ATAI - NASDAQ

Good morning and welcome the ATAI Life Sciences Second Quarter 2021 Financial Results and Corporate Update Conference Call. Currently all participants are in listen only mode. This call is being webcast live via the news and events section of the company's website at www.atai.life and is being recorded. For opening remarks I would like to introduce Greg Weaver, Chief Financial Officer of ATAI Life Sciences. Please go ahead.

Thank you and good morning. Welcome to our second quarter 2021 ATAI Life Sciences financial results and corporate update conference call. The press release reporting our financial results is available in the investors and media section of our website at www.atai.life and our quarterly report on Form-10Q ended June 30th 2021 will file today with the SEC. Joining me today are Florian Brand, our co-founder and CEO. Dr. Srinivas Rao, our Co-Founder and Chief Scientific Officer; and Christian Angermayer, Founder and Chairman. During today's call, we'll be making certain forward looking statements that are intended to be covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. While these statements represent management's current expectations of projections about future results, and performance as of today, the ties actual results are subject to many risks and uncertainties that could cause actual results to differ materially from those expectations. In addition to any risks highlighted during the call, these statements are subject to various risks that are described in our filings made with the Securities and Exchange Commission, including our final prospectus filed with the SEC on June 21 of 2021. Your caution not to place undue reliance on these forward looking statements which speak only as of today, August 16 2021 and except as may be required by applicable law, ATAI disclaims any obligation to update such statements, even if management's views change. And now like to turn the call over to ATAI's CEO Florian Brand, Florian.

Good morning, everyone. Thank you all for joining our first earnings call, pulling our successful completed IPO in NASDAQ in June, where we raised $259 million. We are thrilled by the enthusiastic response to our mission from the investor community. And we intend to use these proceeds to continue advancing our decentralized drug development platform in two ways. First, by executing on our existing pipeline, and second, by continuing to incubate, acquire and invest in new programs, and enabling technologies. With our unique approach, we aim to become the leading drug development company focused on mental health, we will do so by transforming and advancing the treatments of patients with the ultimate objectives to heal mental health disorders so that everyone, everywhere can live a more fulfilled life. And now, it gives me great pleasure to introduce you to my visionary co-founder and our Board Chairman, Christian Angermayer, Christian?

Thank you everyone. With my Co-Founders and the entire ATAI team, I share the common aim of transforming the treatment of mental health disorders and exploring solutions offered by unconventional approaches, including psychedelic compounds. I want to take a few moments to discuss ATAI's origin and my commitment to ATAI. In this context, it is important to emphasize that I'm not only part of the founding team, but also made a significant investment in ATAI myself. And as many of you know, everything started with my own first psychedelic experience. This experience was in short, the single most meaningful experience in my entire life. In addition, my friend and our Co-Founder, Las Welder [ph], who suffered greatly from treatment with systemic depression, sound healing and succeeding [ph] therapy. Those experiences from the basis from my desire to invest heavily in rigorously researching therapeutic potential of psychedelics for mental health disorders. I hope you leave this call with a real appreciation for both ATAI's progress to date and what I hope will be an even brighter future to come. While I leave it to Florian and Srinivas to elaborate on the details of our chiefs milestones, I want to emphasize what makes me most proud. ATAI is aiming to help solve one of the biggest problems in healthcare, mental health disorders. More than 1 billion people globally suffer from depression, addiction, PTSD, anxiety, and other intractable mental health diseases. And that is just the official number. The unofficial one is most likely significant higher, as mental health issues are unfortunately, still a stigmatized topic. We have built a well-funded company in the young psychedelics industry, and have more than $400 million to continue advancing our 11 programs. We have a rich business development pipeline, and they're aiming to add more programs over time. All of our drugs, both the psychedelic ones, and the non-psychedelic ones, has prior evidence in humans, which helps strengthen the indication for the outcome of our trials. Because of our portfolio approach and our extensive pipeline, we expect continuous news flow with 18 R&D catalysts over the next 18 months. Our partnership with Otsuka illustrates big pharma interest in psychedelics, while we strive to keep control of our assets through phase three. And we are as you know, well-funded to achieve that goal. We believe that this is just the first step and more pharma partnerships are possible. In short, I'm very convinced that at highest potential to become the leading mental health company globally, while building value for our shareholders and other stakeholders. Let me now hand it back to our CEO, Florian, who together with our CSO, Srinivas and CFO, Greg will provide additional updates on our business.

