UK-based research firm COMPASS Pathways has finally decided to take the next step by officially filing for an initial public offering on the NASDAQ Global Markets Exchange. The company has planned to trade under the symbol “CMPS.”
COMPASS Pathways has been researching on mental health solutions with alternative medicine such as psilocybin-based therapy for a long time now. The company aims to be a pioneer in the industry by transforming the patient experience in mental health care. Psilocybin therapy is being researched all the way back to 1958 when a renowned Swiss chemist Albert Hoffman isolated and determined the structure of psilocybin for the first time.
In 2018, COMPASS Pathways received FDA Breakthrough Therapy designation for their psilocybin therapy program aiming to decrease or potentially eliminate treatment-resistant depression in people. The company states that it is “conducting a randomized controlled phase IIb study of psilocybin therapy in 216 patients with treatment-resistant depression in 20 sites across Europe and North America.” The psychedelics space is slowly but surely growing with many companies extending research on psilocybin-based therapy.
According to the filing made last week, COMPASS Pathways has a goal to raise US $100 million within the round–– placing a valuation on the firm of more than US$500 million. Although these numbers are subject to change, they are important as they give early backs approximately a 10x on the valuation of their initial investment. The initial amount of $100 million is being used simply as placeholder equity at the moment.
COMPASS Pathways’ current processes are in the phase of conducting clinical trials on for psilocybin-based therapy in treatment-resistant depression––currently in Phase IIb. Like hundreds of businesses across the globe, the company had to put their clinical trials on a temporary hold due to the COVID-19 pandemic and its restrictions. However, it plans to return back to business as soon as it safely can. Moreover, a funding round that took place in April for $80 million was put towards psilocybin-compound research.
Investors should know that COMPASS Pathways’ operations have increased as the company spent $26.4 million in the first half of 2020 in operating expenses, compared to $7.6 million in 2019. The companies current cash reserves amount to $67.6 million. Proceeds from the raise are planned to go towards continuing the research on clinical trials where they were left off, as well as clinical and business development activities. At the moment, COMPASS Pathways has not yet provided a timeline for closing the IPO round.