Atai Life Sciences Remains Undervalued, Analyst Initiates With Around 125% Stock Upside

Core Insights - Needham initiated coverage on Atai Life Sciences NV, highlighting its focus on developing treatments for mental health, particularly its lead drug candidate BPL-003 for treatment-resistant depression [1][2] - The stock is gaining traction, with positive topline results from the Phase 2b study showing that BPL-003 met its primary and key secondary endpoints, demonstrating rapid and durable antidepressant effects [2] - Needham assigned a Buy rating with a price forecast of $12, noting that Atai has close to $150 million in cash, positioning it strongly and indicating it remains undervalued [2] Drug Development and Market Position - BPL-003 is positioned to potentially offer greater convenience and improved efficacy compared to Johnson & Johnson's Spravato, with expectations to capture around 20% of the market by 2035, driving over $2.5 billion in sales [3] - The analyst assigned a 60% probability of success to BPL-003, citing robust Phase 2b data and the expected Phase 3 study addressing FDA guidance [4] - Atai's strategy of shifting to wholly owned assets is expected to enhance its ability to deliver shareholder value [4] Pipeline and Additional Therapies - Atai Life Sciences has a pipeline that includes psychedelic-based therapies such as VLS-01 (buccal film DMT) for treatment-resistant depression and EMP-01 (oral R-MDMA) for social anxiety disorder, both in Phase 2 clinical development [5] - The company is also advancing a drug discovery program aimed at identifying novel, non-hallucinogenic 5-HT2AR agonists for treatment-resistant depression [5] - Atai's stock was reported to be up 4.80% at $5.35 at the time of publication [5]