Christian Angermayer On His Continued Belief In The Psychedelic Sector and Atai Life Sciences
In this new Trade To Black podcast, TDR Founder Shadd Dales and contributor Anthony Varrell interview the founder of Apeiron Investment Group, Christian Angermayer. Aperion is best known for deep involvement in psychedelic industry, particularly through its 22.4% stake in atai Life Sciences N.V. (NASDAQ: ATAI) and COMPASS Pathways plc (NASDAQ: CMPS). Christian goes in-depth on the reasons for his continued steadfast believe in atai, calling it “biggest entrepreneurial opportunity I have ever encountered as an investor”.
Much of this new interview is based on Christian’s recent LinkedIn post titled 14 reasons why I am increasing my stake in atai Life Sciences, which garnered a lot of attention. The post is an introspective analysis on why Christian is staying the course and sticking with his long term vision in the company, despite some early clinical trial setbacks and underperforming biotech sector.
The 14 reasons supporting Christian Angermayer’s decision to continue adding to atai Life Sciences are as follows:
1) A simple sum-of-the-parts calculation
2) atai’s pipeline
3) Prior evidence in humans
4) Market size
5) Market share
6) atai Life Sciences patent portfolio
8) Digital & Data
9) A diversified pipeline – which can be better communicated
10) Inflation and interest rates don’t matter in the medium term
11) Setbacks make us stronger
12) Quality of the management
13) Strong cash position coupled with entrepreneurship
14) I am not alone in my assessment
Regarding reason ten, Christian points out that because atai’s pipeline is “late stage’, meaning that its drug portfolio is already in clinical stage trials. As such, the effect of rising interest rates shouldn’t effect the company sas much as a pre-clinical biotech companies.
Biotech companies are often valued using discounted cash flow (DCF) models, which take into account future expected cash flows and discount them back to their present value using a discount rate. The discount rate used in DCF models represents the risk-adjusted rate of return required by investors to compensate for the time value of money and the risk associated with investing in the company.
In rising interest rate environments, the discount rate used in DCF models typically increases. This is because investors generally require a higher rate of return to compensate for the increased risk of inflation and interest rate movements. As a result, the present value of future cash flows decreases, leading to a lower valuation for the company.
Click here to see our previous Trade To Black interview with atai Life Sciences investor, Christian Angermayer.