Is ATAI Stock a Buy After the IPO?

ATAI Life Sciences will go public this week. And investors wanting to cash in on one of the hottest medicine and mental health trends need to pay attention to this stock.

The ATAI IPO will raise around $100 million that the company can add to its already sizeable cash on hand, about $97 billion as of the end of 2020.

ATAI stock could be the biggest psychedelic stock opportunity on the Nasdaq to date. This trend will continue to grow with further research into psychedelics for mental health treatment. Right now, it's just the beginning.

The state of Oregon legalized psylocibin in late 2020, and other states are expected to follow suit as more research emerges. States including Colorado, Michigan, California, Massachusetts, Iowa, Vermont, New York, and New Jersey have all made efforts to at least decriminalize it in the last five years.

The adoptions of medical psychedelics should follow a similar pattern to marijuana.

Cannabis legalization hit milestones last year as New Jersey, Arizona, South Dakota, Montana, and New York became the latest states to legalize marijuana in 2020. This represented a massive step toward mainstream adoption and federal legalization.

Since we expect roughly the same pattern from psychedelics, investors should be excited about ATAI stock as it goes public. Here's what you should know about this stock.

What Is ATAI?

ATAI is a Berlin-based biopharmaceutical company developing psychedelic drugs for the treatment of mental health conditions. It works to develop psilocybin, ketamine, DMT, and MDMA into treatments for various mental health conditions, including depression.

Currently, ATAI has 10 development programs and six enabling technologies in progress. Several of them could reach potential markets of over $1 billion in sales.

The company currently researches efforts into the use of psychedelic drugs to treat anxiety, depression, opioid addiction, brain injury, schizophrenia, and post-traumatic stress disorder (PTSD).

All of these drugs have potentially massive markets.

Founder Christian Angermayer is an entrepreneur and investor with a fantastic track record of success. He founded Apeiron Investment Group, a family office and merchant banking business. His firm focuses on fintech and crypto assets, technology, life sciences, and real estate.

He has been involved in more than 40 successful IPO-and M&A transactions either as a founder, investor, or banker.

Co-Founder Lars Wilde has been active in tech and biotech investing. He was the founder of a European direct-to-consumer kitchen and BBQ brand. He also helped build VivaNeo, the largest European in-vitro fertilization group.

Wilde has been treated with psychedelics for depression and is a huge believer in the potential of these drugs. He was treated with psilocybin for treatment-resistant depression and anxiety, and the drug eliminated his symptoms.

ATAI's Psychedelic Portfolio

ATAI Life Sciences owns controlling stakes in 10 companies and has large stakes in six other companies working on the use of psychedelic drugs to treat mental health conditions.

Its portfolio includes Compass Pathways Plc. (NASDAQ: CMPS), the largest psychedelic drug company to list on the stock exchange so far. Compass currently has an ongoing phase 2b trial of COMP360 psilocybin therapy that management believes is the largest clinical trial to date in psilocybin therapy.

As that research progresses, it is already talking to integrators to design phase 3 of the trials.

DemeRx IB is another portfolio company working on using ibogaine, a psychedelic that occurs naturally in certain African Shrubs, for the treatment of opioid addiction. Studies have shown that using ibogaine can lead to significant reductions in opioid cravings.


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Opioid addiction has reached crisis levels in the United States, and effective treatments for this major social and healthcare problem could be a massive market for ATAI.

Portfolio company EmpathBio is developing an oral formulation of an MDMA (ecstasy) derivative that can be used to treat PTSD. Multidisciplinary Association for Psychedelic Studies recently sponsored a phase 3 study on using MDMA for PTSD, and the results were outstanding. We could see MDMA treatments for this condition as early as 2023, according to some industry observers.

ATAI has constructed its portfolio of companies so that the founders and scientists still have the benefit of being entrepreneurs who will reap the success of their efforts. However, they can pool resources, technologies, and services like human resources and accounting to streamline the process.

ATAI is also using a milestone-based funding approach to efficiently allocate capital while ensuring that development constantly progresses. Companies making progress get the cash to continue. Those that don't see progress can be defunded, and the money goes to more promising efforts.

Should You Buy ATAI Stock?

Psychedelic drugs for mental health issues have been experimented on since the 1950s with promising results. The counter-culture of the 1960s suggested that people use psychedelics to, as Timothy Leary once said, "turn on, tune in, drop out." As a result, most of the research was suspended under new drug laws passed by the Nixon administration.

Now, the pendulum has swung other way, and research is once again being funded. Depression, anxiety, and addiction are massive problems, and COVID-19 has made them worse.

The research so far indicates that psychedelic drugs could be useful in helping to manage and even solve some of the most serious mental health problems the world faces right now. The payoffs for early investors could be enormous.

ATAI is well positioned to be a huge player in the psychedelics industry.

Peter Thiel, an early investor or founder in companies like Facebook Inc. (NASDAQ: FB), PayPal Holdings Inc. (NASDAQ: PYPL), and Palantir Technologies Inc. (NYSE: PLTR), is an investor in both ATAI and Compass Pathways.

Credit Suisse, Citigroup, Cowen, and Berenberg are the underwriters of the deal.

If the shares do not pop too much after the deal closes, owning this stock could be one of the better long-term opportunities of the next decade.

Three Stocks Even Better Than ATAI

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Dozens are overpriced and overhyped - you should ditch them ASAP.

But Shah says THESE three stocks are "screaming buys."

All three are trading at a discount... they're under-the-radar companies most people haven't even heard of... and they have massive tailwinds ready to send their share prices into the stratosphere.

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