Compass Pathways plc (Nasdaq: CMPS), based in London, has announced significant advances in psychedelic medicine involving psilocybin therapy for mental health conditions. They recently secured $285 million in private funding, with $125 million expected in investments and up to an additional potential of $160 million, as detailed in various announcements by Compass Pathways plc (Nasdaq: CMPS).
TCGX and Aisling Capital of healthcare specialist investors enlisted as investors, along with participation from various other investment firms including Vivo Capital, RA Capital, Surveyor Capital, Paradigm BioCapital Advisors LP, Soleus Capital Armistice Capital Logos Capital PFM Health Sciences Laurion Capital Management to participate.
Investment Details
This investment agreement involves the sale of over 16 million American Depositary Shares (ADSs) priced at $7.78 each at an approximate market value. In addition to their shares, investors will also receive warrants priced at $9.93 and valid for three years – if fully exercised this could add another $160 million in funding to this deal which is scheduled to close on August 18, 2023, subject to customary closing conditions.
Compass anticipates that its net proceeds will extend its cash runway into late 2025. Morgan Stanley and TD Cowen will both receive approximately 6% of gross proceeds as their fees.
Potential Impact on Psychedelic Medicine
Compass CEO Kabir Nath emphasized the investment as evidence of psychedelic medicine’s potential in treating conditions like treatment-resistant depression (TRD), posttraumatic stress disorder (PTSD) and anorexia nervosa. Nath noted this investment as further proof of its efficacy while validating its potential by providing rigorous evidence-based practices in its approach to the field.
COMPASS Pathways recently unveiled plans to launch a phase 3 trial of its synthetic psilocybin formulations (COMP360) for treating treatment-resistant depression in late 2022. In parallel with these efforts, phase 2 trials for PTSD and anorexia nervosa will also commence soon. Furthermore, in October 2018 the FDA granted Breakthrough Therapy designation to COMP360.
Compass Bioscience’s recent funding will aid many aspects of its research and commercial preparation efforts, specifically its pivotal phase 3 clinical program in TRD; commercial planning activities; on-going phase 2 trials in anorexia nervosa and PTSD; development of digital technologies to augment therapies; as well as other general corporate purposes.
An Path Toward FDA Approval
Compass Pathways and psychedelic medicine have generated significant momentum since their debut, reflecting an ever-increasing need for innovative mental health solutions. If approved by FDA in mid-2024 for treating depression and PTSD respectively, their presence could transform mental healthcare significantly.
Compass Pathways and the wider field of psychedelic medicine appear poised for an optimistic future with both private funding and supportive regulatory signals pointing in its favor. With enough resources to sustain Compass Pathways’ research and development efforts through late 2025, innovative mental health treatments seem closer than ever.
References:
Adam Jackson, Compass Pathways Lands $125M Investment
Chris Larson, Compass Pathways Signal Confidence in Psychedelic Research Efforts with $285M in Funding
COMPASS Pathways Press Release, Compass Pathways Announces Up to $285 Million Private Placement Financing Joined by Leading Healthcare Investors