COMPASS Pathways plc (CMPS) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the COMPASS Pathfinder's (sic) [ Pathways ] Limited Fourth Quarter 2024 Investor Call. [Operator Instructions] I will now hand today's call over to Steve Schultz, Senior Vice President of Investor Relations. Please go ahead, sir.

Welcome all of you, and thank you for joining us today for our fourth quarter 2024 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; Lori Englebert, our Chief Commercial 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, let me 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 annual report on Form 10-K filed with the U.S. Securities and Exchange Commission and in subsequent filings made by COMPASS 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'll now hand the call over to Kabir Nath.

Thank you, Steve. Good day, everyone, and thank you for joining us. Let me begin by thanking our existing and new investors who participated in our financing last month. This not only positions us to complete the COMP360 program in TRD, but also importantly allows us to progress a PTSD development program beyond the encouraging results from our open-label Phase IIa study that we received last May. This will be an exciting couple of years for COMPASS with multiple upcoming data readouts and the January financing positions us well for success. As we've guided to on the third quarter earnings call, we eagerly await the top line results from the 6-week primary endpoint from the 005 trial in the second quarter of this year. We've recruited over 90% of patients in the trial, so we're within sight of the end of recruitment, which we will announce once enrollment is complete. As a reminder, when the top line results become available in the second quarter, we'll be disclosing 3 key efficacy measures for the 6-week primary endpoint, the MADRS effect difference between the arms, the associated p-value and confidence intervals. We believe that these data should provide investors with a clear understanding of the treatment effect and if positive, together with our Phase IIb results, provide a strong validation for the treatment potential for COMP360 in TRD. From a safety standpoint, given that the trial is continuing blinded through 26 weeks, we'll provide a high-level assessment from the independent DSMB, which reviews unblinded safety data on a regular basis. For the 006 trial, which is the second Phase III trial, enrollment is going well and the high throughput 005 sites will convert over to 006 sites upon completing enrollment in 005. So we're gaining momentum, and we're excited for the 26-week results of 006 to read out in the second half of 2026. As mentioned earlier, given the recent financing, we're now able to resume the development of COMP360 for PTSD, and we're in the process of refining our plans for a late-stage clinical program. We're working through the various questions to address as well as potential clinical designs, the scope of which is under discussion both internally and with external advisers. Our primary goals are to maximize the probability of success and to get COMP360 to those who suffer from PTSD as quickly as possible. We look forward to updating you on our plans as they progress. Finally, on the commercial front, our strategic collaborations with select health care delivery organizations, including interventional psychiatry networks, are providing important insights into the various care settings, insights which we're using to inform our strategy for launch and post-launch scaling. Many of these organizations are delivering Spravato now, which is particularly helpful as we identify COMP360 opportunities to scale within their operating models. While our Phase III data will give us full clarity on the COMP360 profile, based on our data to date, we believe we will have a clinically differentiated treatment that is rapid acting with meaningful durability. Let me now hand the call over to Teri for the financial update.

Thank you, Kabir. I'll now step through the full year financial results. Cash used in operations for the full year was $119.2 million, within the guidance range that we provided last year of $114 million to $120 million. For the year ended December 31, 2024, net loss was $155.1 million or $2.30 per share compared with a net loss of $118.5 million or $2.32 per share during the same period in 2023. These results include noncash share-based compensation of $19.5 million in 2024 and $17.3 million in 2023. R&D expenses were $119 million in 2024 compared with $87.5 million in the prior year. G&A expenses were $59.2 million in 2024 compared with $49.4 million in the prior year. Debt under the Hercules loan facility was $30.2 million at the end of the fourth quarter. At December 31, 2024, we had cash and cash equivalents of $165.1 million. As Kabir mentioned, in January this year, we completed a financing, which resulted in net proceeds of approximately $140 million, which together with the $165 million of cash that we had at the end of the year, provides us runway to fund our operations at least through the planned 26-week data readout from our COMP006 study, which is expected in the second half of 2026. Regarding 2025 financial guidance, we expect net cash used in operations for the full year of 2025 to be within the range of $120 million to $145 million. Thank you, and I'll now turn the call back over to Kabir.

