Compass Pathways Q2 2024 Earnings Report

Compass Pathways EPS Results

• Actual EPS: -$0.56
• Consensus EPS: -$0.53
• Beat/Miss: Missed by -$0.03
• One Year Ago EPS: -$0.62

Compass Pathways Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Compass Pathways Announcement Details

• Quarter: Q2 2024
• Date: 8/1/2024
• Time: Before Market Opens
• Conference Call Date: Thursday, August 1, 2024
• Conference Call Time: 8:00AM ET

Compass Pathways (NASDAQ:CMPS) (NASDAQ: CMPS) is a clinical-stage biotechnology company focused on the development and commercialization of psilocybin therapy for mental health disorders. Founded in 2016 and headquartered in London with additional offices in the United States, Compass Pathways is pioneering the use of synthetic psilocybin combined with psychotherapy to address treatment-resistant depression. The company’s flagship program is a Phase IIb clinical trial evaluating COMP360, its proprietary psilocybin formulation, which has received Breakthrough Therapy designation from the U.S. Food and Drug Administration.

In addition to its lead depression program, Compass Pathways is exploring broader applications of psychedelic-assisted therapies in areas such as anorexia nervosa and other mood disorders. The company has built a scalable manufacturing process for synthetic psilocybin and established a network of trained therapists and research sites across Europe and North America. Compass also leverages digital tools to capture patient-reported outcomes and physiological data, supporting personalized treatment protocols and enhancing safety monitoring throughout clinical studies.

Since its initial public offering in September 2020, Compass Pathways has advanced its pipeline through rigorous clinical partnerships and academic collaborations. The leadership team is led by co-founder and CEO George Goldsmith, who has guided the company through regulatory milestones and strategic alliances. With a board of directors comprising experts in neuroscience, clinical research, and life sciences commercialization, Compass remains committed to transforming the treatment paradigm for mental health by combining innovative science, patient-centered care, and robust regulatory engagement.

Compass Pathways Q2 2024 Earnings Call Transcript

Key Takeaways

• Compass appointed Laurie Engelbert as Chief Commercial Officer and Gino Santini as Board Chairman, adding seasoned leaders to support commercial and clinical execution.
• The COM360 Phase 3 program in treatment-resistant depression is on track, targeting a late Q4 topline readout for the “5” trial (with a slight chance of slipping into January) and a mid-2025 readout for the “6” trial.
• Enrollment requires extra resources and site support as Compass works with many clinical sites new to psilocybin research, which may extend recruitment timelines despite safeguards around trial quality.
• FDA advisory committee discussions highlighted the need to clarify therapy integration, blinding risks, and safety data collection, and Compass asserts its trial design addresses all these regulatory considerations.
• In Q2, cash used in operations was $34.4 million (within guidance) and the company held $228.6 million in cash, providing a runway into 2026 to fund pivotal trials.

Presentation

[Operator]

Good day, ladies and gentlemen, and welcome to COMPASS Pathways Q2 2024 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Stephen Schultz. You may begin.

[Stephen Schultz, SVP of Investor Relations at COMPASS Pathways]

Welcome, all of you, and thank you for joining us today for our Q2 2024 results conference call. Again, my name is Steve Schultz, Senior Vice President of Investor Relations at COMPASS Pathways, and today I'm joined by Kabir Nath, our Chief Executive Officer; Dr. Guy Goodwin, our Chief Medical Officer; and Teri Loxam, our Chief Financial Officer. 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.

[Stephen Schultz, SVP of Investor Relations at COMPASS Pathways]

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 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.

[Kabir Nath, CEO at COMPASS Pathways]

Thanks, Steve. Good day, everyone, and thank you for joining us. First, let me welcome two new leaders to COMPASS Pathways. A few weeks ago, we added Lori Englebert as Chief Commercial Officer, and as you saw just this morning, we have appointed Gino Santini as the new Chairman of our Board of Directors. Lori and Gino both have strong, relevant experience that will benefit COMPASS as we continue to complete our COMP360 phase III clinical trials and build our commercial capabilities. I'm pleased that these exceptional leaders have chosen to be a part of our team, which is a reflection of their commitment to the field of mental health and their confidence in COMPASS. Turning to our core program in treatment-resistant depression, we're doing something that has never been done before at this scale and working with many clinical sites that are new to psilocybin research.

