ATAI Life Sciences N.V.

ATAI Life Sciences N.V. (NASDAQ: ATAI) is a clinical-stage biopharmaceutical company that aims to revolutionize mental health therapy. ATAI was founded in 2018 in response to a significant unmet need and lack of innovation in the mental health treatment landscape. Its mission is to acquire, incubate, and quickly develop new therapies to treat depression, anxiety, addiction, and other mental health diseases. ATAI's business approach combines financial, technological, scientific, and regulatory experience focusing on cutting-edge substances, such as psychedelic therapy and other medications, with distinct safety profiles and therapeutic promise.

Key Highlights

• The company reported license revenue of USD 20.38 million in FY21 (ended December 31, 2021), however it didn’t reported any revenue in FY20.
• In FY21, ATAI’s net loss decreased to USD 167.81 million from USD 169.84 million in FY20.  
• As of December 31, 2021, the company had cash and cash equivalents of USD 362.27 million and total outstanding debt of USD 74 thousand.
• ATAI’s net margin for FY21 was -650.8%, significantly lower than the industry median of 1.9%.
• ATAI has a strong liquidity, Current ratio of 17.92x at the end of FY21 vs. Industry Median of 2.96x.
• ATAI’s FY21 cash cycle of 68 days is significantly lower than the industry median of 148 days.
• Stock is currently trading below its crucial short-term (50-day) and long-term (200-day) SMA support level, a bearish indicator.
• Stock is currently leaning towards the lower end of the 52-week range of USD 3.05 to USD 22.91.

Conclusion: Considering the company’s visibility into profitability, reduction of losses, liquidity, strength of balance sheet, technical indicators, and associated risks. We recommend a "Watch" rating on the stock at the current price of USD 3.55, up 9.23%, as of May 13, 2022, at 07:18 AM PDT.

Technical Price Chart (as of May 13, 2022, at 07:18 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Closing price as of May 13, 2022, at 07:18 AM PDT.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.