Adam Jackson
Mental health biotech firm Compass Pathways (Nasdaq: CMPS) reported its third-quarter financials ending Sept. 30, as well as the status of ongoing clinical trials.
The London-based company is advancing trials of its flagship COMP360 therapy, a psilocybin-based treatment for mental health disorders. CEO Kabir Nath emphasized the progress in European clinical trial recruitment for phase 3 programs, noting the reporting of initial data by next summer for its treatment-resistant depression study.
“The August financing, led by specialist biotech investors, provides a strong financial foundation that permits Compass to move forward confidently with our clinical programs, as well as all supporting studies for a potential new drug application filing with the FDA,” Nath said in a statement. “We also continue to invest in our pre-commercial work to ensure we are prepared for a successful COMP360 launch, if approved.”
With two pivotal trials, COMP005 and COMP006, underway, Compass anticipates releasing preliminary results for its treatment-resistant depression treatment in summer 2024 and for a subsequent study by mid-2025. A phase 2 study for post-traumatic stress disorder is also expected to unveil top-line data before year’s end.
The firm’s financials were buoyed by that August private placement garnering $125 million, with the potential to secure an additional $160 million if warrants issued are fully exercised. The investment round was specifically highlighted as a vote of confidence by specialist biotech investors, the company noted.
Compass reported $248 million in cash and cash equivalents, up from $143.2 million at the end of 2022. The company’s financial maneuvers, including a term loan and private placement, have extended its operational runway into late 2025, despite reporting a net loss of $33.4 million for the quarter.
That’s a meaningful increase from the net loss of $18.4 million recorded during the same period last year. The rise in net loss reflects Compass’ intensified investment in research and development for its psilocybin therapy, particularly in large-scale clinical trials.
Still, the loss is seen as a strategic investment in the potential blockbuster therapy, which the company believes will have a huge impact on mental health treatment if approved.
The company’s R&D expenses surged to $21.5 million for the quarter. G&A expenses saw a slight uptick due to higher facilities costs and share-based compensation.
Looking ahead, Compass Pathways adjusted its fourth-quarter financial outlook, projecting operating cash use between $9 million and $15 million, partially dependent on the UK’s R&D tax credit.
