Atai Life Sciences Stock Jumps on Needham 'Buy' Rating
Analyst sets a $12 price target, citing strong results for the company's depression drug and a potential $2.5 billion in sales.
Shares of Atai Life Sciences (ATAI) surged on Monday after Needham initiated coverage with a 'Buy' rating and a $12 price target, suggesting a potential upside of around 125%. The bullish call comes on the heels of .
Needham analyst Ami Fadia highlighted the company's strong position, noting that Atai is currently undervalued with nearly $150 million in cash. The firm's positive outlook is largely based on the potential of BPL-003, which has shown rapid, robust, and durable antidepressant effects in its clinical trials. Needham projects that the drug could capture a significant market share, with a potential for over , exceeding the current consensus.
The analyst also noted that BPL-003 could offer a more convenient and potentially more effective treatment than Johnson & Johnson's Spravato, a currently available option for treatment-resistant depression. Needham has assigned a 60% probability of success to BPL-003, supported by the strong Phase 2b data and a planned Phase 3 study that will address FDA guidance.
In addition to BPL-003, Atai's pipeline includes other promising treatments for mental health conditions. VLS-01 is being developed for treatment-resistant depression, and EMP-01 is in Phase 2 for social anxiety disorder. The company is also working on a drug discovery program for non-hallucinogenic treatments for depression. , ATAI stock was up 4.80% at $5.35.