Pasithea Therapeutics (KTTA) U.S. Biotech Stock Investment Analysis

Pasithea Therapeutics (KTTA) U.S. Biotech Stock Investment Analysis

※ Pasithea Therapeutics (NASDAQ: KTTA) is a clinical-stage biotech focused on central nervous system (CNS) disorders and RASopathies. Its lead asset, PAS-004 (a next-generation macrocyclic oral MEK inhibitor), targets NF1-associated plexiform neurofibromas (NF1-PN) and MAPK-pathway-driven solid tumors. PAS-004 is currently in a first-in-human Phase 1 trial in solid tumors and a Phase 1/1b trial in NF1-PN, while early-stage CNS assets such as PAS-003 for ALS and PAS-001 for schizophrenia remain in the pipeline 😅

 

1. Company Overview

• Company name: Pasithea Therapeutics Corp.
• Ticker: KTTA (NASDAQ)
• Headquarters: Miami Beach, Florida, USA
• Founded / IPO: Founded in 2020, IPO on Nasdaq in September 2021

1-1. Business Focus

The company describes itself as a “clinical-stage biotech focused on CNS disorders and RASopathies.”
Key points:

• Lead asset: PAS-004
  • Next-generation macrocyclic oral MEK inhibitor
  • Primary targets: NF1-associated plexiform neurofibromas (NF1-PN) and MAPK-pathway-driven solid tumors
• Early pipeline:
  • PAS-003: a humanized monoclonal antibody targeting α5β1 integrin for ALS (amyotrophic lateral sclerosis)
  • PAS-001: a small-molecule candidate for schizophrenia (very early stage)

Historically, Pasithea also operated ketamine IV infusion clinics for depression in the UK, but those clinic subsidiaries (e.g., Pasithea Clinics) were wound down and dissolved around 2024–2025. Today the business is essentially a pure-play biotech R&D company.

1-2. Business Model

• A classic pre-revenue clinical-stage biotech
  • Product revenue is zero, and LTM revenue is effectively non-existent.
  • Operations are funded via IPO proceeds, public and private offerings, warrant exercises, etc.
• The strategy is to clinically validate PAS-004 in NF1-PN and solid tumors, then ultimately seek partnerships, out-licensing and royalties as monetization routes.

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2. Core Pipeline: PAS-004

2-1. Mechanism of Action

PAS-004 is described by the company as a “next-generation macrocyclic MEK inhibitor” in an oral small-molecule format.

• Target: MEK, a key node in the MAPK signaling pathway
• Form: Macrocyclic small molecule → designed to provide
  • More predictable pharmacokinetics (PK) vs. traditional MEK inhibitors
  • Longer half-life and a low Cmax/Cmin ratio (< 2)

The goal is to produce a more stable, smoother exposure profile suitable for chronic, long-term dosing, which is particularly relevant in NF1-PN.

2-2. Strategic Indications

• NF1-associated plexiform neurofibromas (NF1-PN)
  • Benign tumors occurring in patients with NF1 (neurofibromatosis type 1),
    causing pain, functional impairment and disfigurement, with a heavy impact on quality of life.
  • Approved treatment options are limited, and long-term therapy is often required,
    leaving room for a “better tolerated, long-term MEK inhibitor.”
• MAPK-pathway-driven solid tumors
  • Solid tumors with RAS, NF1, RAF mutations or prior failure of BRAF/MEK inhibitors.
  • Phase 1 is aiming to define dose, safety and initial efficacy signals in this population.

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3. Clinical Development – PAS-004 Program

3-1. Solid Tumor Phase 1 (FIH Dose Escalation, NCT06299839)

• Population
  • Patients with advanced solid tumors driven by the MAPK pathway,
    including RAS, NF1, RAF mutations or prior failure of approved BRAF/MEK inhibitors.
• Design
  • Multi-center, open-label, dose-escalation Phase 1
  • Started with capsule formulation; dose escalation has reached 37 mg capsules (Cohort 7).
• Latest data (press update around 24 Nov 2025)
  • In Cohort 7 (37 mg capsule): no treatment-related adverse events (TRAEs) during the DLT window.
  • PK looks linear and dose-proportional, with Cmax/Cmin < 2, i.e., a fairly stable exposure profile.
  • The Safety Review Committee (SRC) recommended escalation to 45 mg capsules (Cohort 8).

The company expects to finish the dose-escalation part of this Phase 1 in 2026, then use the chosen dose to expand into additional MAPK-driven solid tumor settings and potentially align with NF1-PN dosing strategies.