Thank you, Christian. Allow me now to provide a few introductory comments. Then Srinivas will review highlights from our drug development pipeline, and Greg will provide the quarterly financial reports followed by the Q&A. People not yet familiar with our company, let me briefly give you an overview of ATAI Life Sciences. We founded ATAI three years ago as a response to the significant unmet need that we witnessed firsthand ourselves with friends and family members suffering from mental health disorders. As you know, we operate our business in a decentralized model and utilize enabling technologies, such as digital therapeutics. This allows us to support and accelerate the development of compounds in our companies. And these are all companies we have either acquired, controlling or significant interest in or incubated de novo. We have a discipline program selection process that is focused on differentiated mental health opportunities and aimed at increasing the clinical probability of success. On an asset level, we are focused on developing compounds with prior evidence in humans. Combined with our unique portfolio approach, which is designed to avoid binary risk, the ATAI pipeline can be both innovative and diversified. Process also incorporates a milestone based approach to capital allocation. We have already demonstrated our ability to capture value this year by partnering with other world class organizations focused on mental health. One example of this is perception of licensing deal with Otsuka an industry leader in innovative mental health therapies. This deal represents the first major partnership between a biopharmaceutical company developing psychedelics, and large pharma. In only three years, we have aggressively built a pipeline of 11 developments, programs, and six enabling technologies. We believe that several of our target indications of a potential market opportunity of at least 1 billion in annual sales each once approved. Outside of our current focus indications we see in significant untapped business opportunities around indication expansion, with an additional estimated market potential of $18 billion by 2026. We intend to invest in these indications for our most promising compounds to optimize our portfolio and maximize shareholder value. Looking forward, it is important to highlight the density of our news flow. We have 18 R&D catalysts over the next 18 months the result of our portfolio approach and our extensive pipeline. The two most imminent upcoming milestones are first compass pathways that is expected to provide top line results on their phase 2B study in Q4 of this year, and second Recognify Life Sciences that has initiated a phase 2 trial and expect to have data by the end of the year. In addition, we plan to initiate perceptions phase two trial for TRD and DemeRx phase 1/2 OUD trial still in this quarter. Additionally, we plan to initiate three phase 2 trials and for phase 1 trials next year. With a very strong cash position, we are well equipped to maintain our leadership and developing treatments for mental health disorders. I will now turn the call over to Srinivas for a more detailed update on the entire pipeline.

