Sunday , 2 April 2023

Compass Pathways: 12 Analysts Forecast A 312% Increase Within 12 Months

This article looks at what neurological diseases Compass Pathways (CMPS) is focused on, its clinical trial progress to date, its latest quarterly financials, the history of its stock price performance, and the price forecasts for the stock over the next 12 months.

An original article by Lorimer Wilson, Managing Editor of, Your KEY To Making Money!

About Compass Pathways

Compass Pathways, a clinical-stage mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health and has a market capitalization of $363M.

Research and Development Pipeline

  • The COMP360 phase 3 pivotal program regarding treatment-resistant depression (TRD) is the first ever phase 3 trials of psilocybin, and is composed of two pivotal trials with an integrated long-term outcomes component that the Company believes should generate the evidence to support a regulatory filing and to support broad patient access through integration into healthcare systems.
    • Pivotal trial 1 (COMP 005) is a single dose monotherapy with top line data expected summer 2024
    • Pivotal trial 2 (COMP 006) is a fixed repeat dose monotherapy with top line data expected mid-2025
    • Previous phase 2b results can be found in this infographic.
  • Phase 2 trials are ongoing with data from investigator-initiated studies (studies in collaboration with select academic institutions and researchers around the world) in:
    • Type 2 bipolar disorder showing that treatment was well tolerated with 12 of 14 patients in remission at three months following a single 25 milligram administration of COMP 360 psilocybin therapy, and no subject having manic or hypomanic symptoms or an increase in suicidal ideation;
    • Anorexia nervosa (AN) showing that treatment was well tolerated with 6 of 10 participants in remission from Eating Disorder Psychopathology following a single 25 milligram administration of COMP 360 and 9 of 10 participants endorsing the experience as meaningful and therapeutic. According to Compass Pathways:
      • AN is an eating disorder characterized by weight loss or difficulties maintaining a healthy body weight, usually associated with distorted body image. People with AN generally restrict their caloric intake, types of food they eat, and might engage in purging;
      • 3.9M people suffer with AN with a lifetime prevalence up to 4% in females;
      • AN is the deadliest of psychiatric disorders with 20% of deaths due to suicide;
      • AN has no pharmacological treatments approved and psychological treatments have
        relapse rates as high as 52% and
    • is in Phase II clinical trials for the treatment of Post-Traumatic Stress Disorder (PTSD).  According to Compass Pathways:
      • PTSD can occur in people who have experienced or witnessed a traumatic event (eg, natural disaster, serious accident, war, rape) with some people experiencing symptoms from immediately after the event while for others symptoms may appear years later;
      • will be experienced by 311M worldwide at some point in their lives; and
      • 20-30% of patients treated with currently approved pharmacological interventions will reach full remission.

Please refer to Compass’ 29 slide presentation entitled “Transforming Mental Health Care”, for more detailed information.

Q4 Financial Highlights

The Company is still in the product research and development of novel compounds and, as such, has no products and has no revenue, and requires a great deal of money to fund its R&D expenses. Cash, cash equivalents and marketable securities were $143.2 million as of December 31, 2022, which, given its projected annual burn rate of $85M to $110M, suggests that the Company will have sufficient financial resources to meet its operating expenses and capital expenditure requirements for the next year to 18 months without additional financing. For a detailed look at all the financial metrics related to CMPS in the last quarter, and for every year going back to 2018, go here.

Stock Price Performance

CMPS’s IPO back on September 17th, 2020 was at $17.00, peaked at $59.20 on December 23rd and ended 2020 at $47.64. By the end of 2021 its stock had dropped 53.6% to $22.10 and by a further 64.7% by the end of 2022. As bad as that was, the 2022 decline was much “better” than the 72.0% decline experienced by the other 5 major clinical-stage psychedelic stocks in the munKNEE Psychedelic Drug Stocks Index.

Analyst Forecasts

Based on 12 Wall Street analysts (see here) offering 12 month price targets for COMPASS Pathways in the last 3 months the average price target is $41.55 with a high forecast of $120.00 and a low forecast of $19.00. The average price target represents a +312% change from its closing price on March 24th, 2023.

Risks and Offsets

The company reports that its cash position at the end of Q4, 2022, of US$143.2M is anticipated to provide a cash runway into 2024. That being said, however,

  • were CMPS to experience a major setback in its research programs,
    • that might cause investors to lose confidence in the eventual success of the company and such negative sentiment could negatively impact its stock price;
  • were another company to develop a treatment for any one of the diseases it is focused on before CMPS,
    • that would most likely negatively impact the stock price, as well and, even more so, if such a competitor were to take the treatment for one of those diseases to market; and
  • were one or more of senior management to depart,
    • that might cause the company to lose focus which would slow down the progress of its research and development.

An article by “Out of Ignorance” has concluded that: “Compass is entering a brave new world. It is doing so with limited resources. If all goes well it will be heralded as genius. If it stumbles it has little backup to cover its flank.” I second that remark.

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