Thiel Backs Psychedelic-Drug Startup in Latest Funding Round
(Bloomberg) -- Billionaire investor Peter Thiel made his first investment in ATAI Life Sciences, a German startup that’s looking into ways of using magic mushrooms and other psychedelics to treat mental-health disorders.
Thiel was among several participants in a $24 million convertible-note sale that closed in March, ATAI said in a statement. Thiel Capital LLC Chief Medical Officer Jason Camm will become a director of the Munich-based biotech which, according to a person with knowledge of the situation, is working toward an initial public offering within 12 months.
ATAI is in talks with pharmaceutical companies and institutional biotech funds as psychedelic treatments gain traction. The company said the money raised by the bond sale will help it broaden its platform, potentially through acquisitions.
ATAI is studying how to use psychedelics to treat disorders including addiction, depression and anxiety. The company plans to start a mid-stage trial of ibogaine, a naturally-occurring psychoactive compound, with partner DemeRx to treat opioid addiction. It’s also investigating the use of arketamine for depression. The antidepressant drug market alone was valued at around $13.7 billion in 2018 and is projected to grow as much as 24% by this year.
“No single treatment will work for all,” Co-Founder and Chief Executive Officer Florian Brand said in an interview. “We look at treatments that at least have a long-lasting effect, if not curative potential.”
Future Ventures, Galaxy Investment Partners’ Michael Novogratz, Actavis Group’s Bjorgolfur Thor Bjorgolfsson, Efrem Kamen and ATAI co-founder Christian Angermayer also participated in the convertible-bond sale. Fellow psychedelic-drug company Mind Medicine recently closed a similarly sized funding round ahead of its IPO on Toronto’s NEO stock exchange.
ATAI confirmed that it’s aiming for an IPO, but declined to give a time frame.
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