Peter Thiel-Backed Psychedelics Company Gets FDA Approval To Study Ketamine Therapy

The U.S. Food and Drug Administration has authorized German psychedelics startup Atai Life Sciences to conduct a clinical trial on a nonpsychedelic form of ketamine for treatment-resistant depression.

The company will study R-ketamine, an enantiomer of ketamine, the FDA-approved dissociative anesthetic that is used for general anesthesia and off-label as a popular treatment for depression.

R-ketamine’s promise is that it may not produce a psychedelic experience while still providing rapid antidepressant effects. If proven in clinical trials, R-ketamine could be a new medication for people with treatment-resistant depression and safe enough to use at home, not in a clinic under medical supervision like ketamine and Spravato, another form of the drug that has been approved by the FDA.

Atai’s majority-owned subsidiary Perception Neuroscience will launch the first in a series of clinical trials on R-ketamine early this year in the U.S. The first trial will be a drug interaction study.

Florian Brand, the CEO and cofounder of Atai, which is backed by billionaire Peter Thiel and is publicly traded on the Nasdaq, says that if the trials successfully show that R-ketamine is a fast-acting antidepressant safe enough for at-home use, it “would be a big game changer for patients.”

Perception Neuroscience has already launched two studies on R-ketamine abroad.

The phase 1 trial, which was conducted in New Zealand with 58 adults who received different doses of an intravenous infusion of R-ketamine in February, found that their compound, which they refer to as PCN-101, was “safe and well-tolerated” at all doses up to 150mg. Participants reported no serious adverse effects. The second stage of the study compared PCN-101 to S-ketamine, which is the ingredient in Spravato. The results showed that Perception’s compound required substantially higher doses to induce similar psychedelic experiences than S-ketamine.

In September, Perception was approved to launch a double-blind, placebo-controlled phase 2a trial in patients with treatment-resistant depression in Europe. The study plans to enroll 93 patients who will receive either a placebo, a 30mg dose or a 60mg dose of R-ketamine, which will be given intravenously. The trial will be studying if the drug is safe and effective in reducing depressive symptomology. Results should be ready by the end of 2022.

Terence Kelly, the CEO of Perception Neuroscience, which is based in New York, says that he is encouraged by how R-ketamine is progressing through the regulatory process. “We believe that PCN-101 has the potential to offer a differentiated therapeutic effect, in terms of both efficacy and ease of administration, for clinicians and patients,” Kelly said in a statement.

Srinivas Rao, Atai’s chief scientific officer, says that the psychedelic experience is important for many of the drugs the company is pursuing, but R-ketamine’s nonpsychedelic properties is what makes it a potential disruptive medication for treatment-resistant depression.

“At-home use—that’s the key,” says Rao. “Everything else that we’re looking at, like psilocybin, must be administered in the doctor’s office. This is obviously important for those compounds. But if we can get something that can be administered at home as a rapid-acting agent, that’s a potential much larger market and certainly broadens the appeal of the compound.”

Big Pharma has already taken interest in R-ketamine. In March 2021, Otsuka Pharmaceutical announced a $20 million licensing agreement to develop and commercialize Perception’s R-ketamine compound in Japan as a potential treatment for major depressive disorder and treatment-resistant depression. Otsuka will have exclusive rights to PCN-101 in Japan. If Otsuka successfully brings the drug to market, Perception will receive royalties on sales.

The opportunity for a new blockbuster medication to treat conditions like depression, anxiety and post-traumatic stress disorder is huge. Prescription sales for depression is estimated to be $50 billion a year globally, while the mental health market is worth about $100 billion in annual sales. While biotech analysts say that FDA-approved psychedelic-assisted therapy could seize $10 billion in annual sales by targeting the treatment-resistant depression subcategory, the real opportunity lies in replacing drugs like Prozac, Zoloft and other selective serotonin reuptake inhibitors.

An estimated 100 million people have treatment-resistant depression around the world, which is a sizable market for R-ketamine.

“What excites us, certainly, is what you call blockbuster potential,” says Brand. “We’re really interested in large unmet needs, large markets, large opportunities.”

Atai is also the largest investor in Compass Pathways, a U.K.-based clinical stage company that is developing a patented form of psilocybin to be used in conjunction with therapy for treatment-resistant depression. In November, Compass Pathways’ much-anticipated FDA-approved phase 2b clinical trial found that patients who took a single psychedelic dose of psilocybin, the main ingredient in “magic mushrooms,” in conjunction with therapy reported almost immediate and significant reduction in depressive symptoms that lasted weeks compared with patients who were given a 1mg dose, which is so low it’s essentially a placebo. 

Atai, through another majority-owned subsidiary, is building a suite of second-generation psychedelics that feature a shorter-lasting two-hour trip.

Brand says that when it comes to treatments that involve a psychedelic experience, the length of the psychedelic experience itself is an obstacle to mainstream adoption.

“We’re all about scale,” says Brand.

By modifying psychedelic molecules to shorten the trip, more patients might try it and insurance companies could be more willing to cover the treatment.

Brand and many others in psychedelic medicine believe that the no-trip treatment will have a prominent place in the future of the industry.

“We have a vision for precision psychiatry,” says Brand. “Ultimately, the goal is to identify which type of treatment is the right one for which patient. Not everyone will necessarily always want to do psychedelic agents like psilocybin. For some, it might be the appropriate treatment, but it’s not really feasible for everyone.”

Rao says the future is in choices. Finding a medication that helps patients with treatment-resistant depression is particularly difficult considering that these patients have tried many different drugs without success. About 30% of people with depression find no success with available treatments. Rao says if R-ketamine is approved it would become another tool doctors can use.

“It depends on where you are in your disease process—you may need esketamine, or you may need psilocybin or DMT, or something else to induce and then you could maintain with R-ketamine,” says Rao. “But we don’t yet know how things will shake out.”