Thanks, Florian. As far as highlighted, we have a broad array of exciting assets in are nearing the clinic. On this call, I will focus on the programs with the most near term visibility and highlight upcoming milestones starting with perception neuroscience. So lead compound for perception is PCN 101 a formulation of our academy. Our Academy is glutamatergic modulators are being developed as a rapid acting antidepressant with non-dissociated properties and the potential for at home use. This is in contrast as ketamine marketed as provato [ph], which must be administered only in the clinic. In preclinical models, our ketamine has demonstrated higher potency, greater durability and lower abuse potential compared to as ketamine. The recently published results of an open label seven subject trial in patients with treatment resistant depression or TRD using IVR ketamine supported the hypothesis that our ketamine may be efficacious at sub dissociative doses, in contrast as ketamine. As we've mentioned before, we're excited about these potential aspects of differentiation, particularly from the perspective the scalability and commercial potential for a product delivered at home. In February 2021, perception announced positive phase 1 results demonstrating the safety and tolerability of PCN101 in 58 subjects treated a doses of up to 150 milligrams IV. The compound was well tolerated, and there were no serious adverse effects reported. Additionally, the pharmacokinetics of PCN101 and plasma were found to be approximately does proportional. Notably, the study demonstrated that PCN101 required substantially higher doses to induce perceptual changes compared to as ketamine. Importantly, we anticipate initiating our phase two a trial of PCN101 in Q3 2021. This randomized double blind placebo controlled trial testing an IV formulation of our ketamine will be conducted across 13 sites in Europe and aims to enroll 93 patients diagnosed with TRD. We anticipate the study running through late 2022. In parallel, we intend to conclude of phase 1 bioequivalence study to bridge from the IV formulation to a subcutaneous formulation of PCN101 of that we believe will support at home use. Next Recognify Life Sciences is developing RL-007 an orally available cholinergic, glutamatergic and GABA-B receptor modulator. In aggregate RL-007 complex pharmacology is start to alter the excitatory/inhibitory balance in the brain to produce pro-cognitive effects. We're developing this compound for the treatment of cognitive impairments associated with schizophrenia or CIAS which is a challenging indication with significant unmet need, as though drug therapies are presently approved for this condition. In April 2021, Recognify initiated a 32 patient's face 2A proof of mechanism study for RL-007 after receiving IND clearance from the FDA to commence US clinical development for the treatment of CIAS. The exploratory study is designed to evaluate the effects of RL-007 on safety, tolerability, and quantitative electroencephalogram, or QEG based measures that are viewed as biomarkers for cognition. More specifically, the objective of the trial is to extend the results of a previous study involving a scopolamine challenge in healthy volunteers. In addition to observed improvements in verbal memory, RL-007 administration resulted in a spectral shift on to QEF from a lower frequency theta band to higher frequency alpha and beta band oscillations. Further, we're investigating the effects of RL-007 on several evoked potential measures, including this much negativity and P300, the latter in response to an auditory oddball task. Ultimately, we're looking for a comprehensive data consistent with pro cognitive effects when all cohorts in the face 2A trials are analyzed. Such top line data which are anticipated by the end of the year will allow us to progress confidently into the proof of concept study. The latter it will be a double blind placebo controlled trial focused on more traditional cognitive endpoints, including subsets of the matrix battery. Next GABA therapeutics primary program is GRX-917 an oral formulation of a deuterated version of etifoxine, latter a compound that has a long history of prescription use in France another countries for treating anxiety disorders. Mechanistically etifoxine and GRX-917 have been found to increase the production of neurosteroids, including our pregnenolone, an IV formulation of which was approved in the United States in 2019 for the treatment of postpartum depression. This mechanism of action is thought to underlie etifoxine rapid onset of anxiolytic activity that is similar to that observed with benzodiazepines, but without the sedation, cognitive impairment, or abuse independence risks associated with this class of compounds. Further etifoxine has an extensive safety data database, which we believe will greatly viewers the future development of GRX-917. Like etifoxine, we hypothesized the GRX-917 will provide rapid anxiolytic activity with improved tolerability compared to current treatments for anxiety. And the deuteration is intended to enable less frequent dosing and or lower doses with GRX-917 then etifoxine. In June 2021, we initiated a randomized double blind placebo controlled phase 1 trial in Australia, which will ultimately enroll approximately 76 healthy adults. The study is a single A sending dose multiple, A sending dose design, looking at safety and tolerability, pharmacokinetics as well as pharmacodynamics using qEEG. Based upon the mechanism of action of GRX-917, we're using the qEEG as a target engagement biomarker looking for increased relative spectral power in the beta band. Such changes have been demonstrated with IV pregnemon [ph] and related compounds. And we're also noted in a 2019 phase one trial of etifoxine that we conducted. Top line data for the GRX-917 phase 1 trial are expected early in 2022. Moving to DemeRx IB. We are developing DMX-1002 is an oral formulation of ibogaine, a naturally occurring psychedelic product as a potential disease modifying treatment for opioid use disorder. We anticipate initiating the phase one component of an exploratory phase 1/2a of DMX-1002 in recreational drug users and healthy volunteers in the UK in the third quarter of 2021. To that end, we recently received approval from the UK medicines and healthcare products regulatory agency or MHRA to commence subjects enrollment. The phase 1/2a trial is designed to assess safety, tolerability, pharmacokinetics and efficacy, and the results will inform future studies in patients with opioid use disorder. We expect to obtain safety data from the phase 1 element of this trial in early 2022. We have an extensive early stage pipeline that will be entering the clinic in 2022 and will provide a deeper update on these programs and associated milestones as we approach next year. Further, it should be noted that the digital therapeutics being developed at introspect are currently undergoing user acceptability testing at Academy clinic in San Diego. We anticipate rolling out the introspect technology in our [indiscernible] phase 2 trials starting next year. Finally, a brief mention of COMPASS Pathways: and its compound COMP360, which is a proprietary formulation of synthetic psilocybin, a 5-HT2A-R agonist being developed as an oral, rapid-acting antidepressant is in order. In June 2021 COMPASS announced completion of dosing in the phase 2b clinical trial or COMP360 in a total of 233 patients diagnosed with TRD. This randomized double blind dose ranging study investigating the safety and efficacy of psilocybin is the largest industry funded clinical trial of psilocybin conducted today. Getting to this stage in this trial is a major achievement, and the compass team should be commended for their incredible work. We look forward to the top line data of this trial later this year. I will now turn over the call to Greg for an overview of our financial highlights.

