COMPASS Pathways plc (Nasdaq: CMPS), a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health, reported its financial results for the second quarter 2023 and gave an update on recent progress across its business.
“This has been another quarter of steady, strong progress across the business, including the continued execution of our COMP360 phase 3 trials in treatment-resistant depression, important progress in laying the commercial groundwork for COMP360 with the recent acceptance by the American Medical Association of a CPT III code to describe the support services required during administration of psychedelic drugs, and the FDA’s recently issued guidance on psychedelic drug development that represents an important validation of our area of science. Further, the cash received from the draw down from our debt facility with Hercules and sales of equity through our ATM program lengthened our cash runway significantly and allows us to continue to invest in our COMP360 development programs at full speed.”
Kabir Nath, Chief Executive Officer
Business highlights
COMP360 psilocybin therapy in treatment-resistant depression (TRD):
- Phase 3 program underway, composed of two pivotal trials with an integrated, long-term outcomes component
- Pivotal trial 1 (COMP 005): single dose monotherapy, n=255, topline data expected summer 2024
- Pivotal trial 2 (COMP 006): fixed repeat dose monotherapy, n=568, topline data expected mid-2025
- Long-term follow up in each trial will generate data on duration of response and potential effect of retreatment
- Both phase 3 trials ongoing and on track
- Current Procedural Terminology (CPT®) III code language for in-person support services during psychedelic therapy approved by the American Medical Association and aligns with expected COMP360 treatment support requirements.
Additional COMP360 development activities:
- Phase 2 trials in anorexia nervosa and post-traumatic stress disorder (PTSD) ongoing
- Investigator-initiated study data in depression in cancer patients following single dose of COMP360 psilocybin presented at ASCO 2023
- Investigator-initiated study demonstrating the potential for COMP360 psilocybin treatment in female patients with anorexia nervosa published in Nature Medicine
- Opinion paper on the definition of “psychedelic-assisted psychotherapy” using psilocybin published in American Journal of Psychiatry
- Data from an open-label study that suggest that the use of selective serotonin reuptake inhibitor (SSRI) anti-depressants does not interfere with the potential therapeutic effect of COMP360 published in Neuropsychopharmacology
Financial highlights
- Cash and cash equivalents were $148.2 million as of 30 June 2023, compared with $143.2 million as of 31 December 2022.
- Runway lengthened through term loan facility and sales of shares under the At the Market (“ATM”) facility
- Long-term debt was $28.1 million as of 30 June 2023, compared with $0 million as of 31 December 2022.
- Received $26.9 million in net proceeds through our ATM facility in second quarter and entered into a term loan agreement with Hercules Capital, Inc. (NYSE: HTGC) in June 2023 for up to $50 million, with net proceeds after issuance costs of $28.8 million received in the second quarter. Total net cash provided by financing of $55.9 million in the second quarter.
- Net loss for the three months ended 30 June 2023 was $28.3 million, or $0.62 loss per share (including non-cash share-based compensation expense of $4.6 million), compared with $21.0 million, or $0.50 loss per share, during the same period in 2022 (including non-cash-share-based compensation expense of $3.2 million).
- Net loss for the six months ended 30 June 2023 was $52.5 million, or $1.19 loss per share (including non-cash share-based compensation expense of $8.6 million), compared with $42.2 million, or $1.00 loss per share, during the same period in 2022 (including non-cash-share-based compensation expense of $6.3 million).
- Research and development (R&D) expenses were $19.8 million for the three months ended 30 June 2023, compared with $15.9 million during the same period in 2022. Of this increase, $2.7 million related to an increase in external development expenses as we continue to investigate COMP360 psilocybin treatment in clinical and pre-clinical trials. A further $1.8 million and $0.4 million were attributable to personnel expenses and non-cash share-based compensation respectively, due to increased headcount. Other expenses decreased by $1.0 million, which primarily related to a decrease in external consulting expenses.
- R&D expenses were $38.9 million for the six months ended 30 June 2023, compared with $31.3 million during the same period in 2022. Of this increase, $4.1 million related to an increase in external development expenses as we continue to investigate COMP360 psilocybin treatment in clinical and pre-clinical trials. A further $3.0 million and $0.8 million were attributable to personnel expenses and non-cash share-based compensation respectively, due to increased headcount. Other expenses decreased by $0.3 million, which primarily related to a decrease in external consulting expenses.
- General and administrative (G&A) expenses were $12.8 million for the three months ended 30 June 2023, compared with $11.3 million during the same period in 2022. The increase was attributable to an increase of $1.0 million and $0.5 million in non-cash share-based compensation and personnel expenses respectively, due to increased headcount. There was a further increase of less than $0.1 million in facilities and other expenses and a decrease of $0.1 million in legal and professional fees.
- G&A expenses were $25.6 million for the six months ended 30 June 2023, compared with $21.4 million during the same period in 2022. The increase was attributable to an increase of $2.8 million and $1.5 million in personnel expenses and non-cash share-based compensation respectively, due to increased headcount. There was a further increase of $0.9 million in facilities and other expenses and a decrease of $1.0 million in legal and professional fees.
