Another exciting advisor here is Alfa Nuner. We've got a fantastic show for you today with a conversation focused on the developing world of psychedelic biotech. We're very excited to welcome back Christian Angermayer, the founder of Atai, a NASDAQ listed biotech building a strong pipeline of psychedelic therapies. He always has some great insight on the space and of course how Atai is navigating it all. So we're going to cover a lot today, including the recent support and movement we've seen from a federal level. So if you're out there and you have any questions, good reminder, get them in early. We're going to try to roughly, you know, hit about a 30-minute mark. So, just so you know, in terms of timing. But with all that said, Christian, thanks for joining and making the time. Really appreciate it.
Thanks for having me again. It's always a great pleasure.
Always enjoy the conversation. Always feel like I walk away with learning something new. So, appreciate you making the time. Well, let's get right into it. So, I feel like starting with the executive order and the push for FDA fast-tracking. I know you've been covering it a lot on your Substack in terms of this being, you know, a profound shift in terms of how America is treating mental health. You know, what can you kind of tell us at a high level in terms of the shift and you know how psychedelic medicine is really becoming now more politically and culturally viable.
So let's start with the letter because like look I was very happy because it did what I said on my substack and other channels. It actually brought psychedelics in an even broader sort of cultural zeitgeist awareness. I also want to say and so I hope kind of this was the first and the last kind of political action because if you remember we had this discussion before, psychedelics should not be political. So I'm looking at it like with a because it was a very positive statement of the president with a very sort of happy side of my heart and then a little bit I'm like ah because we wouldn't need it. That is to by the way I want to tell everybody and like I guess people who tune in here they know it but like psychedelics are amazing and the great thing is they are scientifically amazing. So and in all the clinical FDA studies we and other companies have proven that they have great upside in treating mental health, very little downside. And that is a fact. That is not a political decision. And unfortunately I'm saying that as a German who loves America, spending a lot of time here but America is very very divided and psychedelics should not sort of get into that political world because no need. It's something which I think everybody will profit who needs it on both sides of the aisle. And so short version is like while I love the attention I think here it should stop because it's not needed. And I also want to make a big shout out to the FDA, by the way, the current one, the one on the Biden and the one on the Trump one. They were always very supportive. So again, it feels like if they needed a nudge and they didn't because they were doing their job and everything was and is going really well. Again, you always take the extra attention, but like it's not a political decision. It shouldn't be a political topic.
I think that's a good point and a very unifying point and kind of a refreshing perspective. We've seen that too in the world of cannabis even. And I feel like that's become a very politically divided thing where again people just want access and better medicine and all those things. So I think that's important. In terms of the executive order, I know this one was focused more in a specific psychedelic substance with Ibogaine. Would love to hear in terms of you know the impact for the broader space. You know what are the actual impacts that we're seeing? How far does the actual reach go?
Yeah. So that is actually another good point you're making because like so I was referring very much to the generalized again very positive statements about psychedelics in general. The one substantiated really aspect the presidential order had that it was kind of positively calling out Ibogaine. I actually don't know how many people know like Atai is one of the very few companies who has Ibogaine in its portfolio but I also want to say that Ibogaine is from a chemical class a completely standalone psychedelic. Yes, we put it into that box psychedelics because you have a psychedelic experience but it's a very very different not even related completely different compound than the sort of traditional psychedelics and Ibogaine does have a risk. We have done early clinical trials with Ibogaine. We see clearly the upside what people are mentioning is for heavy especially heavy opioid disorders and in general addiction. But Ibogaine does have a risk. So what is the upside of the presidential order is that so far the signaling we had gotten and it was only correct for Ibogaine of the agencies was very cautious. So we had made to date the decision pre-presidential order that from a risk-reward perspective as a for-profit company it doesn't make sense for us to push Ibogaine forward. We have it. We have extremely solid IP around it, but we didn't push it because well, look, there is the paved easy way for 5-MeO-DMT, for DMT. Then I'm super super excited. We should touch on that is EMP-01 like a sort of patented version of MDMA and we have some early stage. So Ibogaine we had kind of shelf such a negative word, but we put it on a slow burner because it was sort of signaled, oh, this is not fully supported. That changed now. So I'm very excited about that. Where I'm a little bit worried like always in our world is like on social media now you have like influencers shilling Ibogaine that is bizarre and I want to tell everybody who's listening even some people might not like to hear it again Ibogaine is not a classical psychedelic, has psychedelic like properties or experiences it does have a risk we see a cardiovascular risk can that risk be mitigated if you do it because it's by the way it's a 48 hour 24 to 48 hour trip anyway can that risk be mitigated if you do it once approved in a clinic with a cardiologist next to you. We believe it can. Can that risk be mitigated if you go to Gabon or to do it? No. So people when I say clearly are dying on Ibogaine.
