Atai Life Sciences (NASDAQ: ATAI) recently announced the dosing of the first subject in Perception Neuroscience's Phase I transition study from intravenous to subcutaneous administration of PCN-101 (R-ketamine).
This Phase I study will assess the safety and effects of different doses of PCN-101 given under the skin compared to the same drug given intravenously. The study, set to finish by mid-2023, will involve about 16 healthy participants in four groups.
In January 2023, Atai shared the outcomes of a Phase IIa proof-of-concept study testing PCN-101 for treatment-resistant depression. Although the results for the primary endpoint did not reach statistical significance, PCN-101 demonstrated an encouraging safety profile and signals of efficacy across all timepoints up to two weeks, potentially offering lasting effects.
This study of the transition from intravenous to subcutaneous administration may provide insight into dosing regimens for the new subcutaneous formulation that could optimize the therapeutic index—the balance between safety, tolerability, and efficacy of PCN-101—in future studies, further exploring R-ketamine's potential as a fast-acting antidepressant for home use.
PCN-101 is a form of ketamine with the potential to quickly treat depression and suicidal thoughts. It works by blocking NMDA receptors and may have lasting effects with better safety and tolerability based on rodent studies.
Atai continues to work with Perception Neuroscience to explore strategic partnership options.
About Perception Neuroscience, Inc.
Perception Neuroscience, a New York-based biopharmaceutical firm, focuses on creating therapies for neuropsychiatric conditions. As a majority-owned subsidiary of Atai Life Sciences AG, its goal is to develop significantly improved treatments for severe psychiatric disorders.
About Atai Life Sciences
Atai Life Sciences, founded in 2018, is a clinical-stage biopharmaceutical company focused on revolutionizing mental health treatments. Dedicated to acquiring and developing innovative therapies for depression, anxiety, addiction, and other mental disorders, Atai aims to responsibly speed up drug development across its companies to create lasting improvements in patients' lives. Its ultimate vision is to help everyone, everywhere, overcome mental health disorders and lead more fulfilling lives.
Atai Stock Overview
The company's stock is trading at $2.19 as of 21 Apr 2023 and is down by 17% year-to-date (YTD). On an annual basis, the stock is down by 55% whilst the S&P 500 is down by 6%, which means the stock has performed worse than the broader market by approximately 49% over this period.
What do the underlying trends at ATAI Life Sciences NV tell us about its potential as a long-term investment? Let’s take a closer look and see what the numbers tell us.
ATAI Stock Fundamental Analysis
First of all, let's look at ATAI Life Sciences' EPS, which indicates how profitable the company is on a 'per share' basis. This metric is calculated as net income (after dividends on preferred stock) divided by the number of outstanding shares.
ATAI Life Sciences NV's EPS is negative based on figures from its most recent financial statements.
Next, let's look at the P/S ratio, which looks at a company's stock price compared to its sales (revenues). It is calculated as the current price divided by sales for the previous 12 months and is useful because it helps us understand how much investors are willing to pay for every dollar of a company's revenues. The consensus opinion is that stocks with a lower P/S ratio offer better value, and stocks with a very low P/S ratio are known as 'value stocks'. However, what is considered a 'high' or 'low' P/S Ratio is relative and can vary across different sectors, so the best way to objectively assess this is to compare a company against its industry peers.
ATAI Life Sciences NV's P/S ratio is currently 1463.6. With a P/S ratio of 1463.6, the company is overpriced compared to similar companies within the same sector. For context, the sector-wide average is 4.8.
We also like to look at a company's price-to-book-value (P/BV), which tells us how much investors are willing to pay for a company's assets. It is calculated by the company's stock price divided by its net assets (or 'book value', meaning the value of all assets which appear 'in its book'). P/BV is used by value investors to identify potential investments and a P/BV of 1 is usually considered a solid investment.
According to its last reported filings, ATAI Life Sciences NV's P/BV is 1.4, which is below the industry benchmark of 5.65.
Finally, it's always worth looking at a company's debt profile before deciding to invest in order to assess the risk. A high amount of debt can be a problem if a company is not generating enough cash flow to service its debt, and some sectors rely on debt more heavily than others.
ATAI Life Sciences NV has total debt of $15.12m as of 21 Apr 2023.
Furthermore, free cash flow is negative, and the company is not profitable.
The Verdict on ATAI Stock
When we looked at the trends with ATAI Life Sciences NV’s stock, we didn’t gain much confidence.
Specifically, the stock is down by 17% YTD and down by 55% over the past year. Moreover, compared to companies in the same sector, ATAI has a very high P/S ratio.
As with any stock, there are additional factors to consider before making an investment decision. This analysis is general in nature and based on historical data, and it does not take into account your specific investment objectives or financial circumstances. Additionally, this article does not look at the macro environment where geopolitical headwinds, internal company changes and individual technicalities in the way a company conducts its business can have a significant impact on a company's long-term outlook. Please do your own due diligence before deciding to invest.
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