[Kabir Nath, CEO at COMPASS Pathways]

We're making progress on recruitment in our COMP360 phase III trials. As we discussed on prior quarterly calls, the resources that we added earlier in the year to help accelerate the process of confirming TRD diagnosis have been helpful. We continue to expect the readout for the six-week primary endpoint top-line data from the 005 placebo-controlled trial in quarter four this year. However, we're also needing to spend increased time and resources to support clinical sites to recruit as quickly as possible while maintaining the highest level of quality in the trials. Recruitment is therefore trending towards the end of the year, and there's a chance the data could push into January. As a reminder, we expect to need both 005 and 006 for a regulatory submission, and we continue to expect the six-week primary endpoint for 006 by mid-2025.

[Kabir Nath, CEO at COMPASS Pathways]

On today's call, Guy will provide some thoughts on key issues that were discussed during the Lykos Adcom, and Teri will provide the financial overview. I'll provide some closing comments, and we'll then move to Q&A. Guy.

[Guy Goodwin, CMO at COMPASS Pathways]

Thank you, Kabir. The Lykos Advisory Committee was certainly eventful, and it provided some key insights into the FDA's thinking and their requirements for review of therapeutics in this new class of drugs. Three items came into focus: the therapy aspect of the clinical protocol, the issue of unblinding, and lack of certain safety data that FDA deemed important to understand. Let me discuss these in order. First, regarding psychotherapy, MDMA appears to increase interactive communication with the therapist during the drug experience. It truly is psychotherapy catalyzed by the drug. This is in contrast with psilocybin, which elicits a subjective inward experience for patients. With COMP360, the patient is supported by a licensed therapist or other medical professional, mostly for safety purposes. There is no active psychotherapy on the day of drug administration.

[Guy Goodwin, CMO at COMPASS Pathways]

Most of the administration session is silent, and any interaction is typically to redirect the patient's focus back inwards. Pre-administration preparation ensures patients understand the trial and what to expect on the day of administration and prepares them to be in the right frame of mind to undergo treatment, not unlike other medical procedures. Patients have two post-administration sessions to provide them with an opportunity to discuss their experience and integrate it into their lives. Second, during the discussion of unblinding, context is important here. It is not uncommon in neuroscience for drugs to produce effects that are detectable by patients. It is the absence of such effects that unblinds the patient in trials of a psychedelic. It is the presence of adverse effects like nausea or somnolence that are likely to cue the unblinding that may often occur in other trials, for example, of conventional antidepressants or antipsychotic drugs.

[Guy Goodwin, CMO at COMPASS Pathways]

Such unblinding has not prevented their approval as medicines. As requested by the FDA, our 005 trial is placebo-controlled, which will help to characterize a safety baseline, but lack of an active control will make potential unblinding likely. By contrast, our 006 trial was designed similar to the phase IIb, with a strategy to minimize the potential for unblinding. 006 has three active arms, so patients know that they will receive a dose of COMP360, making it more difficult for them to discriminate, in particular between the 10 and 25 milligram doses. In fact, most participants in the phase IIb study reported an intensity of psychedelic effects that could have come from any of the doses. In addition, we have also put a cap of 15% on recruitment of patients with prior experience with psychedelic drugs.

[Guy Goodwin, CMO at COMPASS Pathways]

We believe that this design safeguards the blinding of the trial, and the two phase III trials together will produce a robust package for the FDA. Finally, we are conducting the COMP360 TRD clinical program to the highest standards, and we are collecting the range of safety data that would be expected of any pharmaceutical clinical development program, including positive side effect data. For example, we have collected data from the Altered States of Consciousness questionnaire after every drug administration. This survey is comprised of 94 items covering the full gamut of experiences, both positive and negative, attributable to psychedelic drugs. Looking at the FDA's guidelines and observing the discussion at the Lykos meeting, we are confident that our pivotal program will deliver what the FDA requires to effectively evaluate COMP360 treatment. Let me now hand the call to Teri for the financial overview.