Thank you Srinivas and hello, everyone. As Florian mentioned in June, we completed our upsized IPO of 17.25 million shares, raising gross proceeds of $259 million including the full green shoe exercise. Cash and equivalents total $453.6 million as of June 30, compared to $97.2 million as of December 31 2020. The six months increase of $356.4 million is attributable to the IPO net proceeds of $231.6 million plus $168.6 million from series C and series D common stock issuances. $20 million of licensed revenue proceeds and $4 million proceeds from the sale of investments in conversion of convertible notes, offsetting or cash payments of $32 million for investments in platform companies and $35.8 million in net operating expenses in the first half of 2021. Our operating use of cash for the six months ended June 30 2021 was $14.6 million which includes the positive effect of the $20 million in license revenue proceeds received from perceptions licensing collaboration agreement with Otsuka pharmaceuticals. Operating costs and expenses in the first half of '21 were as follows. Research and development expenses of $16 million and $21.6 million for the three and six months ending June 30 2021, as compared to $2.9 million and $5 million for the same prior year periods. The increase of $13.1 million and $16.6 million respectively were attributable to personnel costs, including stock based compensation expense, and increased CRO expenses related to advancements in our R&D programs. And we also record an acquisition of in process R&D expense of $8 million and $9 million for the three and six months ended June 30 relating to our investments in Neuronasal and InnarisBio. Moving to G&A expenses for the three and six months ended June 30 2021 were $37.3 million and $46.6 as compared to $2.9 million and $4.4 million in the same prior year periods, the increases of $34.4 million and $42.2 million respectively, were attributable to personnel costs, including stock based conference expense, professional fees, and other costs related to support our platform growth and public company requirements. Total stock based compensation expense for the three and six months ended June 30 was $37.5 million and $37.7 million respectively, as compared to $41,000 and $82,000 for the comparable prior year periods. This reflects a recognition of expense related to the achievement of the IPO performance based partial vesting conditions. The year-to-date R&D portion was $9 million and G&A portion was $28.7 million for your modeling.

I'd like to draw your attention to two, onetime items in our first half results. First with COMPASS Pathways. In the second quarter we booked the gain of $16.9 million relating to our investment in COMPASS may follow on equity round. ATAI participated and purchased 140,000 shares for $5 million and we now own 19.4% of campus. And the licensing revenue of $19.9 million recorded from perceptions licensing collaboration agreement with Otsuka pharmaceuticals. I compliment the management team at perception and everyone involved at ATAI on this deal. And also point out that the strategic intent is to drive additional non-dilutive licensing transactions in the future. I'll now hand the call back to Florian.

Thank you, Greg and Srinivas. I would like to thank the entire team ATAI team as well as our supportive investors in their contributions to all we've achieved this year. Looking ahead, we are energized to drive in an important and catalyst reach 2021 in 2022 with additional clinical readouts, trial initiations and business development. This is an incredibly exciting time for ATAI and we will continue to provide updates on our program as they advance. Before we will take questions, I would like to highlight the following five key takeaways on our progress to date and roadmap forward. Number one, with our strong balance sheet and broad portfolio, we have solidified our leadership position as an innovative drug developer within mental health. Number two, by design, our company is structured to maximize the probability of success in drug development through a combination of basically three elements. The unique portfolio approach, the focus on developing compounds with prior evidence in humans, and the milestone based approach to capital allocation. Number three, our differentiated model has been validated by our attraction to date, where we are the only biopharma company developing psychedelic that has entered into a drug development collaboration with large pharma. Number four, ATAI has accelerating momentum with 18 near term catalysts, including phase 2 data readouts by year end from Recognify and COMPASS pathways. Number five, we continue to drive our business development activities by incubating acquiring and investing in complimentary compounds and enabling technologies. With that, we are happy to take questions.

[Operator Instructions] Our first question comes from the line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

Yes, good morning, Florian and team. First of all, thanks for taking the question. And thanks for all the details outlining the 12 and 18. Call it week and month plan. So I had a quick question on RL-007 phase 2a and CIAS [ph]. I guess, I'm wondering if you could provide a little bit more detail on the enrollment criteria regarding call it symptom presentation, as well as concomitant medications and perhaps frame a useful result for informing the next steps out of that study with regard to dosing and duration.

