Compass Pathways Announces Fourth Quarter 2023 Financial Results and Business Highlights
- None.
- Increase in net loss for 2023 compared to 2022
- Significant rise in R&D expenses for 2023
- Decrease in cash position from Q4 2022 to Q4 2023
- Net cash used in operating activities expected to be substantial in Q1 2024
Insights
The financial results reported by Compass Pathways indicate a substantial increase in net loss year-over-year, escalating from $91.5 million to $118.5 million. This uptick is coupled with a rise in both R&D and G&A expenses. Notably, the R&D expenses, which soared due to the progression of clinical trials and preclinical studies for COMP360 psilocybin treatment, reflect the company's commitment to innovation in mental health treatments. The additional cash raised in Q1 2024, amounting to $31.4 million, alongside a robust cash position of $220.2 million, suggests a strong liquidity status that could support operations into late 2025 as projected by the company.
However, investors should consider the potential implications of the reported enrollment delays in the COMP005 trial, which could affect the trial's timeline and, by extension, the time-to-market for the treatment if approved. Additionally, the long-term debt introduced in 2023 signals a shift in the company's capital structure, which stakeholders should monitor for its impact on financial health and cost of capital.
Compass Pathways' ongoing phase 3 trials for COMP360 in treatment-resistant depression (TRD) represent a significant advancement in the field of mental health. The trials' design, including a long-term outcomes component, is critical for understanding the durability of the treatment's effects and the potential need for retreatment. The phase 2 study results for post-traumatic stress disorder (PTSD) and the publication in JAMA Psychiatry for bipolar II depression treatment indicate a promising therapeutic profile for COMP360.
From a research perspective, the collaborations with mental health providers to develop commercial delivery models are indicative of a proactive approach to commercialization, pending FDA approval. The impact of these developments on the mental health treatment landscape could be transformative, particularly for conditions with limited effective treatments currently available.
The strategic update provided by Compass Pathways underscores the company's focus on addressing unmet needs in the mental health sector, potentially positioning it as a pioneer in the field of psychedelic-assisted therapy. The market's reception to innovative treatments such as COMP360 will rely heavily on clinical outcomes, regulatory approval and the scalability of delivery models. The latter is particularly important in determining the commercial viability and accessibility of the treatment.
Given the current mental healthcare trends and the increasing demand for novel and effective treatments, Compass Pathways' efforts could capture significant market share and generate substantial revenue streams, should clinical trials conclude successfully and regulatory approvals be granted. Stakeholders should closely observe the outcomes of the upcoming data readouts, as they will be instrumental in shaping the company's market potential and investor sentiment.
LONDON, Feb. 29, 2024 (GLOBE NEWSWIRE) --
Highlights:
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Compass Pathways plc (Nasdaq: CMPS) (“Compass”), a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health, today reported its financial results for the fourth quarter 2023 and provided an update on recent progress across its business.
Kabir Nath, Chief Executive Officer, said, “We continue to progress our two phase 3 trials of COMP360 in treatment-resistant depression with top-line data expected this year and next. While our overall Phase 3 trial completion remains on track with the ‘006 study expected in mid-2025, we are experiencing some enrollment delays in the ‘005 trial, resulting in a slight delay to our guidance for that trial. In parallel, we are actively preparing for commercialization and have commenced a number of collaborations with mental health providers in the US to understand the patient care experience and to investigate models for the delivery of scalable COMP360 psilocybin treatment within various care settings, if approved by the FDA. We are also excited to provide a full data set from our phase 2 study in individuals living with post-traumatic stress disorder this Spring after an initial safety data readout late last year.”
