COMPASS Pathways - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 was a de‑risking quarter financially (cash to $260.1M) and operationally (COMP005 Part A dosing complete) ahead of late‑June topline 6‑week data in TRD; management reiterated COMP006 26‑week data in H2 2026.
• EPS modestly beat S&P Global consensus on a primary/normalized basis, aided by a $19.5M non‑cash gain from warrant revaluation and higher R&D tax credit; IFRS basic/diluted loss per ADS improved sharply YoY/QoQ despite higher G&A tied to financing. EPS (Primary, S&P): consensus −$0.49 vs actual −$0.42*; IFRS EPS: basic −$0.20, diluted −$0.24.
• FY2025 net cash used in operations guidance maintained at $120–$145M; runway extended through COMP006 26‑week readout (H2 2026) following January financing.
• Near‑term catalyst: COMP005 6‑week MADRS delta, p‑value, and CI in late June; DSMB to provide suicidality imbalance comment given ongoing 26‑week blinding, a focal narrative driver for the stock.

What Went Well and What Went Wrong

What Went Well

• Cash runway strengthened: cash and equivalents rose to $260.1M (Mar 31) after Q1 financing, with CFO citing funding through COMP006 26‑week (H2 2026).
• Clinical execution milestone: COMP005 Part A dosing completed; topline 6‑week results on track for late June; CEO: “We eagerly await the upcoming topline 6‑week data readout… the first data from our pivotal phase 3 COMP360 program in treatment resistant depression”.
• Non‑cash tailwinds: $19.5M gain from fair value change of warrants and higher R&D tax credit ($8.4M) reduced net loss YoY and QoQ.

What Went Wrong

• Operating spend still elevated: total OpEx increased to $49.6M (vs $38.6M YoY; +28%), with G&A up to $18.7M due to financing and professional fees.
• Underlying operating loss widened: loss from operations was $(49.6)M vs $(38.6)M YoY, reflecting continued Phase 3 investment despite R&D down modestly QoQ.
• Persistent investor concerns: placebo variability and suicidality signal debated in Q&A; management set expectations that a MADRS delta >3 would be clinically significant and DSMB will provide qualitative suicidality assessment.

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by, and welcome to the COMPASS Pathways First Quarter 2025 Earnings Call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question-and-answer session. If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Steve Schultz, Senior Vice President of Investor Relations. You may now begin, sir.

Steve Schultz (SVP of Investor Relations)

Welcome all of you, and thank you for joining us today for our first quarter 2025 results conference call. Again, my name is Steve Schultz, Senior Vice President of Investor Relations at COMPASS Pathways. Today, I'm joined by Kabir Nath, our Chief Executive Officer, and Teri Loxam, our Chief Financial Officer, who will have prepared remarks. In addition, Dr. Guy Goodwin, our Chief Medical Officer, and Dr. Steve Levine, our Chief Patient Officer, will be available for the Q&A. The call is being recorded and will be available on the COMPASS Pathways Investor Relations website shortly after the conclusion of the call and will be available for a period of 30 days. Before we begin, we remind everyone that during the call today, the team will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended.

You should not place undue reliance on these forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties, and other factors, including those risks and uncertainties described under the heading risk factors in our most recent quarterly report on Form 10-Q, filed with the US Securities and Exchange Commission, and in subsequent filings made by COMPASS Pathways with the SEC. Additionally, these forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statement, even if our estimates or assumptions change. I will now hand the call over to Kabir Nath.

Kabir Nath (CEO)

Thank you, Steve. Good day, everyone, and thank you for joining us. Recently, we announced the completion of dosing of all participants in Part A of our 005 trial, the first of two pivotal phase III trials, which marks an important milestone in our mission to address the pressing unmet need in treatment-resistant depression, or TRD. We look forward to sharing the six-week top-line results in late June. As we've guided before, these results will include three key efficacy measures for the six-week primary endpoint: the difference between the treatment arm and the placebo arm in change from baseline on MADRS, the associated p-value, and confidence interval. A positive treatment effect at six weeks based on a single dose of COMP360 would represent a meaningful improvement in durability compared with the very limited options available to TRD patients today.