So it's to be tempered with and that is the downside of sort of that hype that sort of the profile is not discussed and again it's different if you take a medical drug under medical supervision or if you take it out in the wild. But it's also different because people here including from me oh psilocybin whatever they do have really very very benign side effect profile. So yes like we're doing psychedelics for the traditional ones for medical use but like I can see it if somebody does it recreationally. Please don't do that with Ibogaine scientifically not good.
Yeah I think it's obviously good to keep in mind the risks of any psychedelic of any medicine of anything. You know, importantly, I am curious if you have a view. We've talked about it on the show before following the executive order. If Ibogaine was sort of one of the things that got focused on because while it does kind of live in the psychedelic family a little bit, although it's different from things like psilocybin and DMT like you're mentioning, that might have, you know, fewer side effects, I feel like it doesn't carry a lot of the cultural baggage, I think, of some of the old psychedelics. I know you were on CNBC relatively recently following the executive order and I think there was some push back on kind of those old tropes around psychedelics that it can make you crazy.
But I was like yes I was really poking back though because they're very lovely but a little bit older guy he pulled out an it was an anecdote about a friend 40 years ago and then in the break which was not on live TV he admitted that as far as he can remember after 40 years that they did several recreational drugs at the same time that's another like again we shouldn't go too much into trip advice but like guys like what we doing is again medical clinical trials in a clinical and supervised environment if people do it in the wild and then they mix who by the way we really don't know if people mix ABC I don't want to mention even works you mentioned yeah oh my god like and then people still but it showed me by the way that there is still all of these sort of weird urban legends we still need to fight. So, but like yeah.
I think that's true. There is some old-fashioned thinking kind of still around there. But I think you handled that really well in terms of providing that education because you're right. I mean, even like if you're drinking on standard you know anti-anxiety or depression medication, that's always a bad thing. Even just alcohol, I think can even have you know really adverse effects. So, but you're right. This is Yeah. So, Ibogaine doesn't have that baggage. Yeah. But again, I just want to say I really think Ibogaine is an amazing drug, but like there are other amazing drugs potent with great potential, but like they're not amazing if you don't do it with a doctor. Like it's like you would never think about chemotherapy and say, Oh my god, I'm doing chemotherapy. So it's all about doing it the right way in the clinic way. But for Ibogaine, it's especially important.
Because there is a cardiovascular risk which I think we can manage. And by the way, and additionally, I want to say like like for everything in life, it's always a trade-off. If you are I can tell you if you are for I take alcohol addiction I'm very confident I think this is like at the moment as you know we focus with our lead drug PPL-003 on TRD but we want to expand the portfolio of indications I think PPL-003, 5-MeO-DMT will kill it in addiction in general. So my advice right now would be like or my expectation for the future is if you have alcohol addiction or smoking addiction or even cocaine and stuff like that I think it's my hopefully prove it you can definitely do that with PPL-003. Ibogaine really has this niche but very strong use case for opioid addiction opioid people who have severe opioid addiction I think the death rate over time I read I want to say the wrong number now but it was something like 40% I think of people who are severely opioid addicted were already hospitalized die 40%. So if you have that as and then you have an alternative okay you do an Ibogaine trip which has some medical risk but you can mitigate the medical risk with a cardiologist amazing doing Ibogaine what I hear on Instagram because for self-improvement please no.
Yes okay I think that is a good health risk. I do want to turn it to Atai to speak a little bit more depth but you kind of touched on a little bit I'd love to kind of get a sense of you know is psychedelic medicine at all benefiting from kind of that broader cultural movement we've seen around I think wellness like biohacking longevity mental optimization. What can you kind of tell us about that? I think it is.