[Teri Loxam, CFO at COMPASS Pathways]

Thank you, Guy. I'll now step through the Q2 financial results. Cash used in operations in the Q2 was $34.4 million, within the guidance range we provided of $32-$38 million. Regarding Q3 2024 financial guidance, we expect net cash used in operations to remain between $32 and $38 million. Turning to full year financial guidance, we expect cash used in operations to be between $110 and $130 million, which assumes that we will receive the 2023 R&D tax credit this year. COMPASS continues to maintain a strong financial position, with cash and cash equivalents of $228.6 million at June 30, 2024. This compares with $262.9 million at March 31, 2024. We expect our cash runway to fund operations into 2026. Long-term debt under the Hercules Loan Facility was $29.4 million at the end of the Q2.

[Teri Loxam, CFO at COMPASS Pathways]

We will continue to manage our cash carefully to advance our pivotal program and to achieve important milestones that we believe will create value for our shareholders. Thank you, and I'll now turn the call back over to Kabir.

[Kabir Nath, CEO at COMPASS Pathways]

Thank you, Teri. While we await the top-line data readout for the primary 6-week endpoint in the 005 phase III trial near the end of the Q4, I want to reflect more broadly on our progress. We now have in place a senior management team of seasoned executives who have a passion for treating mental health conditions and decades of relevant collective experience in bringing innovation to patients. We continue to generate all the necessary supporting data for an NDA filing, and our pre-commercial collaborations are yielding valuable learnings both for us and for potential future sites of care as we continue our preparations to leverage the commercial delivery network. The commercial marketplace has seen continued growth for interventional psychiatry treatments such as Spravato, which validates our approach.

[Kabir Nath, CEO at COMPASS Pathways]

Finally, I want to thank David Norton for his guidance and commitment to COMPASS Pathways in serving as interim chairman of the board, and we're pleased that he will continue to serve as a highly valued member of the board after Gino joins us as chairman in September. We have a strong team in place to continue to execute our phase III program and build the organization for potential commercialization. With the progress we've made, we're well positioned for continued success in TRD and beyond. Thank you again for your participation on today's call, and we'll now turn to Q&A, so I will hand this back to the operator.

[Operator]

Thank you. As a reminder, to ask a question, simply press star 11 on your telephone and wait for your name to be announced. To remove yourself from the queue, press star 11 again. One moment for our first question. It comes from the line of Ritu Baral with TD Cowen, please proceed.

[Ritu Baral, Analyst at TD Cowen]

Good morning, guys. Thanks for taking the questions. First question, Kabir, I wanted to just ask about the conduct of ongoing 005. How many DSMB looks have you had, and how is the overall suicidality rate looking, just given the high background rate of suicides in the TRD population in general and the focus on this? Can you give us a sense of conduct? And then I have a couple of follow-ups. Thanks.

[Kabir Nath, CEO at COMPASS Pathways]

Sure, thanks, Ritu. Just checking that you can hear us?

[Ritu Baral, Analyst at TD Cowen]

Yes.

[Kabir Nath, CEO at COMPASS Pathways]

Great. I'll actually hand that first question to Guy, if I may. So, Guy.

[Guy Goodwin, CMO at COMPASS Pathways]

Yes, hi, Ritu. We've just recently, as it happened, had a DSMB meeting at which both 005 and 006 were considered, and they're quarterly, as you may know. Basically, the feedback was that we continue the trials as planned, so with no changes to procedures of any kind.

[Ritu Baral, Analyst at TD Cowen]

Great. And then another sort of conduct question. One thing that came up in the Lykos study, I'm sorry, in the Lykos Adcom, was the fact that they didn't do labs. And I'm just wondering, I want to make sure I understand the scope of the labs that were requested for that therapy versus, I guess, what we normally think of as labs in biotech, including liver levels, kidney function, et cetera, et cetera. Were there any special labs that the FDA was referring to that, yeah, when the discussion focused on the labs?

[Guy Goodwin, CMO at COMPASS Pathways]

My understanding, and obviously, we only kind of got the discussion. We didn't have the background documents, so to speak. My understanding was that there were routine labs that they were doing that were not materially different from what is required for other drugs.

[Ritu Baral, Analyst at TD Cowen]

Got it. Helpful. And then last question. Have you seen any impact on your enrollment rates, either for 005 or 006, based on the Adcom proceedings? And more specifically, maybe a little more subtly, would you expect, just given how much that's been in the news for that, to potentially impact your placebo rates such that you might need to take another look at the stats plan or it might change powering? Thanks so much.