From a safety standpoint, the independent DSMB reviews unblinded safety data on a regular basis and has been doing so since the trial started. Since the trial remains blinded through 26 weeks, we have requested the DSMB to provide a comment on suicidality. We believe that these data, if positive, should provide investors with further clinical validation of COMP360's treatment potential in TRD. The second phase 3 trial, COMP006, which has three active arms, could further define the COMP360 profile with data on a second initial treatment, which we believe could potentially extend durability or deepen response. Enrollment is going well in 006, and I'll remind you that that is a global trial, and we're on track for the 26-week results in the second half of 2026.

Also, during this quarter, 52-week safety and efficacy data from the COMP004 study was published in the Journal of Clinical Psychology. This was an observational 52-week follow-up from the phase 2b, 001, and 003 trials of COMP360 psilocybin treatment in 252 patients with TRD. This study showed that for the full patient population, a single 25 milligram COMP360 psilocybin dose offered long-term benefits with an average time to depressive event of over 12 weeks. A post-hoc analysis of the subset of 58 participants that continued in the long-term follow-up study showed time to depressive event for those patients treated with 25 mg was substantially longer at 189 days.

While there may be some responder bias associated with this subgroup, this is impressive data in a difficult-to-treat and highly refractory patient population, and we believe shows the potential of COMP360 to be a clinically differentiated treatment that is both rapid-acting and with meaningful durability. The phase III program is designed to confirm the durability and safety profile, which, if successful and approved, could be a groundbreaking option for individuals who suffer from TRD. In addition, as we plan for the commercialization of COMP360, we've been working to ensure that we understand the commercial opportunity, initially by focusing on how COMP360 will be delivered in a broad spectrum of settings of care. One way we are achieving this is through developing relationships with various provider types through our strategic collaborations, which we previously discussed.

In line with this, we announced an additional strategic collaboration this quarter with HealthPort. HealthPort is a community health center that serves low-income individuals and is focused on providing broad and equitable access to innovative mental health treatments, which could potentially include COMP360 if approved by the FDA. HealthPort is our first collaboration that is focused on community-based delivery to underserved patient populations. Beyond this, our efforts with our existing collaborations are generating considerable value. We have gained deep insights into the patient experience and care pathways for those living with TRD within high-volume interventional psychiatry practices, hospital systems, and integrated delivery networks. We've strengthened our understanding of the clinical, operational, economic, and administrative considerations of implementing and scaling analogous interventional psychiatry treatments such as Spravato. This enables us to understand and prepare for the launch and adoption of COMP360 if approved.

We are building a strong appreciation of how training and continuing education is being delivered and how best to integrate COMP360 in the post-approval setting. These are just a few of the many examples of meaningful insights that we are using to inform our strategy for launch and post-launch scaling. Now, let me turn the call to Teri.

Teri Loxam (CFO)

Thank you, Kabir. After our January financing, we are in a very strong financial position. At the end of March, we had cash and cash equivalents of $260 million, which we expect to fund our operations at least through the planned 26-week data readout from our second phase 3 trial, COMP006, which is expected in the second half of 2026. This compares with $165 million at the end of 2024. Debt under the Hercules loan facility was $30.5 million at the end of the first quarter. Cash used in operations for the first quarter was $45.7 million, and we expect net cash used in operations for the full year 2025 to be within the range of $120 million -$145 million. Again, as Kabir said earlier, we eagerly await the results of our first phase III data, as we know you're waiting for it as well.

As a reminder, this is the first of three expected data readouts from this program over the next 18 months. Based on our data to date, including the recent 52-week follow-up data from our Phase II-B trial, we believe COMP360 could represent a clinically differentiated treatment option that is rapid-acting with the potential for paradigm-changing durability. We also continue to work toward a final design for our late-stage clinical program in PTSD and look forward to updating investors when that design is finalized. Given the high unmet need and limited current treatment options, we see a significant commercial opportunity in PTSD. With that, we're going to move to Q&A. As a reminder, Dr. Guy Goodwin and Dr. Steve Levine are also with us today for the Q&A portion. With that, let me turn it back over to the operator.

