Psychedelic Drug Firm’s Billionaire Backer Will Hold Onto Stake
(Bloomberg) -- German entrepreneur Christian Angermayer says he will hold onto his stake in Atai Life Sciences NV for another two years despite a dismal six months as a publicly traded company that saw the stock unwind roughly half of its value.
A lockup on the company’s shares expires on Wednesday, meaning Atai insiders like Angermayer, Mike Novogratz’s Galaxy Investments and Michael Auerbach of Subversive Capital LLC will get their first chance to sell.
But Atai said over 30% of its early investors, including Angermayer, are standing behind the battered biotech that is trying to spin recreational drugs into money-making therapies for hard-to-treat depression and post-traumatic stress disorders. Despite the backing Atai plunged in its worst day of trading ever on Wednesday.
Atai tumbled 32% to $6.82 per share, extending Tuesday’s slide into a second day. The stock is down about 55% from its June initial public offering price of $15.
“It is imperative for me to be in this journey for the long run,” Angermayer said in an interview. He is the company’s biggest shareholder with a roughly 17% stake held through his family office, Apeiron Investment Group.
The other unnamed investors will voluntarily submit to another 12-month lockup period, with some limited exceptions, according to a statement from the company. Galaxy didn’t respond to requests for comments on their stake plans and Subversive deferred to Atai which declined to give more details.
Atai’s stock and indeed much of the sector has been trading near record lows after disappointing results from a magic mushroom treatment for intractable depression from Compass Pathways Plc, whose largest shareholder is Atai. The Defiance Next Gen Altered Experience ETF, or PSY, is down more than 50% since its May debut as investors contemplate the rocky path to regulation as well as the need for more definitive trial results.
“Thematically investors haven’t gotten paid on technically positive data,” said Andrew Tsai, an analyst with Jefferies who rates the company a buy. Concerns about the need for repeated dosing and how big the market will be have taken a bite out of the sector, he said in an interview Tuesday before Angermayer’s announcement. It could be over a year before there are more definitive results from trials.
“This is not an overnight story,” Tsai said.
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