Absolutely, Charles, and thanks for the question. You know, generally speaking, of course, they have to meet the criteria of schizophrenia with a cognitive impairment. That is, I believe, one sigma below normal. And in terms of concomitant meds, I mean, they're allowed to have that we are limiting it to our peprazol [ph] and one other related compound. And that's really about it, just to keep the population as homogeneous, as top as possible. In terms of a meaningful outcome, I mean, as you'll recall, what we're trying to do here is extend the results of the previous Phase 1 study, which is a scopolamine challenge study. And in that trial, they found two things. First, they found improvements in verbal memory. And they also found concomitantly with that, changes on quantitative qEEG, specifically, they found alterations in the spectral profile, pre and post drug and it was really shifting from lower frequencies to higher frequencies. And generally speaking, such higher frequencies are associated with improved cognition. Folks with schizophrenia, particularly those with prominent cognitive impairments, do have some degree of suppression of higher frequencies they tend to run at lower frequencies. So the very first thing that we're looking at is a replication of the quantitative qEEG spectral shift. So that's going to be the first thing and then we'd like to extend from there to some of the evoked potential measures that we're looking at mismatch negativity and P300. I mean, you know, but broadly speaking, a win would be around some of the spectral shift. That's kind of the key here. Obviously, concomitant, improvements and evoked potentials would be great. And, we are doing cognitive assessments as well. Obviously, this is a very small study, we aren't expecting much, but if we find some proportionality of concordance with the qEEG shifts, then that, of course, would be a big one as well.

Okay, thank you one additional pipeline question, then a quick follow up for Greg. Regarding the comp 360 results that could come towards the end of this year, clearly we've spoken to COMPASS management about this, but we'd like to hear your perspective on what you'd like to see out of the trial in terms of call it three week effect sizes and response rates, as well as longer term durability, given that this is the largest controlled trial of silicided to date, and given that it represents a new paradigm relative to the current standard of care.

Okay, Charles, I think you said, Greg, but I'm willing to take that, of course, Greg, if you want to chime in, please do so. With respect to the psilocybin study, I mean, clearly, one of the things that we're looking at is, the key, of course, is their primary endpoint that three weeks that certainly shows a rapidity of onset, as well as some degree of durability. Of course, with the promise, I mean, part of the promise is [indiscernible] in extent of duration of efficacy of driving someone into remission. As such we're certainly going to be watching the data from there on out, right, this trial does go out to 12 weeks so we obviously looking at that. It's powered certainly to for the primary endpoint at three weeks. And obviously, these data will of course, inform subsequent studies. I mean, clearly, responder emission data over the subsequent weeks will be really quite key for understanding and interpreting the results from this trial. Does that answer your question?

Yes, yes, it does. And it was for you. My follow up for Greg was relative to OpEx, over the courses say this six to 12 months, not looking really for guidance, but say just a range. How do you how do you see the income statement over the course of next year?

So thanks, Charles, Greg here. Good question. Because inside the first half numbers, you've got some in process R&D and some a spike in the noncash.com [ph]. But if you strip it out the OpEx in the first half was running about 18% [ph] a quarter. And I think we're going to see personnel costs growing as we continue to support the platform companies and build out the capabilities internally. And as the pipeline moves to more clinical stage, we'll have additional R&D spend likely to grow there to support that activity as well. As a range of you know, it'll be a north of where we are now. Maybe 25% to 30% [ph] range per quarter as we go forward, would be directionally, okay.

Okay, that makes sense. Thank you for taking my questions.

Our next question comes from the line of Ritu Baral with Cowen. Please proceed with your question.

Good morning, guys. Thanks for taking the question. My first questions is on perception and one on one. Can you preview for us the dose that and the dosing paradigm and treatment duration that you're using in the upcoming phase 2 way that you plan to start in Q3? And when we do get the data in 2022, I guess what are the most important scales that we should be looking to for depression efficacy, but as well as the degree of dissociation versus S ketamine, and then I've got a follow up.

No problem. I'll start with that one, then. So in terms of dosing, we haven't really guided on that at this point. What I can say is that, based on the phase 1, we have some latitude on dosing, and we are certainly going with doses that are sub dissociated, based on the phase 1 results. So that's essentially what we're doing there. In terms of endpoints, obviously, the mad rush [ph] is going to be kind of key here. You also talked about those in frequency. So this trial is a single dose of it's a single IV administration of a compound and clearly the results of that what we're following there. So you know, the depressive symptomatology as a 14 days of primaries at 24 hours consistent with other ketamine studies. The results of this trial will give us some indication of the dosing frequency or the re dosing frequency which we do anticipate will be required here. Not unlike S ketamine or ketamine proper. There's preclinical data suggesting greater durability of effect. So that's really what's driving this hypothesis that we might be able to dose less frequently than S ketamine which, of course, is twice a week for four weeks. So you know, so that's kind of the long and short of it in terms of the dosing in terms of endpoints [ph]. obviously, is a key endpoint here. In terms of dissociative/psychedelic effects, there's really two things that we're focused on. Obviously, CADS [ph] is something that's widely used in the industry. And we certainly are including that, I'd say the CADS [ph] is perhaps not the best suited for this. We're also doing the five DSC here. And that will give us a lot more granularity on the sort of psychedelic type effects that one may that we're seeing what the compound.