So, where do we start? Meaning maybe I go one step back and mention one thing which I want to say how it's related. I think there's at the moment a very vital debate and we're kind of in the middle of it positively because I started another company which we just taken public called Enhanced Games. It's a on the one side it's a sport event where we allow performance-enhancing drugs medical ones. Again, for me, it's always about whatever the FDA has approved, we know really a lot about it and that's sort of for me the gold standard of science. So, we allow medical FDA approved substances for our athletes. But then we're also building up a telehealth business where everyday person can get enhanced whatever that means for you if you want to have if you want to lose weight, gain muscles, whatever. So and in that whole world of enhancements is the topic peptides which is actually a very broad category and sort of on the one side you have the people who are like oh my god this is amazing practical peptides that occur for everything and then on the other side you have people no no meaning we don't know anything about these peptides by the way as often in life the truth is in the middle there are some peptides who are actually FDA approved and we know a lot about them and that's actually the peptides both we're allowing for our athletes in the games and that's the peptides we are offering consumers in our telehealth business. But what I'm making out of this whole peptide craziness or hype that's what I want to come to is that we are in a time in the zeitgeist where consumers want medications to improve themselves. And I'm very satisfied that this is happening because this is what I'm talking about literally since 28 years. Just turned 48 a week ago. Since I started my first biotech company when I was 20, I never understood why the biotech industry is only focusing on illnesses. Obviously, that's the most important thing biotech should do. We should try to eliminate cancer, cardiovascular diseases, Alzheimer's, everything. But I always as a consumer myself, but as being in the business, I was looking at biotech and I was talking to my colleagues and scientists. was like, hey, isn't there potential medication or existing medication which helps me right now to achieve my goals, whatever that is, losing weight, gaining muscles by the way, but maybe be a little bit smarter, working harder and all of that. And I was seen always as the odd one out. The good thing is like because my first company was very successful and then many others like so nobody was allowed or could say, Okay, Christian, he's crazy. And like he doesn't know what he's talking about. But they were really like okay Christian but you are a little bit crazy because biotech only should be for illnesses and I was like why like this doesn't make any sense when at least we should talk about prevention. Yeah I said that with psychedelics also like with anything anything is better prevented than cured because once you have it it's much harder to reverse it then yeah but also again take even mental health is a perfect example. It's such a subjective field. Yes, we all know there's the MADRS scale and I could make an interview with you and if you score very badly then you call depressive. And if you have failed some tries. So there's definitions for everything. But like if you score just some points sort of less you're maybe not deemed depressive but you're not well either. So and why again should so and all of that I was pushing for 28 years and will sometimes laugh at and then it started actually the economic success for GLP-1s because suddenly we have a class of drugs which yes were made for a disease diabetes then they were approved for clinically obese people but like the vast majority of people taking GLP-1s now are consumers who take it because they just want to be a little bit slimmer but I'm taking it I'm any obese hopefully but like I'm taking it because it's outsourced discipline I don't need to worry about whatever overeating because you don't so and fun fact all the GLP-1s and it's only like two big companies at the moment the two big companies with the GLP-1s on the market make more revenues than all AI companies combined which shows the power of the consumer wanting that so coming back to peptides I think what this hype around peptide tells me is that the consumers are angry and they are screaming that they want more of these things and they're actually angry on the pharma and biotech industry that we're not providing that. So what do people do when they're like ah okay pharma is not helping me but then they go wild and they're like oh like let me order an experimental peptide from China this is not the right thing but like we have to be self-critical as a biotech industry we can laugh at these people and say oh like they yeah there is some people going too far but I'm like self-criticism is like but we have I think the duty and by the way also the financial opportunity to in a medical science scientific way actually deliver what clearly the consumer is literally screaming for. So and if coming sorry for the long intro but coming now to psychedelics it was always my point that I think the market potential for psychedelic therapies is grossly underestimated take Atai. So analysts mostly value us for the lead indications we're doing for our three lead drugs PPL-003, VLS-001 and EMP-01 and let's take PPL-003 and the lead indication is TRD which is a very small subset of depression. What does it mean? It means you have been you have tried a depressive person has tried two or three other treatments failed didn't work then you could treatment resistant. So and we have shown amazing results for that very simplified high efficacy very very benign side effect profile. So, but to every therapist I'm talking is like once you are or sorry every