Thank you, Teri. We have an exciting couple of years ahead with multiple data readouts from our pivotal Phase III program. For 005, we expect to report the top line 6-week primary endpoint data towards the end of next quarter, and then the 26-week data once all 006 participants have completed Part A of that trial. For that 006 trial, we expect to disclose the 26-week results in the second half of 2026. In parallel, we're continuing to prepare for the launch of this potentially paradigm-changing treatment. Given the high unmet need and limited current treatment options, we see significant commercial opportunities in TRD and PTSD. As mentioned at the beginning of the call, Dr. Guy Goodwin, Lori Englebert and Dr. Steve Levine will also be available for Q&A. Thank you. And I will now turn the call back to the operator for Q&A.

[Operator Instructions] Your first question is from the line of Gavin Clark-Gartner with Evercore ISI.

So I believe the 6-week MADRS delta in the Phase IIb was a bit above 5 points. Do you think that should be a reasonable bar for the 005 initial top line?

Gavin, it's Kabir. And just to check, you can hear us clearly?

Yes.

Great. Thank you. Yes. So as we've, I think, consistently said, we have used the Phase IIb and that 6-week data from the Phase IIb as the benchmark for how we plan the powering for the Phase III studies. So I think what you said is reasonable. Again, a reminder that clinically meaningful is a significantly lower number in terms of effect size. But yes, that is the guide that we have used in planning the Phase III.

Okay. Great. And just on the PTSD side, maybe you could just frame for the upcoming advisory committee meeting, if there's anything you're looking to learn that will inform your development?

So the upcoming brex AdCom meeting, you mean, yes?

Yes, correct.

Guy?

Well, we'll be interested in basically how they view the patient population. That's something that requires a certain amount of thought with PTSD because of the spread of different kinds of trauma that result in PTSD and also the complexity of some of the lives, the early lives of patients who develop PTSD. So I think that's one of the key things. Obviously, we will be interested in how they view the issue of the actual difference in the scores, the CAPS-5, which is still a relatively new endpoint for use both clinically and in research and indeed in regulatory trials. So how they interpret changes in that in terms of remission, response, I think that will be informative for us and will guide us in how we think about our studies. I don't think beyond that, given the fact that the placebo arm here will be daily placebo. It doesn't really offer us a great deal of guidance as to what our placebo response might look like. So there are limitations, but we'll, of course be -- we'll be tuning in.

Your next question is from the line of Paul Matteis with Stifel.

This is Julian on for Paul. I guess, can you just talk a little bit about what's actually going to be disclosed in the top line for the upcoming COMP005 readout? I know you talked about some high-level safety as well as potential commentary from a DSMB on suicidal ideation. So just any commentary on that would be helpful. And then also, just any color on enrollment. Are these studies still enrolling? And are you on track?

No, thanks. Happy to take both of those. So in terms of what we will be disclosing, as we've said consistently from an efficacy perspective, with the 6-week data, it is going to be the MADRS effect size, the difference between the arms, the P value and confidence interval that's associated with that effect size difference. From a safety perspective, as you've said, it will be a statement from the DSMB, including specifically as to whether they see anything clinically concerning in terms of imbalance on suicidal ideation. And just a reminder, the DSMB is seeing unblinded safety data on a regular basis. Most recently, this month, in fact, and have just proceeded us to direct without change, without amendment. And in terms of recruitment, as I said on the call, for 005, we are now over 90% recruited for that trial. So we're very much within sight at the end of that. 006 is continuing to recruit well. One of the factors there is, as we've said, high-performing 005 sites will roll over into 006, and that's a process that, again, we now can start planning with exquisite detail. And so we continue to be on track now for 26-week data for 006 in the second half of 2026.

Your next question comes from the line of Charles Duncan with Cantor. Charles, your line is open. There's no response from Mr. Duncan's line. We'll go to the next question. Your next question is from the line of Ritu Baral with TD Cowen.