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, top-line data expected in fourth quarter 2024
- Pivotal trial 2 (COMP 006): fixed repeat dose monotherapy, n=568, top-line data expected in mid-2025
- Long-term follow-up in each trial will generate data on duration of response and potential effect of retreatment
Additional COMP360 development activities:
- Research collaborations with Greenbrook TMS and Hackensack Meridian Health launched to explore and develop multiple potential commercial delivery templates for COMP360 psilocybin treatment if approved
- Phase 2 study in patients with post-traumatic stress disorder (PTSD) initial safety data reported, COMP360 well tolerated, full data set expected in Spring 2024
- Phase 2 study in anorexia nervosa ongoing
- Publication of results of COMP360 treatment in bipolar II depression published in JAMA Psychiatry showing a significant number of patients experience relief from their bipolar II depression symptoms after a single 25mg dose of COMP360 psilocybin treatment
Leadership Update
- Teri Loxam to start as Chief Financial Officer on March 1, 2024
Financial highlights
- Net loss for the year ended December 31, 2023, was
$118.5 million , or$2.32 loss per share (including non-cash share-based compensation expense of$17.3 million ), compared with$91.5 million , or$2.16 loss per share, during the same period in 2022 (including non-cash-share-based compensation expense of$13.1 million ). - Net loss for the three months ended December 31, 2023, was
$32.5 million , or$0.53 loss per share (including non-cash share-based compensation expense of$4.2 million ), compared with$30.9 million , or$0.73 loss per share, during the same period in 2022 (including non-cash-share-based compensation expense of$3.3 million ). - Research and development (R&D) expenses were
$87.5 million for the year ended December 31, 2023, compared with$65.1 million during the same period in 2022. Of this increase,$14.0 million related to an increase in external development expenses as we continue to investigate COMP360 psilocybin treatment in clinical trials and preclinical studies. A further$6.9 million and$1.6 million were attributable to personnel expenses and non-cash share-based compensation respectively, to support the expansion of the digital, preclinical and clinical teams in late 2022 and 2023. Other expenses increased by$0.1 million . - R&D expenses were
$27.1 million for the three months ended December 31, 2023, compared with$19.8 million during the same period in 2022. Of this increase,$3.6 million related to an increase in external development expenses as we continue to investigate COMP360 psilocybin treatment in clinical trials and preclinical studies. A further$2.1 million was attributable to personnel expenses due to increased headcount. Other expenses increased by$1.2 million , which primarily related to an increase in external consulting fees and non-cash share-based compensation increased by$0.4 million . - General and administrative (G&A) expenses were
$49.4 million for the year ended December 31, 2023, compared with$45.4 million during the same period in 2022. The increase was partially attributable to an increase of$2.6 million in non-cash share-based compensation, with a further increase of$2.0 million and$1.0 million in facilities and other expenses and personnel expenses respectively. The increases were partially offset by a decrease of$1.6 million in legal and professional fees. - G&A expenses were
$11.3 million for the three months ended December 31, 2023, compared with$12.4 million during the same period in 2022. This was attributable to a decrease of$1.5 million in personnel expenses, partially offset by an increase of$0.5 million in non-cash share-based compensation. There was a further decrease of$0.1 million in legal and professional fees. - Cash and cash equivalents were
$220.2 million as of December 31, 2023, compared with$143.2 million as of December 31, 2022 - Long term debt was
$28.8 million as of December 31, 2023, compared with$0 million as of December 31, 2022 - Additional
$31.4 million net cash raised to date in first quarter of 2024
Financial Guidance
First quarter 2024 net cash used in operating activities is expected to be in the range of
Conference call
The Compass Pathways management team will host a conference call at 8.00am ET (1:00pm UK) on February 29, 2024.
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: Fourth 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 (Nasdaq: CMPS) 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. Our vision is a world of mental wellbeing. www.compasspathways.com
Availability of other information about COMPASS Pathways
Investors and others should note that we communicate with our investors and the public using our website (www.compasspathways.com), our investor relations website (ir.compasspathways.com), and on social media (LinkedIn), including but not limited to investor presentations and investor fact sheets, US Securities and Exchange Commission filings, press releases, public conference calls and webcasts. The information that we post on these channels and websites could be deemed to be material information. As a result, we encourage investors, the media, and others interested in us to review the information that is posted on these channels, including the investor relations website, on a regular basis. This list of channels may be updated from time to time on our investor relations website and may include additional social media channels. The contents of our website or these channels, or any other website that may be accessed from our website or these channels, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933.
Forward-looking statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. In some cases, forward-looking statements can be identified by terminology such as “may”, “might”, “will”, “could”, “would”, “should”, “expect”, “intend”, “plan”, “objective”, “anticipate”, “believe”, “contemplate”, “estimate”, “predict”, “potential”, “continue” and “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements include express or implied statements relating to, among other things, COMPASS’s financial guidance, Compass’s business strategy and goals, its expectations and projections about the company’s future cash needs and financial results, the anticipated proceeds to be received from the pending exercise of warrants issued in the private placement and future exercises, if any, of remaining warrants issued in the private placement; Compass’s plans and expectations regarding its phase 3 trials in TRD, including its expectations that the phase 3 pivotal program is on track and the time periods during which the results of the two Phase 3 trials will become available, the potential for these phase 3 trials or other trials to support regulatory filings and approvals, the safety or efficacy of its investigational COMP360 psilocybin treatment, including for treatment of TRD, PTSD, anorexia nervosa, and bipolar II depression, Compass’s expectations regarding its ongoing preclinical work and clinical trials, development efforts and innovation labs and Compass’s plans, expectations and ability to achieve its goals related to the research collaboration agreements with Greenbrook TMS and Hackensack Meridian Health. The forward-looking statements in this press release are neither promises nor guarantees, and you should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, many of which are beyond Compass’s control and which could cause actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements.