Financial Guidance
Third quarter 2023 net cash (provided by)/used in operating activities is expected to be in the range of ($2 million) to $18 million. This range includes the amount receivable in respect of the R&D tax credit in the UK, the timing for which is uncertain. We expect the full-year 2023 net cash used in operating activities to be in the range of $80 million to $90 million.
Conference call
The COMPASS Pathways management team will host a conference call at 8.00am ET (1:00pm UK) on August [3], 2023.
Please register in advance here to access the call and obtain a local or toll-free phone number and personal pin.
A live webcast of the call will be available on COMPASS Pathway’s website at: Second Quarter 2023 Financial Results. The webcast will also be available on the Investors section of the COMPASS Pathways website. The webcast will be archived for 30 days. The call will also be webcast on the COMPASS Pathways website and archived for 30 days. For more information, please visit the COMPASS Pathways website (ir.compasspathways.com).
About COMPASS Pathways
COMPASS Pathways plc is a mental health care 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 treatment, 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 COMP 360 psilocybin treatment in TRD, the largest randomised, controlled, double-blind psilocybin treatment 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 high dose of COMP360 psilocybin with psychological support. We are also conducting phase 2 clinical studies of COMP360 psilocybin treatment 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.
COMPASS PATHWAYS PLC
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share amounts)
(expressed in U.S. Dollars, unless otherwise stated)
| June 30, | December 31, | ||
| 2023 | 2022 | ||
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | $148,234 | $143,206 | |
| Restricted cash | 251 | 175 | |
| Prepaid income tax | — | 575 | |
| Prepaid expenses and other current assets | 45,116 | 47,695 | |
| Total current assets | 193,601 | 191,651 | |
| NON-CURRENT ASSETS: | |||
| Investment | 469 | 469 | |
| Property and equipment, net | 482 | 617 | |
| Operating lease right-of-use assets | 4,784 | 2,006 | |
| Deferred tax assets | 3,054 | 2,224 | |
| Long-term prepaid expenses and other assets | 7,444 | 327 | |
| Total assets | $209,834 | $197,294 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| CURRENT LIABILITIES: | |||
| Accounts payable | $1,982 | $4,761 | |
| Accrued expenses and other liabilities | 8,617 | 9,325 | |
| Operating lease liabilities – current | 2,176 | 1,510 | |
| Total current liabilities | 12,775 | 15,596 | |
| NON-CURRENT LIABILITIES | |||
| Long-term debt | 28,124 | — | |
| Operating lease liabilities – non-current | 2,539 | 418 | |
| Total liabilities | $43,438 | $16,014 | |
| SHAREHOLDERS’ EQUITY: | |||
| Ordinary shares, £0.008 par value; 45,760,250 and 42,631,794 shares authorized, issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 471 | 440 | |
| Deferred shares, £21,921.504 par value; nil and one share authorized, issued and outstanding at June 30, 2023 and December 31, 2022, respectively | — | 28 | |
| Additional paid-in capital | 496,342 | 458,825 | |
| Accumulated other comprehensive (loss) | (16,728) | (16,867) | |
| Accumulated deficit | (313,689) | (261,146) | |
| Total shareholders’ equity | 166,396 | 181,280 | |
| Total liabilities and shareholders’ equity | $209,834 | $197,294 | |
COMPASS PATHWAYS PLC
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
(in thousands, except share and per share amounts)
(expressed in U.S. Dollars, unless otherwise stated)
| Three months ended | Six months ended | ||||||
| June 30, | June 30, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| OPERATING EXPENSES: | |||||||
| Research and development | $19,818 | $15,920 | $38,853 | $31,282 | |||
| General and administrative | 12,846 | 11,336 | 25,599 | 21,394 | |||
| Total operating expenses | 32,664 | 27,256 | 64,452 | 52,676 | |||
| LOSS FROM OPERATIONS: | (32,664) | (27,256) | (64,452) | (52,676) | |||
| OTHER INCOME, NET: | |||||||
| Other income, net | 627 | 240 | 1,336 | 374 | |||
| Foreign exchange gains | 1,376 | 1,958 | 4,061 | 3,291 | |||
| Benefit from R&D tax credit | 2,520 | 4,077 | 6,836 | 6,999 | |||
| Total other income, net | 4,523 | 6,275 | 12,233 | 10,664 | |||
| Loss before income taxes | (28,141) | (20,981) | (52,219) | (42,012) | |||
| Income tax expense | (194) | (56) | (324) | (196) | |||
| Net loss | (28,335) | (21,037) | (52,543) | (42,208) | |||
| Other comprehensive (loss) income: | |||||||
| Foreign exchange translation adjustment | 717 | (17,134) | 139 | (24,327) | |||
| Comprehensive loss | (27,618) | (38,171) | (52,404) | (66,535) | |||
| Net loss per share attributable to ordinary shareholders—basic and diluted | $(0.62) | $(0.50) | $(1.19) | $(1.00) | |||
| Weighted average ordinary shares outstanding—basic and diluted | 45,565,991 | 42,474,987 | 44,153,772 | 42,110,161 | |||