Compass Pathways In Comfortable Cash Position For R&D

During an earnings and clinical program update conference call today, George Goldsmith, founder and CEO of Compass Pathways (NASDAQ: CMPS), along with Dr. Guy Goodwin, chief medical officer and Mark Falvey, chief financial officer, discussed developments related to COMP360, updates about their work with the FDA, and promoted their completed phase IIb clinical trial of psilocybin therapy for treatment-resistant depression (TRD) in 22 sites across Europe and North America, which was the largest randomized, controlled, double-blind psilocybin therapy clinical trial conducted. 

The company is also running a phase II clinical trial of COMP360 psilocybin therapy for post-traumatic stress disorder (PTSD), and working on developing treatments for both anorexia nervosa and autism. 

Compass announced some of its goals for 2022:

An end-of-phase II meeting with the FDA and launch of their phase III program of COMP360 psilocybin therapy in TRD.

Publication of COMP360 clinical data in a peer-reviewed journal and at medical conferences.

Progression of their phase II COMP360 psilocybin therapy trial in PTSD.

Launch of COMP360 clinical development programs in additional indications.

Implementation of data and technology strategy to support their predictive and preventative model of mental health care.

Scaling up of their therapist training platform to support their phase III program.

Development of new compounds through their discovery center and other collaboration.

Earnings

In terms of earnings, Compass has been all over the place in 2021, up over predictions in earnings per share by 33.12 percent in Q1; down 18.92 percent in Q2; up again 19.93 percent in Q3; and down 22.86 percent in Q4.

Share volume is up slightly over the last 10 days from the previous 3 months—349.43 v. 265.9—with 42.51 shares outstanding. Insiders own 48.87 percent of shares, and institutions 19.65 percent.

The Compass stock price has been trending down significantly, now near a 52-week low of $7.36 from a high of $48.96 on November 1, 2021. Seven analysts rate it as either a buy or strong buy.

Mike Falvey, chief financial officer for Compass, reported during the conference call today a net loss for the three months ended March 31, 2022, of $21.2 million, or 50 cents per share, compared with a net loss of $12.7 million or 35 cents per shares during the same period in 2021. These results include non-cash share-based compensation of $3.1 million in 2022 and $1.7 million in 2021.

Research and development expenses were $15.4 million for the three months ended March 31, 2022, compared with $6.9 million during the same period in 2021. “The increase was attributable to an increase of $5.1 million in external development expenses, $2.6 million in personnel expenses, and $1 million in non-cash share-based compensation,” Falvey said.Increases in the quarter were primarily due to preparation for the expected launch of our phase three trial and TRD scheduled for the second half of this year.”

General and administrative expenses were $10.1 million for the three months ended March 31 2022, compared with $6.7 million during the same period in 2021. “The increases this quarter were primarily in support of our growing research and development organization and operations, and activities to support operation as a public company,” Falvey said.

Compass continues to maintain a strong financial position with cash and cash equivalents of $243.7 million on March 31, 2022, compared with $273.2 million at December 31 2021,” Falvey said. “With these resources, we expect to be able to fund our operations into 2024. We view our strong balance sheet as an important strategic asset which we will continue to manage carefully as we invest to advance these promising potential therapies while creating value for our shareholders,” he said.

Dave Hodes

David Hodes is a business journalist based in the Washington D.C. metropolitan area. He has contributed feature articles to several cannabis and psychedelics publications, as well as general business/lifestyle publications, on a variety of topics. Hodes was selected as 2018 Journalist of the Year by Americans for Safe Access. He is a member of the National Press Club, and the deputy booking agent for the National Press Club Headliners Committee.


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