CMPS - Compass Pathways: Psilocybin Developer A Potentially Intriguing Contrarian Play

2024-02-08 17:15:08 ET

Summary

• Compass Pathways plc, a biotech company based in London, is developing a psilocybin-based therapy for CNS disorders.
• The company's shares declined by over 80% in 2022 due to safety concerns and regulatory hurdles.
• Psilocybin is classified as a Schedule I substance in the U.S., posing challenges for commercial marketing in the country.
• Compass' COMP-360 therapy involves sessions with therapists and digital support, and has met efficacy endpoints in a Phase 2 study.
• There are multiple reasons to doubt the therapy can be approved, and Compass has a high cash burn, but Phase 3 data due this year may support an approval push, if positive. An interesting contrarian play, for those with a higher appetite for risk.

Investment Overview

I last updated on Compass Pathways plc ( CMPS ) - the London, United Kingdom based biotech attempting to develop a psilocybin-based therapy to treat central nervous system ((CNS)) disorders such as treatment resistant depression ((TRD)), anorexia nervosa, and post traumatic stress disorder - in a note for Seeking Alpha back in October 2022. At that time, Compass shares had declined in value by >80% year-on-year....

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