COMPASS Pathways Secures $285 Million in Private Funding

LONDON, England–COMPASS Pathways plc, (Nasdaq: CMPS) a London-based company listed on Nasdaq under the ticker CMPS, announced it has successfully secured $285 million in private funding. This funding is intended to advance the company’s efforts in utilizing psychedelics as a potential treatment for various mental health conditions.

The company is evidently confident in its path towards obtaining approval from the U.S. Food and Drug Administration (FDA) and has garnered significant investor support for its initiative. COMPASS Pathways has named 11 investment firms that took part in this funding round, with hints of additional participants. The company anticipates that these funds will sustain its operations until late 2025.

Kabir Nath, the CEO of COMPASS Pathways, expressed the significance of this investment as a validation of the potential of psychedelic medicine and the importance of adhering to a rigorous, evidence-based approach.

Leading the funding round were investment firms TCGX and Aisling Capital, accompanied by investors such as Vivo Capital, RA Capital, Paradigm BioCapital Advisors LP, Logos Capital, and Laurion Capital Management.

The secured funding can be categorized into two parts. Initially, the company has access to about $125 million in gross proceeds. Additionally, it holds the potential to secure around $160 million in gross proceeds through the full exercise of three-year warrants.

During the previous year, COMPASS Pathways announced its intentions to initiate a phase 3 clinical trial involving its synthetic psilocybin formulations (COMP360) for treating treatment-resistant depression. This trial was touted as the first-ever phase 3 study of psilocybin therapy. Currently, the company is in the process of recruiting patients for this study. Additionally, the company is engaged in phase 2 trials using COMP360 to address post-traumatic stress disorder (PTSD) and anorexia nervosa.

The secured funding will also contribute to the company’s preparations for commercial activities.

In October 2018, COMPASS Pathways received the FDA’s Breakthrough Therapy designation for its COMP360 treatment designed for patients with treatment-resistant conditions. This designation is reserved for treatments that exhibit substantial evidence of being superior to the existing standard. It also facilitates the expedited development and review of drugs intended for “serious conditions,” as defined by the FDA.

Presently, ketamine is the sole psychedelic-like drug legally accessible. However, its use in mental health treatment is off-label, as it lacks FDA clearance for this purpose. Nevertheless, expectations are growing that MDMA and psilocybin may receive FDA approval for treating depression and post-traumatic stress disorder by mid-2024, as reported by The Intercept and anticipated within the Biden administration.