clinician once PPL is available why would I give my patient one two or three other drugs which are very bad which have very bad side effects whatever and only at the end if I tried the bad stuff so to say obviously the bad stuff often doesn't work why would and then I go come to you it's working like no I might start with it so I'm very very confident that very quickly psychedelics will not be a last-in-line treatment but a first in line treatment but then beyond coming to the consumer aspect there will be there's obviously we need to distinguish between what the insurers will pay and what there's private pay but there is I think a huge market of people who will go through challenging times and then will gradually understand why wait if I go through a divorce or a bad time job or you lose somebody you of why wait till I might get a mental health issue why not doing it preventively and if you go that I think the market and really hard revenue potential of psychedelic medicines is like literally I'm not talking about 2x I'm talking about 10x talking about 20 30 like multiple x's higher than everybody's modeling right now and that's why I believe so much in psychedelics in general financially many ways but also in the opportunity but especially in the high why now comes The second point I really want to make like we need to start and I'm obviously talking I'm very biased because like but we took deliberate decisions like literally six seven years ago which now come into fruition. We need to look what is commercially also feasible. And all of that what I just said only works in that sort of dimension and size if it's really commercially feasible. What is commercially feasible mean? It needs to fit in the clinic landscape in everything. And that leads you to short acting psychedelics because like it will be very hard from my point of view to do a 12-hour trip and even six-hour trips are challenging. While what we are doing with our two lead drugs VLS-001 and PPL-003 is like it's a two-hour session which fits perfectly what clinicians and patients are already used to from Spravato. So it's a proven kind of infrastructure and we fully going into it.
Yeah, I think there's a lot there that you covered in general, but I definitely agree with you in your earlier point in terms of you know, people have wanted this for a long time. The tech hasn't really been there. It is now there, but it's now sort of the actually distribution and getting it to people. I do think the environment where we are seeing an administration that is willing to sort of help cut some of that red tape to actually get these reviewed, approved is a great spot to be in from your position. So, I think great to see. And yeah, I definitely agree on the short acting, I guess, model is seems like a great, you know, slot in there ultimately. I'm seeing some great questions come in, so let me try to get going.
Are you monitoring them? I don't see them, but like,
I will pop them up so you can see them. Don't worry. So, this is a question asking, has getting breakthrough therapy designation reduced time frame timelines for potential approval for PPL-003? If so, what are the time frames that we're looking at?
It saves time. It's not years, but also it's going to be quick anyway. It's going to be from now on like two to three years max.
Okay. All right. That's a good answer. Let's see. I'm seeing another question from Larry David, which is I wish this were the Curb Larry David, but what's your plan for the remaining Compass stake, whole exit or strategic hold? Because you also were early in Compass.
Yes. No, look, and I love Compass. We were practically the co-founders, seed investors. We helped setting it up. I still believe but I have to say like psilocybin is an amazing drug. By the way so is LSD. I want to always make clear sort of if I sort of believe that Atai is really I really believe it like the one and only company but I'm not saying that because I started whatever like because I also helped starting Compass because I put really a lot of thoughts into it and also I have to say my own thoughts and understanding have evolved and grown by learning by learning from clinical trials but by also by learning from talking to physicians whatever and our view is really for the commercial model. It is the shorter the better. That's why VLS-001 and DMT by not just the shorter the better. Even the how you give it matters. And as people might know PPL-003 is intranasal and VLS-001 is buccal on your inner side of your cheek. It goes very quick and very clean. So I give you an example of psilocybin which is an oral pill. If you're on GLP-1s, then your entire digestion is slower. So it can take almost an hour longer for anything. It's not just psychedelics. If you take them orally to onset, huge problem. Another hour you're sitting around, you need to be monitored. Costs for the healthcare system and so ever. So I think so it's duration plus actually convenience and quality in delivery. I also always say like inhalation is a no-go. I would never inhale personally and I don't want to bring anything to market I wouldn't do personally. I would never inhale 5-MeO-DMT. And I would see anybody who develops 5-MeO-DMT going with me on stage. I would do it intranasal but not inhaling it because I have too many really bad real life examples how inhalation is just too quick too scary and can actually also do harm. But anyway so it's time plus delivery. And that's why consciously we decided to reduce our Compass stake over time because like again will psilocybin be approved I'm very very sure about that. Is it a great drug? Yes it is. Is the commercial opportunity from my point of view comparable to what Atai is doing? Not at all. And that's why we reduced it. We're below 5% now. And so that means we're below the reporting threshold. So, it's practically fully reduced.