These risks, uncertainties, and other factors include, among others: we will require substantial additional funding to achieve our business goals, including to repay the term loan facility, and if we are unable to obtain this funding when needed and on acceptable terms, we could be forced to delay, limit or terminate our product development efforts; the availability of future tranches under the term loan facility is dependent, in part, on the approval of the lender, achievement of certain milestones and other factors; the risk that the pending warrant exercises for approximately
Enquiries
Media: Amy Lawrence, amy@compasspathways.com, +44 7813 777 919
Investors: Stephen Schultz, stephen.schultz@compasspathways.com, +1 401 290 7324
COMPASS PATHWAYS PLC
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(expressed in U.S. Dollars, unless otherwise stated)
| December 31, | |||
| 2023 | 2022 | ||
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | $ 220,198 | $ 143,206 | |
| Restricted cash | 440 | 175 | |
| Prepaid income tax | 1,123 | 575 | |
| Prepaid expenses and other current assets | 39,535 | 47,695 | |
| Total current assets | 261,296 | 191,651 | |
| NON-CURRENT ASSETS: | |||
| Operating lease right-of-use assets | 4,306 | 2,006 | |
| Deferred tax assets | 3,336 | 2,224 | |
| Long-term prepaid expenses and other assets | 7,049 | 1,413 | |
| Total assets | $ 275,987 | $ 197,294 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| CURRENT LIABILITIES: | |||
| Accounts payable | $ 5,892 | $ 4,761 | |
| Accrued expenses and other liabilities | 11,301 | 9,325 | |
| Operating lease liabilities - current | 2,411 | 1,510 | |
| Total current liabilities | 19,604 | 15,596 | |
| NON-CURRENT LIABILITIES | |||
| Long-term debt | 28,757 | — | |
| Operating lease liabilities - non-current | 1,882 | 418 | |
| Total liabilities | 50,243 | 16,014 | |
| SHAREHOLDERS' EQUITY: | |||
| Ordinary shares, | 635 | 440 | |
| Deferred shares, | — | 28 | |
| Additional paid-in capital | 621,645 | 458,825 | |
| Accumulated other comprehensive loss | (16,926) | (16,867) | |
| Accumulated deficit | (379,610) | (261,146) | |
| Total shareholders' equity | 225,744 | 181,280 | |
| Total liabilities and shareholders' equity | $ 275,987 | $ 197,294 | |
COMPASS PATHWAYS PLC
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
(expressed in U.S. Dollars, unless otherwise stated)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
| OPERATING EXPENSES: | |||||||
| Research and development | $ 27,139 | $ 19,794 | $ 87,518 | $ 65,053 | |||
| General and administrative | 11,266 | 12,397 | 49,401 | 45,350 | |||
| Total operating expenses | 38,405 | 32,191 | 136,919 | 110,403 | |||
| LOSS FROM OPERATIONS: | (38,405) | (32,191) | (136,919) | (110,403) | |||
| OTHER INCOME (EXPENSE), NET: | |||||||
| Other income | 2,415 | 481 | 4,878 | 4,061 | |||
| Interest expense | (1,124) | — | (2,204) | — | |||
| Foreign exchange gains | 1,622 | (3,566) | 3,686 | 821 | |||
| Benefit from R&D tax credit | 3,354 | 4,442 | 12,875 | 14,424 | |||
| Total other income, net | 6,267 | 1,357 | 19,235 | 19,306 | |||
| Loss before income taxes | (32,138) | (30,834) | (117,684) | (91,097) | |||
| Income tax expense | (394) | (92) | (780) | (408) | |||
| Net loss | (32,532) | (30,926) | (118,464) | (91,505) | |||
| Net loss per share attributable to ordinary shareholders—basic and diluted | $ (0.53) | $ (0.73) | $ (2.32) | $ (2.16) | |||
| Weighted average ordinary shares outstanding—basic and diluted | 61,961,674 | 42,436,292 | 51,028,024 | 42,436,292 | |||
| Net loss | (32,532) | (30,926) | (118,464) | (91,505) | |||
| Other comprehensive loss: | |||||||
| Foreign exchange translation adjustment | 540 | 13,776 | (59) | (25,707) | |||
| Comprehensive loss | (31,992) | (17,150) | (118,523) | (117,212) | |||
FAQ
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