Operator (participant)

We are now opening the floor for question-and-answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. Your first question comes from the line of Leonid Timashev of RBC Capital Markets. Your line is now open.

Hi, this is Kevin on for Leonid. Thank you for taking our questions. You recently, as you mentioned, published longer-term follow-up data from the phase 2. Maybe can you just highlight the key takeaways in your view on durability, as well as what you may have learned about which dose is most appropriate? Thank you very much.

Kabir Nath (CEO)

Thanks, Kevin. This is Kabir. Just checking that you can hear us clearly.

Yes, I can.

Great. I'll hand actually to Guy to take the lead on that then, please.

Guy Goodwin (CMO)

Yeah, I mean, hi Kevin. This data is not as complete as we would like it to have been. I’d like to start with that disclaimer, really. It’s not a definitive study, a definitive follow-up study by any means for various reasons. What it does show is a difference between the durability of the three doses. This is most clearly seen in the subgroup who completed the study. They, as we mentioned earlier, are a little unrepresentative, but nevertheless, they do demonstrate some patients who receive 25 mg can last as long as six months following treatment. That is much less likely in people who’ve received lower doses.

I think it reiterates our conclusion from the phase II study that 25 mg is, for the time being, the preferred dose that we think should carry forward and will be the one that we obviously used in the phase III program.

Thank you.

Operator (participant)

Next question comes from the line of Paul Matteis of Stifel. Your line is now open.

Paul Matteis (Analyst)

Hey, good morning. Thanks for taking my question. I appreciate it. I mean, obviously, with the top-line disclosure and your guys' conservatism around trying to not bias the 006 trial, it's going to be difficult to compare across studies, which is totally reasonable. Just as it relates to thinking about the actual efficacy delta on MADRS, one challenge in the psychedelic space is just a high degree of variability and placebo effect across trials. What is your base case? Again, the study's blinded, but what was your base case on what the placebo effect might be in this study? How might that kind of inform the way we contextualize this effect size versus what others have observed? Thank you.

Guy Goodwin (CMO)

Yeah, thank you for that question. I mean, our estimate, our guesstimate, I think you'd have to call it, was really based on what we saw in a previous study of NDD from Switzerland, which was with COMP360, and looking at our own data. Our own data obviously was from an arm which received 1 mg. So we considered whether or not patients in that population had a psychedelic experience or not, or anything approaching a psychedelic experience. And so we took account of the subgroup who seemed to us to have the lowest experience and looked at their responses in estimating what the placebo was likely to be. I think in this field, we generally expect to see in well-conducted trials a placebo response. The placebo arm does not receive nothing. They receive a great deal of attention, have frequent hospital visits.

It's construed in a very positive way by patients. You would expect a placebo response. You would expect also regression to the mean. The normal expectation is for there to be a placebo response. Obviously, the difference you see between placebo and the active arm can be attributed to the effect of the drug, which is the key thing that we're wanting to prove. As we've indicated, we would be very pleased to see effects of over three on the MADRS scale. We think that is clinically significant. Anything above that is a bonus.

Paul Matteis (Analyst)

Okay, great. If I could ask one follow-up question just on the DSMB commentary on the presence or lack of a suicidality signal. Ultimately, I guess, where do you think you guys or the DSMB might draw the line between an actual signal and noise, right? I would imagine two events versus one event could be kind of codified as noise. Is there any, I guess, to the outside looking at it, it seems like there's an art to this. There's an element of subjectivity. How should we interpret that?

Guy Goodwin (CMO)

Yeah, I mean, that is a practice of medicine question, really, because what we're asking the DSMB to do is to take a judgment that is based not just on the occurrence of an event and the relative frequencies, but also the severity, the timing, the way in which the event evolves and may, in fact, resolve. All of those factors, I think, weigh, and if I were doing the job, and I have in the past for a company, that would weigh in how I reported the likely probability that there was an imbalance in the two arms, which is what we're asking the DSMB to do. It is a nuanced judgment. It cannot be done on the basis of a scale. It can't be done on the basis of numbers.