3-2. Adult NF1-PN Phase 1/1b (NCT06961565)

• Population
  • Adult NF1 patients with symptomatic plexiform neurofibromas that are unresectable or have recurred after surgery.
• Design
  • Phase 1/1b, open-label, dose-escalation + expansion cohorts
  • Uses 4 mg and 8 mg tablet formulations to characterize PK, safety and early efficacy.
• Tablet PK data (press update ~21 Nov 2025)
  • At 4 mg and 8 mg, PAS-004 showed linear PK and dose-proportional exposure.
  • Cmax/Cmin < 2, with plasma levels maintained above cell-based IC50.
  • Compared to the capsule, the tablet showed about 3-fold higher exposure (AUC) with lower variability and a half-life of about 57 hours,
    which supports the idea of a chronic, long-term dosing profile suitable for NF1-PN.

3-3. Early Pipeline (PAS-003 / PAS-001)

• PAS-003 (ALS)
  • A fully humanized monoclonal antibody (mAb) targeting α5β1 integrin.
  • The target and candidate selection are based on work from Stanford, Mayo Clinic, OHSU and others,
    including postmortem ALS tissue studies and ALS mouse model data showing improved survival and behavior.
• PAS-001 (Schizophrenia)
  • A small-molecule program aimed at a C4-related target implicated in schizophrenia pathophysiology.
  • Still in the discovery / preclinical stage.

Realistically, most of the near-term value is concentrated in PAS-004, while PAS-003 and PAS-001 are long-dated options that will take significant time and capital to de-risk.

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4. Partnerships & Strategic Positioning

Currently, Pasithea does not have major late-stage commercial partnerships or big-pharma licensing deals. Most of the pipeline is being developed internally.

However:

• PAS-003 for ALS arose from multi-center academic collaboration (Stanford, Mayo, OHSU, etc.),
  which provided target validation and preclinical proof of concept around α5β1 integrin in ALS pathology.

Strategically, the company seems to be following a “de-risk PAS-004 first → then seek meaningful partnerships or out-licensing” approach.

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5. Financials & Valuation Snapshot (as of Q3 2025)

5-1. Basic Financials

• Cash & cash equivalents: about $4.1M (as of 30 Sep 2025)
• Working capital: about $4.2M
• Accumulated deficit: around $59.9M
• Q3 2025 net loss: about –$3.0M, slightly (~1.3%) higher than the same quarter last year
• Operating cash flow (first 9 months of 2025): about –$9.8M
• Financing cash flow (same period): about + $7.1M → the company is effectively surviving via ongoing equity and warrant funding.

In its 10-Q, the company explicitly states that without additional financing, it may not be able to continue as a going concern for 12 months from the balance-sheet date, and it discloses substantial doubt about its ability to continue as a going concern.

5-2. Valuation & Stock Metrics

• Market cap: roughly $3.16M – an extremely small microcap.
• Cash: ~$4.12M → cash > market cap (i.e., the stock trades below cash on the balance sheet).
• Shares outstanding: 7.44M, up ~298% over the past year (massive equity dilution).
• 52-week return: around –86%, an extremely poor performance.
• Reverse split: 1-for-20 reverse stock split executed on 2 Jan 2024.

In short:

“A high-risk, high-volatility biotech microcap where cash exceeds market cap, but revenue is zero and years of losses plus repeat dilution have crushed the equity value.”

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6. Bullish Points (Upside Drivers)

6-1. Attractive Targets: NF1-PN & MAPK-Driven Tumors

• NF1-PN and NF1-related tumors are a rare disease space with significant unmet need despite a relatively small patient population.
• Existing MEK inhibitors (e.g., selumetinib) are associated with
  • Toxicity and exposure variability, making long-term dosing challenging.
• PAS-004 is trying to position itself as a “long-term-dosing-friendly MEK inhibitor” with:
  • Linear PK
  • Cmax/Cmin < 2
  • Long half-life (~57 hours)

If PAS-004 can demonstrate meaningful tumor control with better tolerability and exposure consistency in NF1-PN, it could carve out a differentiated niche within the MEK inhibitor class.

6-2. Dual Strategy: Solid Tumors + NF1-PN in Parallel

• With one drug (PAS-004), the company is simultaneously pursuing:
  • Phase 1 FIH dose escalation in solid tumors, and
  • Phase 1/1b in adult NF1-PN.
• Solid tumor trials provide baseline safety, PK and early efficacy,
  while NF1-PN trials focus on rare-disease PK / tolerability and tumor response.

This dual path keeps future strategic options open:

• A more oncology-heavy expansion (MAPK-driven tumors),
• A rare-disease-focused NF1-PN strategy,
  or some combination of both.

6-3. Option Value of the Early Pipeline

• PAS-003 (ALS)
  • ALS remains a devastating disease with limited treatment options.
  • A novel mechanism (α5β1 integrin-targeted mAb) could, if successful, have blockbuster-level potential.
• PAS-001 (Schizophrenia)
  • Novel target-based therapies in psychiatry often attract strong market attention.

Although both programs are in discovery / preclinical stages, the fact that they exist at all provides long-term optionality beyond PAS-004.