Kabir, what else will we get with top line as far as additional analysis? Will we still get remissions, responses and how will that play? How do you think the relative importance will play both to regulators and clinicians in relation to sort of the top line MADRS means? And will we be getting any secondary scales as well?

Thanks, Ritu. So no, to be clear, with the 6-week data, we are not going to be getting any secondaries. We're not actually going to be getting remission, response or anything else. It is literally just going to be the effect size difference on MADRS with the 6-week data.

Got it. And then as you are at 90% enrolled, how has the patient disposition and demographic shaped up to your expectations? Can you talk about what percentage has finally come in on background SSRIs? And how that may or may not impact the final efficacy and tolerability data that comes out?

Thanks. We aren't seeing that broken down in detail as it goes. My impression is just from the numbers of patients in washout that we're seeing a similar kind of number to what we saw in the Phase II. But I can't give you the precise statistic on that. In other respects, we aren't looking, again, as we go, at details of the, for example, comorbidities, the drugs actually used, the numbers of exposures. We're just not looking at that as we go. That's not been part of our protocol.

Got it. And will you release with top line what the powering of the study was designed to be?

Yes. I guess if you're interested, we'd be happy to share that, yes.

Once we have the data, yes.

Your next question is from the line of Charles Duncan with Cantor.

Hopefully, you can hear me. Congrats on the progress. I appreciate the added color. Wanted to follow up on a previous question with regard to top line for 05, and the recent DSMB meeting. I guess I'm wondering if you could provide a little bit of color on what you would anticipate in terms of suicidal ideation. We've talked about that in the past. I know it happens in this patient population, but provide a little more information on what you would have expected out of this patient population.

Charles, Guy here. I mean we do expect to see suicidal ideation. And as you know, we're collecting it on a systematic basis using the Columbia rating scale. In due course, we'll be able to summarize for the whole population, the extent to which we saw suicidality using that scale. Obviously, the serious adverse events that we collect have to be contextualized. And that is what the DSMB is able to do because it's unblinded. We can't do that from our own perspective. So we rely on their clinical judgment to decide that there is no clear reason to think that what is happening in the trial represents a signal of danger. So that essentially, we rely on their clinical judgment to look at all of the information, and we have to trust what they feedback to us.

And Guy, it's probably worth you adding that the reason we might see suicidal ideation is because of the patient population. So you may want to expand on that, and it's not necessarily part of our drug.

Yes. No, I mean I was sort of taking that as read, but perhaps that needs to be restated that depression has inherently carries with it suicidality, and suicidality carries with it the risk of attempted or completed suicide. So any study that enrolls a large number of patients with treatment-resistant depression, in particular, is running that risk. Obviously, we are trying to ensure that, that risk is minimal for the individuals who enter the study, but there is no doubt that the condition carries the risk.

Yes, that makes sense. I get that. But with regard to the DSMB review, they have been looking at if there are any events and tracking that. And you would know that if there were, correct?

We would know if they were concerned about the events that have occurred and that they have full information about. Yes.

Your next question is from the line of Leonid Timashev, RBC.

I just want to talk a little bit about the durability aspect again. Can you remind us first of all, how you're measuring durability if patients start other medication after receiving their COMP360 dose? And then I guess maybe the second part is on the more practical and real-world side, is it still a win that the patient starts like an SSRI or something after receiving their dose? I mean, how does the FDA think about that? And I guess, how are you guys thinking in the future if someone chooses to start different medication maybe to retain their response rather than coming back to get another dose of COMP360?

Okay. Well, I guess the most obvious way in which we see durability is that we know that we see a very early response and that we see in many cases of that, that -- in the Phase II study that, that response was maintained as a change in the MADRS from baseline over many weeks, up to 12 weeks, as you know, we followed patients. There is another sense, of course, in which one can look at durability and you've implied it, the time to an intervention for a new treatment, and we will be capturing that and indeed, we captured that in our Phase II, and that data will soon be publicly available in a publication. But that is one of the ways we will also be capturing the time to new treatment. That new treatment in our study doesn't affect the conduct of the study. The patients remain with us and are followed up within our 52-week protocol. What the FDA's attitude to that is not obviously something I can comment on. We will deliver the data to them, and they'll reach a judgment. But I think I can speak from a clinical perspective that I wouldn't be surprised if patients who make a good symptomatic response may actually want to go on to maintenance antidepressants. I think that would be very unsurprising if that happened. And therefore, it may very well be that, that is one of the ways in which durability can be obtained.