It has to be done on the basis of a complete assessment of the picture for each of the individual instances.

Paul Matteis (Analyst)

Fair enough. Thank you very much.

Operator (participant)

Next question comes from Charles Duncan of Cantor. Your line is now open.

Charles Duncan (Analyst)

Hey, good morning, Kabir and team. Congrats on the progress. Thanks for taking the question. I wanted to ask another question about suicidality. I'm kind of wondering if back when you were designing this study, was that something that the FDA was more concerned about, or were you hearing concerns or thoughts about that from the broader, call it, investment community? What is the background rate that you were considering when conducting the study given this TRD population? Thanks.

Guy Goodwin (CMO)

Hi, Charles. Thank you. The issue of suicidality was not addressed directly or brought up by the agency in our discussions with them. Suicidality is a core feature of depression. All trials of either MDD or TRD have to include patients with some degree, either a history of suicidality or current passive suicidality. To exclude it as a factor entirely is simply to distort the population in a way that it ceases to be representative of the target population. Suicidality is a fact that everybody has to contend with in designing and executing these studies.

It arose as an issue, as you may remember, after we released the data from 001 and the fact that we had an imbalance in the number of behavioral actions related to suicidality, all of them somewhat delayed from the actual treatment, and they occurred in the 25 mg arm. That produced a good deal of commentary and seems never to have left us. We live with this, continues, and that is obviously something we remain seriously concerned about. We wish to monitor carefully in the phase III and to generate the numbers that will give us confidence about the actual potential for differences between the three arms. Our expectation is that there will not be important differences between the three arms.

Kabir Nath (CEO)

Just to build on both Guy's points together, Charles, even in the light of the 2b data, the FDA was still not concerned about the likelihood of [audio distortion] suicidality on our phase III. They fully understand that this is a core feature of the disease.

Charles Duncan (Analyst)

Makes sense. Looking forward to that data. Quick question for Steve on HealthPort in terms of that recent collaboration. I guess I'm wondering if you could characterize in any way the current delivery of esketamine or Spravato that HealthPort is involved in, if you can quantify that in any way so we get a sense of how involved they are in the field. Thanks.

Steve Levine (Chief Patient Officer)

Hi, Charles. Thanks for that question. First, just as a reminder, part of the efforts with creating this network of collaborations is for them to reflect the broad array, the spectrum of where mental health care is delivered in this country. Within the existing collaborations, we did not feel there was adequate representation of sites that served underserved populations. HealthPort is a very high-quality example of a certified community behavioral health clinic that specifically addresses the unmet needs in marginalized and underserved populations. There are some assumptions that I think are common that community-based mental health clinics are not able to deliver newer or more innovative treatments.

It is the fact that HealthPort has been able to deliver Spravato to patients, esketamine, and are highly motivated to make sure that there is not a widening of existing healthcare disparities and a lack of access for their population if new treatment options are approved. They have some experience already with interventional treatments and are excited about and motivated to be operationally ready to deliver new treatments if approved. It is important also to note that inherent within the CCBHC model, Certified Community Behavioral Health Clinics, is the sharing nationally across that system of best practices and learnings. HealthPort has also historically been a leader there, particularly with disseminating their social determinants of health model.

Charles Duncan (Analyst)

Got it. Thank you, Steve.

Steve Levine (Chief Patient Officer)

Thank you, Charles.

Operator (participant)

Your next question comes from Ritu Baral of TD Cowen. Your line is now open.

Athena Chin (Analyst)

Hi, guys. This is Athena on for Ritu Baral. Thanks for taking the question. Given the potential pharma tariffs, can you provide additional color on your manufacturing supply chain and whether there has been any FDA inspection of your manufacturing center? Thank you.