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7. Bearish Risks (Downside Factors)

7-1. Heavy Dependence on a Single Asset: PAS-004

• The vast majority of the company’s value hinges on the clinical outcomes of PAS-004 Phase 1 / 1b.
• Phase 1 safety and PK data can look encouraging, but commercial value will ultimately depend on:
  • Objective response rate (ORR)
  • PFS, duration of response, tolerability, etc.

If PAS-004 shows:

• Underwhelming efficacy, or
• Unexpected toxicity

then the enterprise value of KTTA could be severely impaired.

Some analytics sources note that interim Phase 1 data showed only 1 partial response (PR) among 21 evaluable patients, which is seen by some as below expectations.

7-2. Financial Structure – Going Concern & Dilution

• With $4.1M in cash and $59.9M in accumulated deficit, and with management itself acknowledging going-concern uncertainty,
  the risk that the company needs continuous external financing is very high.
• Shares outstanding rose ~298% in just one year, and a 1:20 reverse split was already executed in 2024.
• This strongly suggests that further equity raises (and thus shareholder dilution) are highly likely going forward.

7-3. Extreme Volatility & Poor Historical Performance

• Since 2022, the stock has at one point been down over 98% from prior highs,
  and the last 12 months’ 52-week return has hovered around –80–90%.
• With a market cap of just a few million dollars,
  intraday price swings can be large, and low liquidity can amplify both rallies and crashes.

7-4. Competitive Landscape

• In NF1-PN and MAPK-driven oncology, there are already:
  • Approved MEK inhibitors, and
  • Various competing pipelines from large pharma and other biotechs.

If PAS-004 fails to show a clear, clinically meaningful edge in terms of:

• Efficacy,
• Safety / tolerability,
• Dosing convenience,

its commercial positioning could be very challenging.

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8. Checkpoints & Key Investment Watchpoints

From an investment perspective, key events and metrics to keep an eye on include:

1. Completion and readout of PAS-004 Phase 1 in solid tumors
   • After Cohort 8 (45 mg capsule), does the company define a recommended Phase 2 dose (RP2D)?
   • What do the ORR, DCR, pERK inhibition levels, and safety profile look like in aggregate?
2. Tumor response and long-term safety in NF1-PN Phase 1/1b
   • Are objective responses and sustained MEK inhibition observed in NF1-PN?
   • Does the data support the “long-term MEK inhibitor for chronic NF1-PN” thesis?
3. Timing, size and terms of future financings
   • New public offerings, private placements, ATM programs, warrant exercises, etc.
   • Does new capital appear to be “dilution just to survive”, or is it clearly tied to value-creating clinical milestones or partnerships?
4. Pipeline diversification progress (PAS-003 / PAS-001)
   • IND filing and Phase 1 initiation for PAS-003 (ALS).
   • Preclinical / target-validation updates for PAS-001 (schizophrenia).
5. Nasdaq listing compliance
   • Share price, market cap and equity thresholds for continued listing.
   • Risk of further reverse splits or deficiency notices.

In short, over the next 1–2 years, KTTA’s share price is likely to be driven primarily by:

(1) PAS-004 clinical data, and
(2) the structure and timing of additional financing.

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9. Quick Q&A (FAQ)

Q1. Does KTTA generate any product revenue yet?
→ No. Pasithea is still a pre-revenue clinical-stage biotech. LTM revenue is essentially zero, and there are no commercial products on the market at this time.

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Q2. What is the key differentiator of PAS-004?

In one line, the company’s pitch is:

“A next-generation macrocyclic oral MEK inhibitor optimized for NF1-PN and MAPK-driven solid tumors, designed for chronic, long-term dosing.”

Key differentiating claims include:

• Linear PK
• Cmax/Cmin < 2
• Long half-life (~57 hours)

These properties could, if confirmed in larger datasets, support a more tolerable, chronic-use profile versus existing MEK inhibitors, particularly in conditions like NF1-PN that require long-term treatment.

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Q3. What are the major upcoming catalysts?

1. Full data from the PAS-004 solid tumor Phase 1 (FIH) – likely around 2026, including a defined RP2D and more mature efficacy/safety data.
2. Interim and expansion-cohort data from the NF1-PN Phase 1/1b trial, including:
   • Objective tumor responses,
   • Durability of response,
   • Safety/tolerability profile over longer-term dosing.

These readouts will shape whether PAS-004 can move forward ambitiously in NF1-PN, pediatrics vs. adults, and broader MAPK-driven tumor settings.

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Q4. What type of investor might KTTA be suitable for?

• Potentially suitable for:
  • Investors familiar with ultra-small, high-volatility clinical-stage biotechs,
  • Those who can tolerate the risk of clinical failure, heavy dilution, and even delisting – i.e., aggressive, event-driven growth investors.
• Probably not suitable for:
  • Conservative value or income investors who prioritize stable cash flows, dividends and visible revenue.

In practical terms, KTTA is closer to a “lottery-ticket / option-like” high-risk biotech play for a small slice of a portfolio, rather than a core long-term holding.