Your next question is from the line of François Brisebois with Oppenheimer. There is no response from François' line. We'll go to the next question, Patrick Trucchio with H.C. Wainwright.

A couple of follow-up questions from me. I guess the first one would just be on the COMP005 readout, what would be considered a clinically meaningful improvement in the MADRS total score at 6 weeks? And how should we contextualize the results in relation to prior trials at psilocybin and other TRD treatments? And secondly, I was just wondering if you could provide some details on the psychological support model, the implementation? And how this sort of is different from what we saw with the Lykos experience? And just in terms of how we should think about the psychological support model from a regulatory perspective, but then also in terms of a scale-up and commercialization perspective?

Thanks, Patrick. So a couple of questions in there, and I'll hand to Guy. But just before that, just a reminder, you're not going to see the MADRS effect difference on the active arm. We're going to see the difference between the arms, just to be clear on that. So again, just a reminder there. But then let me pass to Guy to comment on that and initially on the psychological support side and then to Lori to talk about that from a scaling perspective.

Yes. I mean I can't really add much more to what Kabir has said on the difference because we weren't really reporting that. As you've seen in our Phase II study, the immediate change was of the order of 13 points on the MADRS. And of course, we'd be very happy if we saw that again. I think on the psychological support model, I think what is important to understand is that what we're trying to do is to make it easy for the FDA to understand the drug's effects in isolation from any potential efficacy from psychotherapy. And so for that reason, we have simplified the support we offer to patients, so that it essentially gives them the information they need for the experience. It supports them on the day, and it gives a chance for them to talk about it afterwards. We are systematizing our approach to a considerable degree. And we're monitoring all of the sessions so that we will be able to ensure that the people sitting with the patients do follow exactly what we have trained them to do. And what we have trained them to do is essentially to follow a protocol that is really unlike clinical practice, and it's very much more about following a trial protocol. And that has required a certain amount of retraining, frankly, for patients who come in with more assumptions about psychotherapy. So that's our approach to the trials. I'll pass to Lori, who may want to comment on the implications of clinical...

Yes. What Guy said in terms of the purpose of the support model is that we are making sure that patients have support through the drug administration as well as prior to drug administration and after drug administration. And at launch and hopefully, to end up to scale up as well, we don't expect that to be very different than what the REMS requirements are for Spravato right now, and that will only be limited to a licensed health care provider, and we will not be constrained to therapists at the time.

And just one thing to add. This is Steve Levine. It's also worth saying that to be trained in a new treatment or a new protocol is common across medicine, not just in psychiatry. And so this is also one of the areas where we're able to focus on learning from our strategic collaboration partners, which encompass a handful of organizations but hundreds of sites to understand who is being trained within the organization right now, how they're being trained, how they allocate budgets for that training. So we'll be very informed in terms of real-world training as we think about how this moves into real-world care settings.

Your next question is from the line of Frank Brisebois with Oppenheimer.

Can you guys hear me now?

We can, Frank. Yes.

Okay. Wow. Okay. Sorry, I've had some IT issues. And sorry if this was mentioned as well. But I was just wondering if you can -- with Steve making a comment there, just a little more on this role of Chief Patient Officer. And what led to that? And what exactly that implies?

Thank you for asking that question. I'm very happy to answer that. As a psychiatrist by background, I'm really happy to see that COMPASS has placed such an emphasis on ensuring that both the patients -- particularly the patient, but both the patient and health care providers' perspectives are incorporated into everything that we think about in plant, whether it's the design of our trials or thinking ahead to a post-approval environment, where this actually is delivered to patients by licensed health care providers. And so that's really broadly where I'm focused is involved widely across the organization and ensuring that those voices are reflected and that there's a realistic perspective on what may be needed outside of the relatively rarefied environment of clinical trials as this moves into real-world patient settings and actually gets to patients.