Got it. And then my next question is on the DemeRx Phase 1/2 study that you're planning or starting in Q3. So, you mentioned the safety in PK [ph], are you doing any special cardiovascular monitoring around the IV study? And again, since this is recreational drug users, what sort of efficacy data could you glean out of it and when?

Yes, so in terms of cardiovascular safety, of course, there is a signal depending on the publication for Q2 prolongation in this population, I mean, I think there are some compounds with existing data. There were certainly multiple dosing experiments that had been done. The concentration of Ibogaine wasn't necessarily clear. So that's something that we're looking at very closely. We are doing repeated ECG endpoints as well and sort of standard fashion here. We would like to see, of course, if there's a dose range that we can get to that is relatively devoid of Q2 prolongation. So that's really the focus here. In terms of efficacy and the phase one element, I mean basically, the focus on the efficacy endpoints are really in the phase 2 piece which is those individuals that are undergoing medically assisted detox. So, you know, looking at their withdrawal, and then looking at long term remission, if you will, is really what we're focusing on there, rather than within the phase 1 component of the trial.

Got it. Thanks for taking the questions.

Our next question comes from the line of Brian Abrahams with RBC Capital Markets. Please proceed with your question.

Hey, guys, thank you so much for taking my questions and congrats on all the progress. Maybe just starting with PCN-101. I was wondering if you could talk about the status of the subcutaneous formulation. You mentioned that would be moving into a bridging study in your opening comments. Just wondering, I guess where that stands? What if any gating factors, there are two starting that study and what your target volume would be for that administration?

I think a lot of that the details here are not public. I mean the long and short of it is that the formulation is under development. And of course, you know there's the formulation itself and then compatibility with the device to subcutaneous injector. So all that work is ongoing, the BE [ph] study, as you're familiar, is relatively straightforward, and very quick, right? I mean, it's basically comparative IV versus subcutaneous. And as we mentioned in the opening remarks, we are looking to get the data from that contemporaneously, roughly with the phase 2 results. So that's ongoing currently. In terms of volume, the standard volume here is for subcutaneous is keeping it under two milliliters. And obviously, we'd like to keep it significantly under two milliliters. And that's obviously what we're pursuing with our formulation.

Great, thanks. And then you also have recently announced Vivexia [ph] launch to develop [indiscernible]. And just a couple of questions there. I guess, first off, I'm curious on the digital therapeutic element there, which you talked about a little bit in your opening remarks and your vision for integrating that to help assist with dosing therapy and monitoring how that might provide an administration advantage. And then, secondarily, you also pointed out that there's you don't interact with 5-HT2A which could potentially enable, I guess, additivity, to SSRI. So I'm curious if you could also speak to how you envision the future program in terms of combination potential, both with SSRIs as well as with other TRD programs in your pipeline? Thanks.

Yes, I think that that's with Salvinorin that's really the key point. I mean, clearly, the compound is psychedelic. It has many properties in terms of the psychedelic experience that overlap with classical psychedelics, as well as with some aspects of ketamine as well. So very interesting compounds certainly some in this case, more anecdotal data around antidepressant efficacy, very curious form of pharmacology, overall, it's a Kappa agonist. Many such Kappa agonists while they tend to be a little more on the partial agonist side like pentazosine [ph] and things that are related to that, but they tend to be more dysphoric. So this is really quite an interesting compound. And because of its opioid receptor, pharmacology there's certainly the potential exists to be used concurrently with SSRIs, SNRIs, et cetera. So that's what really and that's what really kind of the value out here, something that we're obviously very keen to pursue. More broadly as we've discussed, clearly depression is multifactorial and different patient populations may have different underlying pathophysiology driving that including, certainly in substance aspects of opioid dysfunction. So perhaps this is better suited to that population. So that's, that's certainly why we're interested in this compound and pursuing it. In terms of digital therapeutics, I mean, obviously, this is a somewhat broader point. You know, we've mentioned several times that the readouts frequency is not necessarily clear from the outset and it's going to vary undoubtedly by patient. So, regardless of the compound there'll be subsets that don't respond. There'll be a subset that has a very long term remission. And we envisioned the digital therapeutics not only to support the patient, both pre and post psychedelic in terms of pre psychedelic, of course, pre psychedelic administration, you know, expectation setting and the preparatory work and then post, providing a psychosocial therapy not unlike a reset or from care but also tracking symptoms. And, you know, giving the physician the treating physician input as to when the patient should be re dose. And again, this is more broad. This is certainly something that we're looking at with radio with the CMT program as well as Vivexia with it's Southern RNA [ph] program as well as others. Does that answer your question?