[Guy Goodwin, CMO at COMPASS Pathways]

Basically, to your last question, no. There's really no suggestion that I know that one trial influences another in quite that way. Clearly, there were a number of issues that were brought up around the use of placebo in general, and that formed part of the discussion, the background noise, if you like, that we heard following the Adcom. I mean, our sense was that actually there were contending sounds. Some were positive. Some were trying to, in a sense, reverse the sentiment that was expressed by the committee. But we hadn't really had feedback either from the sites or less directly from patients or in terms of changes in run rates for ourselves that suggest any impact at all.

[Ritu Baral, Analyst at TD Cowen]

That's great. Thanks for taking all the questions.

[Guy Goodwin, CMO at COMPASS Pathways]

Thanks, Ritu.

[Operator]

Thank you. Our next question comes from the line of Leonid Timashev with RBC Capital Markets. Please proceed.

[Leonid Timashev, Analyst at RBC Capital Markets]

Thanks. I had maybe one follow-up on one of Ritu's questions and then a second question, if that's okay. So I guess just following up on sort of the discussion around the enrollment trends in the sites, I guess, can you talk about how sites have been performing? I mean, something that you alluded to, but I guess with respect to screen-in or screen-out periods and I guess any anomalies you may have seen on the blinded data from the raters that might require maybe retraining or spending some of that additional time that you referred to. I guess, how are you maintaining that site quality?

[Kabir Nath, CEO at COMPASS Pathways]

Yeah, I'll start. Thanks, Leonid. So as I said on the call, we are continuing to recruit successfully into both 005 and 006. As we've discussed earlier in the year, the need to actually be better and quicker at getting the TRD diagnosis confirmed and the additional resources we've put in there have been helpful to that. And really, it's just a focus on continued quality, ensuring that we do have the right patients, ensuring that sites are doing everything necessary. We're continuing to be in very close touch with them, visiting them, and so on. But I wouldn't say there's anything out of the ordinary or any particular anomalies that we've identified, and certainly no trend breaks post-Adcom or anything that suggests a change.

[Guy Goodwin, CMO at COMPASS Pathways]

Perhaps I'd add, Leonid, that one of the key quality indicators, if you like, for any trial is retention, and that's remained actually better in some ways than we might have expected. So that's reassuring actually for all phases of the trial. Remember, there's a first A phase for the primary outcome, and then subsequent redosing, and then open label treatment phases. Recruitment has maintained. Retention has been maintained into indeed the final phase of the trial. So that has been extremely pleasing. It is, of course, unblinded in the sense that we don't know what the results are, but we do know that patients are staying in the study. Were they not staying in the study, that would be a problem, of course.

[Leonid Timashev, Analyst at RBC Capital Markets]

Got it. Thanks. It's really helpful. And then just maybe a second question related to the concept of the suicidality. I guess, as you've been talking to KOLs, do you have a sense of what might be an acceptable amount of suicidal ideation, just given the patient population and the fact that psychiatrists often have some amount of experience managing patients, especially even the SSRIs have some elevated risk that's on the label? I guess, do you have a sense of what might be an okay signal if one does appear on suicidality?

[Guy Goodwin, CMO at COMPASS Pathways]

I think the truth is that clinicians who treat depressed patients simply live with suicidality as a fact of the disorder. It's a core symptom. It's therefore ever-present, really. They don't actually think in terms actually that people looking at clinical trial data tend to do. They tend to see it more as a fact of life. We don't get the sort of feedback as to what's acceptable and what is not acceptable. Ultimately, of course, the key observation will be the differential rates, if there are any, between the different arms of the study. That will allow us to make a real and genuine conclusion about this risk, hypothetical risk, that there may be higher risks in the active arms. We simply, at the moment, I think, don't have sufficient data to say, but we will have that data once we have completed our studies.

[Leonid Timashev, Analyst at RBC Capital Markets]

Powerful. Thank you, guys.

[Guy Goodwin, CMO at COMPASS Pathways]

Pleasure.

[Operator]

Thank you. Our next question comes from the line of Charles Duncan with Cantor. Please proceed.

