Compass Pathways has increased its access to capital, entering into a term loan agreement with Hercules Capital for up to $50 million.
According to Compass’ most recent finical results, the company’s cash situation was:
Cash position at 31 March 2023 of $117.1 million, additional $26.9 million net cash raised through ATM facility to date in the second quarter
It’s a decent financial situation compared to others in the industry, but with Compass’ large Phase 3 trial being rolled out across many sites, the company seems to be preparing in advance for the upcoming increase in expenditures.
Compass has already taken $30 million of the available $50 million loan. See the full press release below.
Kabir Nath, COMPASS Pathways Chief Executive Officer said, “COMPASS is pleased to partner with Hercules for this source of non-dilutive financing to support our COMP360 phase 3 program in treatment-resistant depression, with initial data expected in the summer of 2024. Together with proceeds from our ATM facility reported in May, this facility further strengthens our balance sheet and lengthens our cash runway. Most importantly, this supports our plans to deliver new options to patients suffering with treatment-resistant depression as soon as possible.”
COMPASS Pathways Secures Term Loan Facility for Up to $50 Million from Hercules Capital
LONDON, July 05, 2023 (GLOBE NEWSWIRE) — COMPASS Pathways plc (Nasdaq: CMPS), a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health, today announced that the Company has entered into a term loan agreement with Hercules Capital, Inc. (NYSE: HTGC) for up to $50 million.
Kabir Nath, COMPASS Pathways Chief Executive Officer said, “COMPASS is pleased to partner with Hercules for this source of non-dilutive financing to support our COMP360 phase 3 program in treatment-resistant depression, with initial data expected in the summer of 2024. Together with proceeds from our ATM facility reported in May, this facility further strengthens our balance sheet and lengthens our cash runway. Most importantly, this supports our plans to deliver new options to patients suffering with treatment-resistant depression as soon as possible.”
Under the terms of the agreement, COMPASS drew an initial $30 million at closing on June 30, 2023. An additional $20 million becomes available in two tranches of up to $10 million each. The first of these tranches is available the earlier of (a) 30 days following achievement of certain performance milestones and (b) until December 15, 2024. The second tranche is available during the interest-only period, subject to the lender’s approval. Even if such tranches become available, the Company is under no obligation to draw funds in the future. Additional details of the loan agreement are filed with the Securities and Exchange Commission on a Current Report on Form 8-K filed on July 5, 2023.
“Hercules is pleased to enter into a strategic relationship with COMPASS Pathways as it advances its clinical stage programs,” stated Bryan Jadot, Senior Managing Director and Life Sciences Group Head at Hercules Capital.
Armentum Partners acted as the Company’s exclusive financial advisor on this transaction. Legal counsel was provided by Goodwin Procter and Morrison Foerster.
About COMPASS Pathways
COMPASS Pathways plc (Nasdaq: CMPS) is a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health. Our focus is on improving the lives of those who are suffering with mental health challenges and who are not helped by current treatments. We are pioneering the development of a new model of psilocybin therapy, in which our proprietary formulation of synthetic psilocybin, COMP360, is administered in conjunction with psychological support. COMP360 has been designated a Breakthrough Therapy by the U.S. Food and Drug Administration (FDA) and has received Innovative Licensing and Access Pathway (ILAP) designation in the UK for treatment-resistant depression (TRD). We have commenced a phase 3 clinical program of COMP360 psilocybin therapy in TRD, the largest randomized, controlled, double-blind psilocybin therapy clinical program ever conducted. Previously, we completed a phase 2b study with top line data showing a statistically significant (p<0.001) and clinically relevant improvement in depressive symptom severity after three weeks for patients who received a single 25mg dose of COMP360 psilocybin with psychological support. We are also conducting phase 2 clinical studies of COMP360 psilocybin therapy for post-traumatic stress disorder (PTSD) and anorexia nervosa. COMPASS is headquartered in London, UK, with offices in New York and San Francisco in the United States. Our vision is a world of mental wellbeing. www.compasspathways.com.