Yes, that's really helpful. Thanks Srinivas.

Our next question comes from the line of Judah Frommer with Credit Suisse. Please proceed with your question.

Yes, hi, thanks for taking the question, maybe want a little bit more high level on this space as it kind of continues to evolve. And I think that there probably are a couple narratives developing here where I think some companies in this space are assuming that we'll need a bit of a change in treatment landscape and maybe a real estate or kind of treatment location. Change in terms of how patients are dosed with psychedelics. It does seem like your team is looking more to leverage the existing infrastructure in the mental health industry. Can you talk about thought about doing that as you move compounds through the clinic? And if there is any need to effectively kind of reinvent the treatment landscape here?

Yes, I'll let Florian take a heart of that.

Yes. Thanks. Happy to our thinking around that. So we are certainly R&D focused. And that's our DNA. And that's what we're doing right now. It's really focused on executing the trials. And in terms of how we think you were correctly summarized, and we intend to leverage the existing infrastructure that existed pre J&J is approvals from auto and that sponsor or J&J is currently also building out to administer the inpatients provide the treatments. So we intend to come to leverage the existing infrastructure and certainly kind of observe and be closely involved in kind of this ecosystem by like primarily focus on the development and execution of all drug development pipelines, and I think they're tuning in to allude to how our therapies fit in what way in terms of treatment duration in a second. But here key for us is to optimize. In general the time of the therapist, especially also through the digital therapeutics that Srini already pointed out, as well as optimizing the duration of the site, or the duration of the treatment, in its entirety. So here really slotting things into an existing infrastructure to really optimize for scale and to reach as many patients as possible in a thoughtful way. And Srini, Maybe you have some things to add, especially on kind of -- how did it slide into an existing infrastructure.

Yes. I mean, I think you hit upon the main points, right. So the real question is scalability. And it's been mentioned a number of times that by other players that there are limits to the number of therapists, et cetera, that one can train, particularly for those compounds require et cetera. So the entire approach with both the salvinorin a program, the DMT program is to create an overall profile of psychedelic effect that mimics in some way S ketamine. So really having something that you know, has a psychedelic effect that lasts less than an hour, we're really targeting sort of the 30 to 45 minute range, allows us to potentially leverage the S ketamine infrastructure, and I believe they have J&J has over 3000 clinics at this point. With such a short duration of action, our hypothesis and it is that is that we don't require the heavy lift of a traditional sitter in this context. Of course, we'll find out relatively soon enough. But certainly there's no real sitter, if you will, in the context of S ketamine. So we do believe that there is utility and supporting the patient as I mentioned both pre and post the psychedelic effects and of course that requires therapy as well. If you have access to therapist Godspeed go for it. And but certainly the digital therapeutic is going to provide a baseline level of therapy and a standardized therapy, which I think will be quite beneficial. What we didn't get into is our work with cyber, which is actually hardware, and that hardware will provide aspects, if you will, the digital guides. So, you know, the idea here is really to get the patient into the appropriate mindset. I mean, these folks are very suggestible during the psychedelic effect, and you can kind of drive where things go with the appropriate discussion, you know, the way their minds that you know, where their minds read prior to the psychedelic effect. So relaxing the patient may be beneficial. So that's where the cyber-hardware is going to play an important role. Ultimately, again, hypothesis is that you can improve safety and potentially efficacy with digital therapeutics. So of course, this is going to with hardware based digital therapeutics, feedback based digital therapeutics, but this is something that will be an active area of research for us.

That's helpful, thanks. And then a quick follow up on something I think we heard Greg say, tied to the Otsuka collaboration in terms of kind of pursuing additional non-dilutive financings as a strategies is that kind of a general comment is it tied specifically to PCN-101? Is it more tied to psychedelics and Big Pharma? Kind of validating their approach there just maybe a little bit more color on that comment?

Sure, I think the exuberant partnership indicates, I guess, validation from our perspective of our ability to capture value. So we have been executing for a while, but in March demonstrated also that we capture the value that we that we generated. It's one potential avenue and something that we want to build on it, as Greg mentioned, and this he also pointed out, so here, we intend, as part of our strategy to continue the dialogue and potentially also enter into more agreements with strong strategic partners. That's kind of one avenue, of course, we generally optimized for success, meaning that we get all our compounds to approval, especially given the broad set of enabling technologies that we have that are especially relevant for the psychedelic assisted therapies, as Srini just alluded to, here, we think we have a competitive advantage and will nevertheless be very open and entrepreneurial when it comes to the potential interest from other very strong strategic players. So we'll always develop it on a case by case basis to ensure we optimize your for shareholder value. Great, thank you.