[Charles Duncan, Analyst at Cantor Fitzgerald]

Yes, good morning, Kabir and team. Thanks for taking our question, and good to hear of the progress. Especially like to hear some more from Guy on the recent Adcom. But before that, I guess I'm wondering if you can provide a little more granularity on, call it the news flow yet this year, understand that the analysis may make December versus January a question mark. But do you plan to announce the completed enrollment in 005? And then I'll ask another question to Guy.

[Guy Goodwin, CMO at COMPASS Pathways]

Thanks, Charles. We haven't yet determined whether we will make that announcement.

[Charles Duncan, Analyst at Cantor Fitzgerald]

Okay. That would be helpful to hear. Moving on to Guy, I guess you did a great job outlining the thoughts post the Lykos Adcom. I'm wondering if there was anything that was surprising to you. It seems like these are issues that you might have considered, especially given the guidance and design of your trial. And so I guess I'm wondering if there was anything, any new thinking that came out of the Adcom that perhaps you're doing or were these considerations that you had in designing the 005 and 006 program?

[Guy Goodwin, CMO at COMPASS Pathways]

I think speaking for ourselves, there were really no surprises in the Adcom. I mean, the tone of the Adcom was surprising, as I'm sure anyone listening to it would have agreed at times. But actually, in terms of the content, the FDA's contribution, the issues that were discussed, they were not surprising, and they were not something that we hadn't, to some extent, as fully as possible, anticipated.

[Charles Duncan, Analyst at Cantor Fitzgerald]

You don't feel like there was any real change in the FDA's perspective versus the guidance that was put out earlier?

[Guy Goodwin, CMO at COMPASS Pathways]

No, we certainly couldn't detect that, and we're simply content that our trials are running as they are on track and with all the considerations that we put into designing them. I think something that I can just add, sorry. I may just add, I mean, referring back also to Ritu's earlier question, I mean, essentially, I think what that showed us was that there's no special consideration or free pass for psychedelic trials. They are expected to be conducted to the same levels of rigor, safety data collection, and so on as any other psychiatry trials, and that's not a surprise to us.

[Charles Duncan, Analyst at Cantor Fitzgerald]

Probably consistent with the way you do things. Question on 005 versus 006, this may seem like naive, but can you just remind us as to what is the key question that is being asked in those trials? What would you like to see out of those trials to encourage you that you have a drug that's really novel?

[Guy Goodwin, CMO at COMPASS Pathways]

Well, that, of course, is a great question. 005, we would like to see separation from placebo. Other studies have demonstrated that. We would like to do the same. But essentially, we would need to continue to demonstrate safety in that study and safety against a placebo baseline. That's really what it will deliver for us. Our 006 study will essentially, if successful, replicate what we saw in 001, the phase II study, which I think was a dramatic demonstration of a dose-response effect. And what we would hope to see is whether or not adding a second treatment actually substantially increases remission and response rates. And if that happens, that will also be great news for patients.

[Kabir Nath, CEO at COMPASS Pathways]

And then taken together, Charles, is durability. Clearly, that's a question that we didn't answer in 001 beyond 12 weeks. So that's another key element, particularly out of 006.

[Charles Duncan, Analyst at Cantor Fitzgerald]

Yeah, and that durability is of interest to a lot of people, and appreciate your good retention comments to the last question. Thanks for taking our questions.

[Guy Goodwin, CMO at COMPASS Pathways]

Thanks, Charles.

[Operator]

Thank you. Our next question comes from the line of Vikram Purohit with Morgan Stanley. Please proceed.

[Vikram Purohit, Analyst at Morgan Stanley]

Hi, good morning. Thank you for taking our questions. We had two: one on the pivotal program and TRD, and then one on the pipeline. So for 005 and 006, it sounds like near the end of the year and then middle of next year, we'll be getting the six-week primary endpoint data. But I was curious when the longer-term follow-up data from both studies might be communicated publicly. And then secondly, on the pipeline, could you just remind us where next steps and your thoughts on development plans stand for both PTSD and also potentially bipolar disorder? Thank you.