Kabir Nath (CEO)

Thanks, Athena. Yes, currently, product is manufactured in the U.K. We have always planned and are working on plans to add an additional manufacturing capability in the U.S. for commercial supply. Those plans were already underway, and we are moving on those. These are sites that have extensive experience of manufacturing, not just for us, but are very well-established CDMOs for a wide range of pharmaceutical manufacturers. We have had multiple inspections over the years.

Athena Chin (Analyst)

Do you have a timeline on the additional US sites?

Kabir Nath (CEO)

Not at this point. As I say, we are working on that. That was already in the plan and in our forecast for the next couple of years ahead of potential commercial supply.

Teri Loxam (CFO)

Yeah. Athena, it's probably worth mentioning that from a manufacturing perspective, compared to other biotechs or other pharmaceuticals, this is a pretty straightforward process and a pretty small quantity of material. It is not really at the top of our minds in terms of risks. We're mitigating any risks we have. As Kabir mentioned, as we near commercialization, that is currently the plan.

Kabir Nath (CEO)

Clearly, this is a typical small molecule. Since we haven't yet established the price, if in fact there was a tariff element on any cost of goods, we would clearly be able to consider that in setting a price in due course.

Athena Chin (Analyst)

Got it. Thank you.

Operator (participant)

Your next question comes from Delani of Vikram Purohit of Morgan Stanley. Your line is now open.

Hi, guys. Thanks for taking our question. This is [Parth] on for Vikram. Just one question. Could you provide the current mix or color of patients enrolled into COMP005? How similar or distinct is this patient profile that was enrolled in the phase II-B?

Guy Goodwin (CMO)

Essentially, the criteria for recruitment are the same. We are not continuously monitoring the actual baseline characteristics. I mean, we're remaining blind to the data, but we know that we're recruiting patients using the same criteria. There is really no reason why they would be any different.

Kabir Nath (CEO)

Yes. The only thing which we have stressed repeatedly in the phase II-B, the actual percentage with prior psychedelic experience was 6%. In the phase III, it's capped at 15%. While we don't, to Guy's point, know the exact , we can assume it is around that percentage in the 005 study.

Okay. Thank you. Just one more quickly. What are your current thoughts on BD, specifically with regards to a large pharma partnership? Is this something that you guys would be interested in? If so, when could this make sense?

Yeah. We are clear that we believe we're doing something unique. If approved, what we have is paradigm-breaking, transformational for the treatment of serious mental illness. Our commitment is to do that ourselves in the U.S. if we can, and potentially some other select geographies at the moment. From our perspective, COMPASS is set up to commercialize COMP360 if approved and to build from there. I have no particular comment on big strategic intent at this point.

Okay. Thank you.

Operator (participant)

Your next question comes from Sumant Kulkarni of Canaccord Genuity. Your line is now open.

Sumant Kulkarni (Managing Director of Biotechnology Equity Research)

Hi. Thanks for taking my question. Also, a question on suicidality risk. What do you think is an optimal time to pass before suicidality might not be attributable to a single dose of COMP360? How might you prepare for imbalances in non-responders to COMP360 because of the potential unblinding given the nature of the product?

Guy Goodwin (CMO)

Thank you, Steven. That's actually quite a tough question. I think my answer is really that we'll wait and see what the data shows us, to be honest. I don't think predictions are in order here. That's rather a poor answer to your question, but I think that's the way I feel about it.

Sumant Kulkarni (Managing Director of Biotechnology Equity Research)

Thanks. Just a quick follow-up. Have you seen any changes within the FDA for anyone that might be considered a champion of psychedelic therapeutic approaches in your interactions so far?

Kabir Nath (CEO)

Thus far, we've seen no changes in our interactions with the FDA, which in the last couple of months have been largely routine around event reporting and so on. Clearly, we're tracking like everyone else. Some of the changes higher up in the hierarchy, not only within the FDA, but higher up than that. As we've said before, we see that potentially producing some favorable tailwinds for us. At this stage, nothing has changed around our day-to-day interactions with the agency.

Sumant Kulkarni (Managing Director of Biotechnology Equity Research)

Thank you.

Operator (participant)

Your next question comes from the line of Patrick Trucchio of H.C. Wainwright. Your line is now open.

