Exactly two months after Atai Life Sciences’ ketamine-like drug failed a phase 2 trial in depression, the mental health-focused company is laying off 30% of staff as it channels resources into pushing candidates through mid-stage trials.
Back in the first week of January, Atai’s PCN-101, a single isomer of ketamine, didn’t meet its primary endpoint of improving depression after 24 hours when compared to placebo. In a fourth-quarter earnings report this morning, the company revealed a plan to “explore strategic options” for the drug, while a separate IV-to-subcutaneous bridging study continues and is expected to wrap up by mid-2023.
A related strategic review of the pipeline will see the company trim back its headcount by almost a third, with general, administration and non-clinical development roles bearing the brunt. The cost savings should extend the company’s runway into the first half of 2026.
“As part of our efforts to further focus our capital allocation towards generating meaningful clinical readouts in the near-term and to optimize our operational efficiency, we reduced our team by approximately 30%,” CEO Florian Brand said in the release.
This is not the first strategic rethink the company has had to make to keep its finances on track. Last August, Atai deprioritized three programs at the same time as disclosing a $175 million loan facility from Hercules Capital. Those changes were expected to keep the company afloat into 2025.
Atai’s lead asset is now RL-007, a modulator of the cholinergic, glutamatergic and GABA-B receptors that’s in a phase 2 trial in patients with cognitive impairment associated with schizophrenia. Initial results from the 230-person trial are expected in the second half of the year. The company also used its earnings release to flag up GRX-917, a deuterated version of approved anxiety drug etifoxine, which is set to enter a phase 2 trial.