[Kabir Nath, CEO at COMPASS Pathways]

Thanks, Vikram. So you're right reconfirming those dates that you mentioned for the 6-week primary endpoints. We haven't talked about when we could expect the 26 weeks, but simply projecting the additional 5-6 months of data, you can imagine that that's when we would be releasing both of those, but we haven't specifically confirmed that to this point. Regarding PTSD, yeah, we continue to believe that that was a very interesting signal that we showed in what was a small open label study. So we are developing some designs, some protocols around that. We're taking external advice also. And as you're aware, though, the current runway does not contemplate an additional study or set of studies in PTSD, but we're continuing to do the work around what that could look like.

[Kabir Nath, CEO at COMPASS Pathways]

Bipolar disorder obviously remains of great interest to us, but I think it's a rather lower priority at the moment compared to PTSD.

[Vikram Purohit, Analyst at Morgan Stanley]

Understood. Thank you.

[Operator]

Thank you. Our next question comes from the line of Gavin Clark-Gartner with Evercore ISI. Please proceed.

[Gavin Clark-Gartner, Analyst at Evercore ISI]

Hey, guys. Thanks for taking my questions. First, are you able to see the rates of retreatment in part B of both of the trials? And is that rate different between the two trials?

[Guy Goodwin, CMO at COMPASS Pathways]

In principle, we can see raw rates. We haven't compared them to this point.

[Gavin Clark-Gartner, Analyst at Evercore ISI]

Okay. Are you planning to share the overall rates of retreatment at any point prior to the top line? And should we also expect that with the top line release?

[Guy Goodwin, CMO at COMPASS Pathways]

I don't think so. These are details that we'll obviously make available in due course, but there are considerations around announcing the top line data relating to blinding, which make it important that we don't cause too much interest in the data, for example, from patients themselves.

[Gavin Clark-Gartner, Analyst at Evercore ISI]

Got it. What's the overall rate of rescue therapy use? Where's that tracking in both of the trials?

[Guy Goodwin, CMO at COMPASS Pathways]

You mean rescue on the day of administration of the drug?

[Gavin Clark-Gartner, Analyst at Evercore ISI]

No, just during the blinded portion of the trial, like starting another medication.

[Guy Goodwin, CMO at COMPASS Pathways]

Oh, okay. Yeah. Well, I mean, oh, I see. No, we're not tracking that as a group, no. I mean, essentially, we are blind to the details of the study for obvious reasons.

[Gavin Clark-Gartner, Analyst at Evercore ISI]

Got it. Thanks.

[Operator]

Thanks. One moment for our next question. It comes from the line of François Brisebois with Oppenheimer. Please proceed.

Hi, this is Dan on for François. Thanks for taking my question. Just a quick one from us. Regarding the Lykos Adcom, one of the focuses was the challenge of disentangling the contribution of psychotherapy to the efficacy of the drug in Lykos' case. In the case of 005 and 006, of course, there's no formal psychotherapy in the trials. Could you talk about your thoughts regarding the FDA commentary around that?

[Guy Goodwin, CMO at COMPASS Pathways]

Yes. I mean, my understanding originally was that the FDA had approved the design of the study, which, of course, was placebo versus the doses that were eventually used, and so that they were accepting the idea that a drug could enhance the psychotherapy. I think it introduces complexity, which is what was discussed in the Adcom. But I think, frankly, we have to wait for what the FDA actually decides. We don't really have clear guidance on what that will be, obviously. We think that we're in a different category. We are not providing a psychotherapy. And so the question of whether a drug versus placebo or one dose versus another is a much simpler decision in terms of deciding efficacy. And I think that's where we rest our current understanding.

Thank you.

[Operator]

Thank you. Our next question comes from the line of Sumant Kulkarni with Canaccord Genuity. Please proceed.

[Sumant Kulkarni, Analyst at Canaccord Genuity]

Hi. Thanks for taking our questions. I have two. So given how important the durability of treatment effect is, especially within the psychedelic therapeutics context, how is COMPASS specifically ensuring that patients don't have any undue use of other treatment modalities or therapeutics post-dosing in your phase III trials? Because such instances have the potential to obscure durability that could be directly attributable to COMP360 treatment.

