Compass Pathways stock plunged Tuesday, even as the London-based psychedelic-drug developer said a strong dose of its psilocybin-based drug helped reduce depression in treatment-resistant patients after three weeks in a Phase 2b trial.
XCompass Pathways (CMPS) said that a 25-milligram dose of its Comp360 medication — a crystalline form of psilocybin taken in the form of an oral capsule, accompanied by headphones and an hours-long song playlist of largely classical music — showed a "highly statistically significant and clinically relevant reduction" in depression-symptom severity over that time.
"The medicines they take, quite frankly, quite often don't work," George Goldsmith, Compass' CEO, said of patients with treatment-resistant depression. "That's why they're called treatment-resistant."
The findings are the latest pointing to the potential for psychedelic drugs to treat mental-health issues like depression, anxiety and PTSD. But the exact reason for the sharp drop in Compass Pathways stock was unclear.
Some analysts called the decision to sell misguided. But one analyst noted investors' concerns around the treatment's durability twelve weeks out.
"People who really did not grasp the significance of the data, they decided to sell," Roth Capital Partners analyst Elemer Piros said in an interview.
233 Patients, 10 Nations, 7 Languages
In the trial, researchers gave that single dose to 233 patients, who also received support from therapists. The trial took place in 22 sites, in seven languages across 10 nations, including Canada, the U.S., the UK and several others in Europe. Ninety-four percent of the patients hadn't used psilocybin, the hallucinogenic compound in magic mushrooms. Researchers monitored patients' progress for 12 weeks.
"In this groundbreaking study, a single dose of psilocybin, given in conjunction with psychological support, generated a rapid response that lasted up to 12 weeks," David Hellerstein, a principal investigator on the trial, said in a statement. "Remission rates appear to be higher than seen in traditional medication studies."
Trial Objectives
Compass, which is backed by billionaire investor Peter Thiel, has been trying to measure the medication's impact on patients with treatment-resistant depression. Treatment-resistant depression is considered to be depression that doesn't fade after at least two anti-depressive treatments.
The objective of the trial was to gauge the right dose size for a bigger Phase 3 trial, set to begin next year. The primary endpoint, or outcome, of the trial was to see if 25 milligrams of Comp360 could ward off treatment-resistant depression in three weeks. The secondary endpoint revolved around its effects over 12.
Compass's Comp360 treatment regimen received breakthrough therapy designation from the FDA in 2018. The FDA has approved Johnson & Johnson's (JNJ) Spravato, which uses a derivative of ketamine, for treatment-resistant depression and people who are actively suicidal.
Compass Pathways Stock Falls
Ritu Baral, an analyst who covers Compass Pathways stock, said the results were "extremely positive." Still, Compass Pathways stock sank 16% in the stock market today. That's after tumbling 12% on Monday from an eight-month high.
Compass also reported financial results for the third quarter. Compass lost 38 cents per share. That wasn't as bad as the 49-cent per-share loss expected. Compass Pathways still has no revenue, as it works on regulatory approval to bring Comp360 to market.
Other psychedelic stocks also nosedived. MindMed (MNMD) slid 10%. Atai Life Sciences (ATAI) gave up 8%. Cybin (CYBN) lost 1%.
Compass said that the patients generally tolerated the effects of Comp360. But most reported some mild side effect, like headache, fatigue or insomnia. Twelve patients reported far more serious behaviors, such as suicidal ideation and intentional self-harm.
Compass' trial compared two doses of Comp360 — one at 25 milligrams and one at 10 — against a one-milligram dose. When weighed against the one-milligram dose, the 10-milligram capsule "did not show a statistically significant difference at week 3," Compass said.
The company said that at least twice the number of patients who took a 25-milligram dose of the psilocybin-based drug showed a response and remission three weeks in and twelve weeks in, compared to the group that received a one-milligram dose.
Investor Concerns Over Compass Pathways Stock
Compass said 19 patients — or 24.1% — who had the 25-milligram dose still responded to the treatment at week 12. That compared to 10.1% of patients in the one-milligram group.
"Investors' concerns on durability revolve around lack of statistical significance on mean improvement at the secondary 12-week endpoint," Baral said in a research note.
Goldsmith, in the interview, emphasized that the trial involved a single dose, in people who haven't responded to other treatments. And he said that the findings presented an opportunity for further examination into the people for whom the drug's effects didn't last all the way to 12 weeks.
"I think now we have a baseline to start learning from and building from," he said. "But I think it's super important for people to understand the challenges of working in treatment resistant depression."
Therapy Procedure
After a screening, patients in the trial worked with therapists for a few weeks to prepare. They were taken off their antidepressant medications. The psilocybin therapy itself, which often took place at a university, took place in standardized treatment rooms, where the patient ingested the psilocybin medication.
While waiting for the effects to take hold, patients typically sat on a sofa. They could peruse books showing nature and art. Once they felt the drug's effects, they were invited to lie down, and put on eyeshades and headphones. The soundtrack playing on those headphones was six hours long, journeying through different emotional states.
During that time, no therapy happened, to allow the patient to focus on the dive inward, and any feelings and memories that emerged as their sense of self dissolved. But a therapist remained by the patient's side if the patient needed to use the bathroom or underwent a stretch of anxiety.
'Everything' Is Standardized
After the six- to eight-hour session ended, a friend or family member would accompany the patient home. In the days following the session, the patient would engage in talk therapy with the therapist.
Lars Wilde, Compass' chief business officer, said in a recent interview that the therapy process — down to the playlist, as well as the furniture, books, art, and lighting in the room — was designed with consistency in mind.
"Everything is absolutely standardized so that we reduce any noise in the statistics that might come from different ways to conduct these sessions," he said.
Compass Pathways stock debuted last year. It has a 46 Composite Rating and a 19 EPS Rating.
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