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The pioneering mental health company and psychedelic mushroom company COMPASS Pathways (ticker: CMPS) is continuing to make historic progress as evidenced by their third quarter 2020 financial results. From their $146.6 million IPO on the Nasdaq to the continued progress of their novel psychedelic compound, COMP360, in clinical trials, the report offers promising insight into the Compass strategy and current state of play.  

 

In their 3rd quarter financial results report, George Goldsmith, Chairman, CEO and Co-founder, COMPASS Pathways, said, “This has been a significant quarter, with an IPO that gives us the funds needed to advance our mission and transform mental health care. Recent hires for the company build further important expertise within our strong leadership team, including in data science and digital health, which will be core to the future of mental health care. We remain fully focused on execution of our phase IIb trial investigating our COMP360 psilocybin therapy for treatment-resistant depression and, with scientific partners in our recently established Drug Discovery Center, are also evaluating the potential of early stage compounds to address mental health challenges.” 

 

This guide will identify and discuss three major highlights from their recent financial report to give you deeper financial insight into this dynamic company leading the charge in the psychedelic renaissance.

Read: Canaccord Genuity Report Projects $80 Price Target for Compass Pathways

Highlight #1: CMPS is Very Well Capitalized, Affording Them Greater Selectivity About New Capital

Having just completed their upsized initial public offering (IPO) on the Nasdaq for $146.6 million, the Compass Pathways team is in a strong position financially. This allows them to be more selective when it comes to accepting new capital over the coming years. This  affords them ability to hold out for the optimal terms that are the best strategic fit for them. The report demonstrates that the Compass Pathways team has a clear spend plan over the next several years on various activities, which shows decisive planning and a clear vision. This financial flexibility will allow them to align with capital they feel is best in alignment with their mission, values and overall strategy. This is certainly advantageous to the Compass pathways team and enables them to continue making powerfully impactful decisions moving forward.

compass pathways financial report third quarter 2020

Highlight #2: CMPS is Dedicating Serious Resources to R&D–and it’s Working

With revenue still years in the distance for companies like Compass Pathways, the need to meet research milestones now is greater than ever before. The continued progress through to phase IIb clinical trials of the team’s synthetic psilocybin formulation, COMP360, marks an important achievement for Compass. 

With the lead indication for COMP360 being treatment-resistant depression (TRD), and recent studies demonstrating psilocybin to be four times more efficacious than SSRI’s in the treatment of depression, all signs point towards a promising future for the Compass Pathways team. Currently, R&D at CMPS is over 50% of their operating expenses. With the progress of COMP360 is making through the drug development pipeline, it is clear this significant investment is paying off in a big way.

As the medicalization of psychedelics continues, paying attention to R&D spending and progress through clinical trials will consistently be an important indicator of success.

Read: Compass Pathways Leads the Way in Psychedelic Research & Development Spending

Highlight #3: CMPS Builds Robustly Expands Leadership Team & Opens Psychedelic Drug Discovery Center

 

The importance of a deeply experienced clinical leadership team in psychedelic drug development can’t possibly be overstated. The recent hires highlighted in the Compass Pathways third quarter financial results demonstrates significant strengthening of their board and leadership team with the appointments of Linda McGoldrick as non-Executive Director, Greg Ryslik as Senior Vice President of Data Science, Machine Learning and Digital Health Research, and Stephen Schultz as Senior Vice President of Investor Relations. 

Additionally, the team at Compass has entered into a sponsored research agreement with the University of the Sciences in Philadelphia to establish the Drug Discovery Center. The project is aimed at exploring and developing optimised psychedelic and other early stage compounds targeting the 5HT2A receptor. This receptor subtype is the hallmark receptor of interest in psychedelic research and a promising target in the treatment of mental illness.

If you’re interested to learn about other notable research partnerships in the psychedelic space, make sure to read: Pioneering Psychedelic Company MagicMed Forms Strategic Partnership With University of Calgary.

compass pathways financial report third quarter 2020

A Look Ahead for Compass Pathways

Between having enough capital to fund operations until 2023 and robust progress COMP360 is making through clinical trials, the Compass Pathways team is at a serious advantage. This report certainly makes clear that the Compass Pathways team is well on their way to achieving their mission of accelerating patient access to evidence-based innovation in mental health.

compass pathways financial report third quarter 2020