Patrick Trucchio (Managing Director of Equity Research and Senior Healthcare Analyst)

Thanks. Good morning. First, just regarding the COMP360 TRD program and the 52-week observational follow-up study, I'm wondering how we should interpret those data in the context of your pivotal program or in the potential commercialization of COMP360 in TRD, and then also in the pivotal TRD program. Is there tracking or use of antidepressants or other psychotropic medications post-dosing in the trials, and how might that inform your durability or safety analyses? Separately, I'm wondering regarding PTSD, have you initiated regulatory interactions around PTSD program design, and if so, what feedback have you received?

Kabir Nath (CEO)

Steve, do you want to comment first on the durability and how that feeds into how we think about commercialization?

Steve Levine (Chief Patient Officer)

Yeah. I'll start there. Guy may want to jump in with the other part of the question that related to the starting of other treatments and the interpretability of the data as we get further into the study, but specifically on durability and to your question about what we learned from that long-term extension that we called 004 and how we will look at durability within the phase III program. As was mentioned during the opening remarks, there were some limitations as far as the interpretability of the long-term study just because it was not the full patient population that continued. However, when looking at all 233 patients from that study included in the primary analysis, that did give a very strong signal of durability, at least to 12 weeks.

For those who did continue into the long-term extension study and were followed out to 52 weeks, response up to six months. In phase 3, of course, we'll be reporting initially the six-week data. Frankly, durability even to week six in this population, given the limited options available today, is already a shift in the paradigm that already would be of tremendous value to patients, to healthcare providers, psychiatrists, and others. We will be looking at durability, of course, beyond six weeks, wind it out to week 26, and then we'll have continued opportunity to look at durability in the open label portion from week 26 through week 52. We will have to see what we see there. Again, even with the initial data we have, durability up to six weeks would be really groundbreaking in this area.

Teri Loxam (CFO)

No. So the impact of antidepressants and.

Kabir Nath (CEO)

The use of antidepressants on the interpretation of it.

Guy Goodwin (CMO)

Yeah. I think that the key thing in practice will be that antidepressants are going to be part of the picture for the treatment of these patients. I'm not sure that really it affects the key for the patients is to remain well. We're going to see the addition of antidepressant treatments. We can look at that post-hoc within the trials, but I think in ordinary practice, we'll expect to see a lot of co-administration. We await, obviously, proper data on this, but I think you have to anticipate that they will play a part of long-term treatment in these patients.

Steve Levine (Chief Patient Officer)

Maybe worth saying that it does land a real-world element to the latter portions of these studies because that is quite common in clinical practice for patients to be on multiple treatments simultaneously, often to continue an antidepressant in the background while they're trying other options. In most cases, the reason why they're trying new treatments is because those background treatments have not been particularly effective. In some cases, it's just the comfort of being on something. As Guy said, the trial is designed for us to, particularly in the beginning of the study, differentiate and fully characterize the profile of our drug effect. It is the likelihood that patients will resume some treatments, and that will give us an opportunity to better understand what real-world practice may look like.

Kabir Nath (CEO)

On PTSD, Patrick, we will be reviewing and discussing those plans with the agency. As you'll recall, we choose not to give specific feedback on what our discussions are with the agency.

Patrick Trucchio (Managing Director of Equity Research and Senior Healthcare Analyst)

Great. Thank you so much.

Kabir Nath (CEO)

Thank you.

Operator (participant)

That concludes our Q&A session. I'd now like to hand back the call to the management.

Kabir Nath (CEO)

Thank you very much. Thanks, everyone, for your time and attention this morning. I think to state the obvious, we are very eagerly awaiting data next month. We know that you are as well, but we remain confident in that data, in that first six-week primary endpoint readout of 005. We continue to make very good progress on recruiting in 006 as well and reconfirm the timelines for that, the data in the second half of 2026. With that, thank you, and we look forward to pressing on and executing and potentially bringing forward a paradigm-changing treatment for TRD. Thanks, everyone, and have a good day.