Our next question comes from the line of Esther Hong with Berenberg. Please proceed with your question.

Hi, good morning, and congratulations on all the progress. So first question, I wanted to ask about PCN-101 or ketamine for TRD? Regarding dissociative effects, or lack of. Is there any difference in patients who have been who may be more susceptible to potential dissociative effects? Or is it pretty clear that it depends on dose strengthen in this case, very high doses? And then I've got a follow up. Thanks.

Yes, that's a really interesting question. I mean, I think the short answer is we don't really know in terms of patient subsets. Obviously, it's something that we're looking into, we have a couple of different avenues to be looking into that including some of the digital aspects as well as some of the more metabolomic aspects. So if that's something that is of great interest, right now, we're focused on dose, to be honest with you.

Okay, got it. And then wanted to ask about GRX-917 deuterated etifoxine for generalized anxiety disorder. Can you speak more about the non deuterated etifoxine use in France, and specifically, the safety profile where is it used in the treatment paradigm any additional details from its history of using in France? Thanks.

Yes, absolutely. So this is obviously a really old approval. So this was approved in 1979, in France, and there were some sort of reciprocal approvals and other small territories, but nothing in any of the major territories. And when it came out, it was viewed as a benzolite [ph] but it was pretty obvious that his profile was quite different. At that time and then in the late 70s, early 80s, this was kind of the heyday of benzodiazepines and people attributed the sort of drunk and feeling if you will, up a benzodiazepine with efficacy. So there was a bias against the compound right off the bat. And, you know, it is something that has sold significant amount that's used in particularly vulnerable patient populations, the elderly, et cetera, where there's certainly been a lot of use. And there was a publication a couple years ago that spoke to the safety. This was from the safety database in France, I think was about 13 million exposures, and looking at overall safety and compounds very well tolerated. Very limited effects in terms of reported adverse effects, certainly, compared to other compounds. I mean, compared to benzo [ph] was quite clean even compared to SSRIs, the profile was very favorable. Specifically, no data suggesting that there's any kind of addictive properties or dependence issues with this compound.

Got it. Thanks.

Our next question comes from the line of Nathan Weinstein with Aegis Capital. Please proceed with your question.

Good morning, everyone and thanks so much for taking my question. Just a quick one on the pipeline for KUR-101, when you consider a broader indication set beyond OUD [ph], just given the range of traditional uses that the compound has had?

Yes, that's a good question. So you know, I tend to view opioid use disorder as kind of a spectrum. And you know, in many situations, particularly with iatrogenic [ph] opioid use disorder, it starts with the treatment of acute pain. And it's interesting, there was a study that was done a large cross sectional study that suggested that 6% is patients that received a prescription for an acute opioid in other words, short duration opioid, if they took it, we're still taking an opioid a year later. So that's really kind of terrifying. And obviously, things have kind of clamped down significantly over the course of subsequent years. But regardless, there is a need for a compound that has a better tolerability profile than a traditional opioids. So, that is something that we're looking at, again, there's a spectrum from treatment of pain, both acutely and chronically all the way to opioid use disorder. And that's something that we're going to be investigating with this compound. And to your point, this is basically where cradam [ph] is currently used, right? So, if you look at the boards, as it were, like the Reddit and other places, as well as some of the publications, it really is used as a treatment for pain, particularly those individuals that require more analgesia than non-scheduled compounds but can't tolerate an opioid and it's also used to mitigate withdrawal symptoms. So that spectrum is what we're focusing on as we develop this compound.

Great, thanks. And just one follow up obviously, one of the beautiful things about a ties the multitude of different programs and the different API's so just curious whether the procurement of drugs substance for any of the programs had been a logistical challenge or if you foresee it being so in the future?

I mean, there have been no specific logistical challenge. I mean, certainly a lot of synthetic, there are three that are semi synthetic or purified extracts and that you know that's Ibogaine and deuterated methrozenine [ph]. We have good supply agreements for those products. So it hasn't really been an issue and we don't anticipate it being an issue. We are -- in general, we'd like to minimize the amount of stuff that's coming from plants for a range of reasons, you know, including environmental impacts. So we are looking at alternative routes to producing the drug substance, but something that will be that that's for a future discussion.

Great. Thanks so much.

There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

Great, thank you, everyone, for dialing in today and for all the questions that you have for us. Thanks also for everyone, and the entire team and all our investors that brought us here where we are today. And where we're looking forward to the future, what is yet to come. Very exciting times and with that I would like to thank you all, and we share the very successful week. Thank you.