This week, a number of financial firms and investment banks initiated coverage of Atai Life Sciences (NASDAQ: ATAI), the Peter Thiel-backed biotech exploring a host of psychedelic compounds and treatments for use in mental health.

Ratings ranged from a very sober sector performance rating from RBC Capital Markets with a $19 12-month price target, to a very bullish Overweight rating from Cantor Fitzgerald, which gave Atai a 12-month price target of $45.

Atai stock was trading at $17.68 at the time of this writing.

Other coverage included an Outperform Rating from Credit Suisse, with a price target of $25; Buy ratings from Citigroup and Aegis Capital with price targets of $26; and a Buy rating from Berenberg with a $35 price target.

Canaccord Genuity also gave Atai a Buy rating and Cowen & Co. rated it as Outperform.

Tailwinds For The “Psychedelic Renaissance” With Atai At The Helm

Atai rang the opening bell at Nasdaq last month with a $225 million IPO, selling 15 million shares at a price of $15 when trading opened on June 18 at $21. The company has raised over $362 million since its inception in 2018.

Cantor expects the biotech to “become a leader in developing drugs to facilitate a new paradigm for treating high unmet need mental health disorders,” praising the company’s decentralized, portfolio business model. The firm highlighted increasing investor interest in the psychedelic space and COVID-related distress as potential tailwinds for the company.

RBC sees a longer-term upside opportunity for success, but in the near term, it expects “in-line trade as the company executes on its early clinical development and in-licensing strategies until the programs mature further and more de-risking data emerge.”

Credit Suisse said Atai “is attractively positioned to capitalize on increased investor/public awareness around psychedelic drug development,” with multiple catalysts in the next 12 to 18 months, including M&A action and results from various ongoing trials.

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Aegis said, “Investors cannot appraise the psychedelic medicine space without giving significant consideration to Atai.”

The firm noted that the company has “constructed a uniquely diverse and powerful platform – judging by the number of indications being pursued, the variety of the APIs, and the quality of the leadership and investor base – which provides exposure to what we believe to be the most high-potential psychedelic substances and most relevant use cases.”

Photo by Bill Oxford on Unsplash

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