By Rachael Green, Benzinga
In August, a group of well-known biotech institutional investors participated in an up to almost $300 million financing round for COMPASS Pathways (NASDAQ: CMPS), consisting of an initial investment of $125 million and the potential for an additional investment of up to $160 million if the warrants are fully exercised for cash. This will aim to support the phase 3 trials in treatment-resistant depression (TRD) and phase 2 programs in anorexia nervosa and PTSD. The news seems like a major tailwind for COMPASS, which sits at the forefront of an emerging psychedelics market growing at an estimated 13.49% compound annual rate and anticipated to balloon from a market cap of $4.87 billion in 2022 to $11.82 billion in 2029.
This also marks a major shift in how psychedelic drug development is funded, with more traditional investors eying this novel area of science that has the potential to address large, unmet needs in mental health care and doing so through the traditional regulatory pathway that would require FDA approval.
This financing comes on the heels of additional validation for COMPASS when, in May, the U.S. Patent Trial and Appeal Board (the PTAB) upheld two key patents covering COMP360 crystalline psilocybin polymorph A, the polymorph being used by COMPASS in their phase 3 clinical trials for treatment-resistant depression (TRD). Last summer the PTAB denied the institution of post-grant reviews, finding that the challenger failed to establish that the claims in the patents were unpatentable, and in May the PTAB rejected requests for rehearing of these decisions.
The Need For Better Options To Combat Mental Health Crisis Spurs Psychedelics Market Momentum
Once a relatively fringe area of research, studies involving psychedelics are gradually becoming more common as data continues to reinforce the therapeutic potential of psilocybin, LSD, MDMA and other psychoactive compounds.
At the same time, the global mental health crisis has gained increasing attention as the pandemic exacerbated the existing problem and made the need for more diverse treatment options apparent. According to the World Health Organization (WHO), an estimated 26% and 28% of the global population live with anxiety and depression, respectively. Meanwhile, 40 million people have bipolar disorder, 24 million have schizophrenia, and 14 million have an eating disorder.
During the pandemic, the crisis reached a tipping point as the number of people contemplating suicide doubled, and the number of suicide attempts increased. The antidepressants, mood stabilizers and antipsychotics currently available do provide relief for some, but many people must first go through a period of trial and error with different medications before they find the right one and the right dosage. But for some patients including one-third of patients living with treatment-resistant depression the right medication doesnt yet exist.
Growing awareness of that reality has made both regulators and researchers more open to exploring the potential of psychedelics. In fact, in June the FDA issued guidance on developing psychedelic medicines. Early results so far are encouraging and have brought new hope to the millions of people around the world struggling with mental illness.
Psilocybin has been shown in clinical trials to improve mood, reduce anxiety and lower depression symptoms. In COMPASS's phase 2b trial in treatment-resistant depression (TRD), 30% of patients achieved remission by the third week after taking just one 25-milligram dose of COMP360 psilocybin with psychological support at the start of the trial. At the 12-week follow-up, over 20% of patients were still in remission.
Compass Pathways Carves Out A Path For Novel Psilocybin Treatment
Compasss research is focused on psilocybin. Its patented, investigational COMP360 is a synthetic formulation of the psychoactive compound found in psilocybin mushrooms, commonly known as magic mushrooms. But for COMPASS, its not just about developing a novel psychedelic treatment but ensuring that the market infrastructure and regulatory framework exist for any new FDA-approved treatment to reach the patients who need it.
To that end, COMPASS has been working on advancing research and laying the groundwork to ensure its COMP360 psilocybin treatment, if approved by regulatory authorities, can be integrated fully and effectively into existing health systems.
One of the most recent milestones achieved through that collaborative approach is the addition of new Current Procedural Terminology III (CPT) codes for psychological support during the administration of psychedelic therapies. Taking effect in January 2024, the new CPT codes give healthcare providers a way to document these treatments in medical records and seek reimbursement from payers for psychological support during the administration of any FDA-approved treatment.
Topline data from Compasss first phase 3 trial for treatment-resistant depression is expected in the summer of 2024. A second phase 3 trial for TRD evaluating an alternate dosing regimen for the psilocybin treatment where a second dose is administered in the third week is expected to read out topline data in mid-2025.
While its TRD program is the furthest along in the clinical trial process, Compass also has clinical and preclinical programs to evaluate COMP360 as a treatment for anorexia and PTSD, as well as other novel compounds that could treat a variety of mental health conditions. There are also a number of investigator-initiated trials using investigational COMP360 for conditions ranging from major depressive disorder to obsessive-compulsive disorder as well.
Company BioCOMPASS 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 therapy, 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 therapy in TRD, the largest randomised, controlled, double-blind psilocybin therapy 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 therapy 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.
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