou are kind of thinking about
and what's you know.
There's a suggestibilityelement to it.
So if you are thinking aboutthe things that are bothering
you, like what is it you want tochange, you know, etc.
Some form of intention settingcould be helpful.
At least that's that'sspeculated at this point.
Um, so we do some of that, butwe also have a big part of it is
(48:42):
just giving, is ensuringpsychological safety.
So what can we do to make surethat you know if you're really
struggling?
You know we can teach you boxbreathing, so that's a nice easy
way of kind of settlingyourself down.
So we want to make sure thatyou've got some experience with
that going before going into it.
We have a one hour sessionafterwards.
It's strictly psychologicalsafety.
(49:03):
As I mentioned, things can comeup where this is a well-known
phenomenon, right?
So some history of abuse, somehistory of trauma can come up or
, you know, some memories ofthat can come up.
We want to make sure that thepatient is psychologically
stable, and it's kind of like ifyou had chest pain during
administration of thesecompounds ketamine or anything
else.
You want to make sure thepatient, you flag that.
(49:25):
You want to make sure thepatient is medically stable, so
you'd have a cardiology consultpotentially.
Here it's the same kind ofthing.
Something came up.
You want to make sure thepatient has support, as they
kind of figure that out, soyou'd want to refer them to a
therapist in that context, butthere's no specific therapy
that's outlined for this.
Ben Comer (49:45):
And then is there a therapist or a physician that
will be monitoring, I guess,during the session, similar to,
I think, the way it's done withSpravato.
I want to say it's up to fivehours, but maybe it's less than
that two hours.
Srinivas Rao, M.D., Ph.D. (50:00):
So, yeah, I mean absolutely, the
patient needs to be monitored.
I mean, if you look at the, sothe FDA provided some guidance,
right, some draft guidancearound psychedelic therapies,
and they said that they need twopeople to monitor these
patients, which I think has alot to do with the fact that
what they had been, what wasfront of mind for the agency at
that time was MDMA through Lykos, as well as Compass, and both
(50:23):
of these are the Comp360, andboth of these are long duration.
So I think a lot of it came fromthat.
With these short durationcompounds, you know, what we
have currently is someone in theroom with the patient not
therapeutic, but just monitoringfor safety and, you know, just
making sure nothing untoward ishappening and then we have
someone else that's monitoringthrough a camera, and that's
(50:45):
what we have.
Hopefully, over time, it can bemore like Spravato, where
there's only someone that'smonitoring through the camera
Basic telemetry, making sure theblood pressure and pulse are
not, you know, doing anythingcrazy and then just making sure
that the patient is, you know,is doing their thing but isn't
(51:05):
bouncing off the walls, right?
That's going to need someintervention.
Ben Comer (51:09):
Are there any standardized settings type of
like music playing or anythinglike that in the trials, or do
you anticipate that being usedin practice?
Srinivas Rao, M.D., Ph.D. (51:19):
Yeah, that's a great question.
I mean, people do use that,obviously, for all of these
things.
We have the mask on, becauseyou tend to have more intense
visuals, et cetera.
If you have a mask on, you'renot looking around.
And then we do have music aswell, but the role of that music
is not clear yet.
It's yet another variablevariable at some point needs to
(51:40):
get, uh, um, isolated andunderstood, but right now
there's no data that, one way oranother, you don't want
something that you know you'reprobably not going to listen to
death metal while on thesecompounds, but you know
something that's generallycalming, is probably uh, is
probably not unreasonable right,and you anticipate having a um,
a REMS program similar toSpravato.
Ben Comer (52:02):
That will kind of guide all of those practices
during the administration aswell.
Right, yeah, all right.
Final question for you, dr Raowhat impact do you think
psychedelic therapy couldultimately have on mental health
globally?
Srinivas Rao, M.D., Ph.D. (52:22):
I mean, I think it has a potential
to have a massive impact.
Right, this is just.
Again, it's a marked shift inparadigm.
Esketamine was the first one.
It's rapid resolution symptoms,but it's a lot of
administrations, right, that'sthe challenge.
With Spravato You're going intwice a week for four weeks.
Once a week for the subsequentfour weeks.
It's many hours out of yourweek.
(52:43):
You can't drive home, you'rekind of down for the count for
that day.
This could potentially allowone or two administrations over
the course of, say, four toeight weeks.
That's just a big shift thatcan then get someone into
remission, get many more peopleinto remission.
Having it approved, having itstandardized, allows for
(53:04):
reimbursement so many morepeople can benefit from in the
United States.
That's true elsewhere as well.
You're certainly welcome totake these compounds.
You know, particularly magicmushrooms and other compounds,
but our other materials, ofcourse that's not controlled.
You have no idea what you'regetting and it's expensive, at
least in the United States.
You know, usually these arethese sort of ceremonies and
(53:26):
things are on the order ofseveral thousand dollars.
So there's a very limitednumber of people that can
benefit from just kind of likeketamine.
Right, ketamine typically isaround $500 a pop if you're
doing it and it's out of pocket,as opposed to Spravato where
it's really your copay ordeductible, which is typically
substantially less.
So it's a different paradigm.
(53:46):
It could help a lot of peoplejust from that perspective, and
that's again what we're doing.
And once there's approval inthe US and Europe I mean there
tends to be more it opens thefloodgates to approvals in many
other countries, many otherterritories.
And you're not on that medicalneed Right.
This is one of the greatestcauses of disability in the
(54:07):
world.
Right Fifty percent of peoplewill have some kind of an
affective disorder over thecourse of their life.
It's big.
So this could be a huge step inthe right direction for all of
those patients.
Ben Comer (54:19):
Well, thank you very much for the conversation today.
I really, really enjoyedspeaking with you.
It's an exciting area ofdevelopment in the industry and
we'll be watching atai to seewhat happens.
Srinivas Rao, M.D., Ph.D. (54:31):
Thank you.
Thank you for your time.
Ben Comer (54:33):
That is Dr Srinii Rao , co-founder and CEO of atai
Life Sciences.
I'm Ben Comer and you've justlistened to the Business of
Biotech.
Find us and subscribe anywhereyou listen to podcasts and be
sure to check out new weeklyvideo casts of these
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We'll see you next week andthank you for listening.
(54:55):
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Avantor's portfolio is used invirtually every stage of the
(55:19):
most important research,development and production
activities at more than 300,000customer locations in 180
countries.
For more information, visitavantorsciences.
com or find them on LinkedInex-formerly Twitter and Facebook
.
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