Zinger Key Points
- Stifel initiated coverage on Compass Pathways with a Buy rating and an $11 price target, citing its progress in psychedelics-based treatment
- COMP360's Phase 3 trial for treatment-resistant depression is the largest psilocybin study, with key data readouts expected in 2025 and 2026
- Get 5 stock picks identified before their biggest breakouts, identified by the same system that spotted Insmed, Sprouts, and Uber before their 20%+ gains.
Stifel initiated coverage on Compass Pathways plc CMPS, saying, “The Time Is Now for Psychedelics.”
Compass is a clinical-stage biotechnology company focused on developing psychedelics-based drugs for neuropsychiatric disorders.
The analyst equates COMP360 to Spravato 2.0. Johnson & Johnson’s JNJ Spravato (esketamine) is a nasal spray for TRD and major depressive disorder (MDD), selling over ~$1 billion annually.
Stifel writes, “commercial success of Spravato offers major validation that the intermittent psychedelic treatment model for depression is scalable.”
Stifel has initiated with a Buy rating and a price target of $11. Analyst Paul Matteis expects the company to be well positioned over the next ~18 months to derisk COMP360 (psilocybin) in two phase 3 studies. COMP360 doesn’t need to be a blockbuster to garner meaningful upside to the stock.
The company says the pivotal phase 3 program of COMP360 psilocybin treatment in treatment-resistant depression (TRD) is the largest randomized, controlled, double-blind psilocybin treatment clinical program ever conducted.
Top-line 6-week (primary endpoint) COMP005 data is on track for the second quarter of 2025, and 26-week COMP005 data is expected in the second half of 2026.
In addition, the design of a late-stage clinical program for patients with post-traumatic stress disorder is underway.
Stifel analyst says Compass Pathways was once a hyped early-stage IPO in 2020, fueled by excitement around psychedelics. Now, it has established itself as a ‘credible CNS biotechnology company.’
About five years ago, psychedelics gained attention, but many uncertainties remained. While some investors still have concerns, Compass has made significant progress.
The company has strengthened its leadership team, reduced risks for psilocybin-based therapy (COMP360) through a well-controlled trial published in NEJM, and aligned its Phase 3 program with FDA standards.
Compass Pathways says the $165.1 million cash position is expected to fund operating expenses and capital expenditure requirements at least through the planned 26-week data read-out from the COMP006 study.
Price Action: CMPS stock is up 6.22% at $3.93 at the last check Thursday.
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