Compass Pathways Reports Q3 2024 Financial Results and Business Updates

Compass Pathways plc, a biotechnology company listed on Nasdaq under the ticker CMPS, has released its financial results for the third quarter of 2024 and provided updates on its recent business activities. The company is focused on developing innovative treatments for mental health conditions, with a particular emphasis on treatment-resistant depression (TRD) through its lead program, COMP360 psilocybin therapy.

CEO Kabir Nath emphasized the importance of the COMP360 program, expressing confidence in its potential as an effective treatment for patients with severe mental illnesses. Nath highlighted the company's commitment to providing new treatment options for individuals suffering from TRD. Due to a shift in the timeline for the phase 3 pivotal program, Compass Pathways has decided to streamline its operations to ensure resources are concentrated on completing the trials, regulatory filings, and eventual commercialization of COMP360 if approved. This strategic move includes a reduction in workforce by approximately 30% and exiting activities not directly related to the core program.

The phase 3 clinical trial program for COMP360 is the largest randomized, controlled, double-blind psilocybin treatment study conducted to date. The top-line data from the pivotal COMP005 trial is anticipated in the second quarter of 2025. In response to increased regulatory scrutiny, the company has postponed the data release for COMP006 until the completion of the 26-week blinded period to mitigate the risk of unblinding, now expecting results in the latter half of 2026.

To further focus on the COMP360 program, Compass Pathways will halt its preclinical efforts unrelated to COMP360 and explore externalization opportunities for its digital health tools. This reallocation of resources is also reflected in the company's financial performance.

For the three months ending September 30, 2024, the company reported a net loss of $38.5 million, translating to a loss of $0.56 per share. This is an increase compared to the net loss of $33.4 million, or $0.67 per share, during the same period in 2023. For the first nine months of 2024, the net loss stood at $111.8 million, or $1.67 per share, compared to $85.9 million, or $1.81 per share, for the corresponding period in 2023.

The rise in research and development expenses, which reached $32.9 million for the third quarter of 2024, up from $21.5 million in the same quarter of the previous year, is primarily due to the advancement of the COMP360 phase 3 clinical trials and higher personnel costs. Similarly, for the nine months ending September 30, 2024, R&D expenses increased to $86.9 million from $60.4 million in the same period in 2023.

General and administrative expenses also saw an uptick, amounting to $15 million for the third quarter of 2024, compared to $12.5 million for the same period in the previous year. This increase is attributed to higher personnel costs and increased legal and professional fees. For the nine-month period ending September 30, 2024, these expenses were $42.9 million, up from $38.1 million in the same timeframe in 2023.

As of September 30, 2024, Compass Pathways reported cash and cash equivalents of $207 million, slightly down from $220.2 million at the end of 2023. The company's debt was $29.8 million as of the same date, compared to $28.8 million as of December 31, 2023.

Looking ahead, Compass Pathways anticipates net cash used in operating activities for the fourth quarter of 2024 to be between $37 million and $43 million. For the full year, this figure is expected to be between $114 million and $120 million. The company projects that its cash position as of September 30, 2024, will be sufficient to cover operating expenses and capital requirements through at least 2026.

Compass Pathways continues to work on expanding access to evidence-based mental health innovations and remains focused on its mission to improve the lives of those battling mental health conditions. The ongoing development and potential commercialization of COMP360 is a testament to the company's dedication to addressing the unmet needs in mental health treatment.