Yes. And I think, Frank, I mean, I think it's self-evident that a psilocybin experience is a very difficult -- we talk about a paradigm-changing approach, and it absolutely is a paradigm-changing approach, specifically from the point of view of the patient, and that we're supporting some pretty vulnerable patient populations through what can be a challenging experience. So having somebody of Steve's caliber and experience really advocate for that and stand for that within the company, we felt was really important. And who better to have than Steve to do it.

Okay. Great. And then just on the 005, in terms of timing of 26-week data, can you just help us -- just remind us what you're sharing here about Part A and enrollment, and when 006 26-week comes out, just how should we best guess 005 26-week data for timing?

So I'm happy to invite you to continue to guess, Frank. I mean what we have said clearly is the 26 weeks of 005 will be gated at a minimum on Part A completion of 006. As you know, for 006, we have given a fairly wide range for guidance for the 26 weeks for now in the second half of 2026. But obviously, as we get clearer on 006 enrollment and time lines, we are in a position to give more specific guidance also around the 26 weeks of 005. But for now, we're not giving specific timing guidance around that.

Your next question is from the line of Vikram Purohit with Morgan Stanley. There is no response. There is no response. We'll go to the next question, Sumant Kulkarni with Canaccord Genuity.

I actually have 3. So there was an earlier question on point separation on the MADRS scale. But do you think that COMP360 might need to hit some higher bar relative to what is considered conventionally clinically relevant on MADRS to be successful in the real world? Or would the non-chronic dosing paradigm more than outweigh that scenario?

So I'll hand it to Guy, but just as a reminder, I mean, this is TRD, Sumant, not MDD, and there's precisely 2 approved drugs in TRD. I mean this is -- but Guy?

Well, I think that's the honest answer, actually, the yardstick doesn't really exist to anything like the extent that it exists in MDD. Is there anything else we should say on that? I mean, I...

No. So it's a lower bar.

Yes. If anything, it will be a lower bar for TRD versus MDD.

Understood. So now with the understanding that COMP360 is relatively far ahead in your term -- in terms of your potential ability to get to the market, how has your thinking evolved on how the product might be able to compete with other psychedelic compounds that require shorter times in the clinic, given that we've seen some Phase II data from 5-MeO-DMT, for example?

This is Steve. I'll take that one. I think in terms of considering what drives decision-making from health care providers amongst many considerations, key amongst them are the economics, whether this is an economically viable and hopefully attractive proposition for them. And so with that, it really highlights the work that we did on procuring new category 3 CPT codes, which are specific for the administration day and the support provided on that day. And as a reminder, those codes can be used across a range of psychedelic treatments, if approved, and they're reported on an hour-by-hour basis. And so regardless of the length of the treatment, we anticipate that health care providers will be reimbursed for the providers -- for the services provided.

I also just want to add, if you don't mind, Sumant, that we need to think about the indications that some of these will be approved for. And right now, TRD -- our indication will be the only TRD on the product for quite some time, regardless of a psychedelic.

Got it. And my last question, there seems to be some enthusiasm around support for psychedelic medicines at very high levels in the current political environment. But how would you say that any changes either in terms of personnel or morale at the FDA have affected the tone of your recent interactions with the agency, if any, or any predictions you might have there on what that might mean as you head into a potential regulatory process here?

Thank you, Sumant. It is a great question. And I mean the straight answer is, we don't yet know, to be clear. But obviously, we are tracking things very closely. I think our overall perspective is, at worst, some of these changes are neutral. And potentially, there are some positive tailwinds in this. And if you think about an area we haven't really focused on, for instance, PTSD, the combination of that, the influence of veterans organizations and so on, you can see that clearly in that space could be a tailwind. So far, in terms of FDA interaction, there is no change for us to comment on.

Your next question is from the line of Jason McCarthy with Maxim Group.

This is Michael Okunewitch on the line. I guess just to start off, I'd like to see if you could talk a little bit more about your pipeline plans. You did mention you're designing a late-stage study in PTSD. Can you talk about some of the other indications that you're working on? I know anorexia has been a target for a while?

Sure. So the anorexia study, we have completed that closed enrollment, and we would expect to see data sometime in 2025 on that. We have a number of IISs that we've conducted in the past that have given us interesting signals in other indications. But right now from a full steam development ahead, our focus is on TRD and PTSD.

All right. And then just -- I wanted to see if you could comment on, just given the recent rise we've seen in adoption of Spravato, it did more than $1 billion this year. Do you think that having another interventional psychiatric therapeutic in TRD could help prepare the market for something like COMP360?

We absolutely do. So J&J has done a great job of really preparing and educating HCPs on what TRD actually is. And as a reminder, TRD is broadly referred to as the failure of 2 prior antidepressants, and what we are seeing and what we're thinking about with Spravato is, if you think about the addressable patient population, which is probably around about 3 million MDD patients right now, Spravato has less than 2% of patients in that TRD patient population. So any additional success on the Spravato side only bodes well for us coming to market.

Congrats on the progress.

Your next question is from the line of Vikram Purohit with Morgan Stanley.

Can you hear me?

Yes.

This is Morgan, on for Vikram. So 2 from us for PTSD. One, could you walk us through how you prioritize PTSD over the other indications like bipolar disorder that you're exploring in different IISs? And then on the path to filing for PTSD, what do you imagine that looking like in terms of studies, patients -- number of patients and what level of follow-up data do you think is needed?

Yes. Thanks, Morgan. So I mean, I think PTSD, as you'll be aware, nothing has been approved for more than 20 years in PTSD. So in terms of true unmet need, the scale of the problem and kind of the intensity of the focus around the problem, it was clear to us that particularly having seen the signal in our Phase IIa, this was an area that both from a medical and therefore, from a commercial perspective rose absolutely to the top of the priority list. So that's hence the focus on PTSD ahead of any other indication. Now I'll hand to Guy to talk a little more around the development regulatory side.

Yes. I mean, we are obviously in the process of thinking carefully about that. I can't say that we're yet fixed on one way to go. I mean we expect to have a meeting with the FDA to thrash that out at some point. And we've obviously developed a number of scenarios with the way we could actually develop the treatment in PTSD. I mean the patient population, we're also going to have a little bit of guidance of the -- from the FDA's attitude from the AdCom that's going to take place for brexpiprazole, which we'll obviously be following, and that will maybe give us some insight into the way the patient population, in particular, is observed. So yes, we're looking forward to an exciting year with this. I mean the other indications that you mentioned, for example, bipolar II disorder, a little more difficult simply because of co-medication and the complexity of the condition. PTSD, as Kabir has indicated, has this massive unmet need. There are very little available, and we have this really very encouraging data that showed durability after a single administration. So I think that's clearly the first place to go. We have no doubt in our minds about that.

Yes, Morgan, it's Lori. If you don't mind I just add a little bit of additional color. It is a very highly prevalent population as well, about 13 million patients out there. And as Guy mentioned, very limited options. There are actually only 2 FDA-approved products for PTSD right now. And as Kabir mentioned, it's been a very long time since innovation has happened in the market.

Your next question is from the line of Frank Brisebois from Oppenheimer.

Just an extra one here. On the DSMB side, the comment you made that you just had recently, can you remind us what exactly you said of how recent that interaction was? And seeing 90% enrolled, is it fair to assume that there are no more DSMB looks at this until readout? Or could there be one more?

So as in recent this month, as it was in February, so that's how recent the last is. I guess, as to the kind of the quarterly cadence versus when we actually have top line in hand, that, we will see what happens in the course of next quarter. But I mean the regular cadence is quarterly.

At this time, there are no further questions. I will now hand the call back over to management for closing remarks.

Thanks very much. So thanks, everyone, for your time and attention today. As we said, we're at the start of a very exciting couple of years for COMPASS with multiple data readouts between now and the latter part of 2026. And in particular, we're excited about the 005 top line that we expect to see towards the end of next quarter. So thanks, everyone. Thanks for your time.

This concludes today's call. Thank you for joining. You may now disconnect your lines.