[Guy Goodwin, CMO at COMPASS Pathways]

Yeah, I mean, that's a great question. I mean, I think we await to see. We are collecting data about co-administration of other drugs throughout the follow-up phase. So we will be able to observationally tell you what the rates are. Actually actively preventing discouraging patients is obviously difficult. It's simply understood in terms of how the patients give consent, but that's not an objective of the study. But clearly, if there is a clinical need, patients will receive other treatments. The thing we have to do is to follow what they are and really work out to the extent to which it really is something that is required for the group patients we saw. In the highly responsive patients in 001, we did not see high rates of treatment seeking outside of the trial in up to 12 weeks.

[Guy Goodwin, CMO at COMPASS Pathways]

We obviously are going much longer, and we will be better informed when we complete the current study.

[Kabir Nath, CEO at COMPASS Pathways]

Just to be clear, Sumant, I mean, patients do, in theory, commit to no subsequent use of psychedelics. I mean, that is an inclusion criterion, and it's part of the informed consent. But clearly, we need to monitor that.

[Sumant Kulkarni, Analyst at Canaccord Genuity]

Understood. The second question is more because investors tend to be hyper-focused on the topic of suicidal ideation. How well-studied is this topic when it comes to recreational users of psilocybin? For example, there was a 2022 paper out of Harvard on 400,000 or so U.S. adults that were in the U.S. National Survey of Drug Use that were characterized as "lifetime users of MDMA or psilocybin," and both psychological distress and suicidal thoughts were found to have reduced odds in that population.

[Guy Goodwin, CMO at COMPASS Pathways]

Yeah, well, I couldn't summarize the data better than you just did. I mean, that is what the finding is, and that, of course, is widely believed. There are, of course, slightly smaller studies which are concentrated on prospectively identifying people who are going to go and have a psychedelic experience, various kinds. And those studies have shown similarly that there tends to be a reduction in distress, which is associated with acute use of the drugs, not just lifetime under recreational conditions. But of course, we are not really very interested in that. We are interested in how we deliver this as an effective treatment for patients who have experienced difficulties in getting better with other approaches. So our focus is very much more on the clinical experience, as you will understand. But it forms useful safety background, I agree.

[Sumant Kulkarni, Analyst at Canaccord Genuity]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Tom Schrader with BTIG. Please proceed.

[Thomas Shrader, Managing Director at BTIG]

Good morning. Thanks for taking the questions. I wanted to ask Charles' question in a slightly different way. As we've talked to people about the panel, there was a fair bit of surprise with all the focus on blinding. A lot of people thought the FDA was pretty comfortable with that, and you certainly gave a very clean description. Do you agree with that, that maybe that wasn't expected?

[Guy Goodwin, CMO at COMPASS Pathways]

Well, I think I can only answer whether I expected it. And to be honest, I did expect that to come up because it so frequently comes up when I hear, frankly, non-experts discussing these trials. It is something that a lot of people have got their teeth into, and so it's something that people want to discuss. As you may be well aware, it's not an exact science to define what the effect of unblinding is in different studies. And so it's often an argument based on very insecure basis, in fact, but it's certainly something that gets people's energies up. And as you see, it certainly caused a lot of energy to be expended in that meeting.

[Thomas Shrader, Managing Director at BTIG]

My quick PTSD follow-up. As we've talked to people, how de-risking do you think the PTSD data is on the safety front? People think that the likelihood of a bad experience is much higher in PTSD. So are you confident that you've seen really negative experiences and negotiated your way through them, or is 22 patients still too small? Thank you.

[Guy Goodwin, CMO at COMPASS Pathways]

I think 22 patients are still too small. In addition, they were quite a highly selected group. So these were patients with adult trauma. It excluded people with what is sometimes called developmental trauma, childhood trauma. And these people often have had much more difficult lives and much more chronic problems. And some of those patients, that sort of patient, were in the Lykos studies, in fact. So we would want to be cautious about how we develop our program, and that's why we're going to take advice on it. But certainly, what we saw was very encouraging from an efficacy and a safety perspective. That's all we can say at the moment. But it is undoubtedly for some patients with PTSD, we think this has got high potential.

[Thomas Shrader, Managing Director at BTIG]

Great. Thank you for the answers.

[Operator]

Thank you. Our next question comes from the line of Elemer Piros with Roth MKM. Please proceed.

[Elemer Piros, Analyst at Roth MKM]

Yes, good morning. So Kabir, I think you originally set out to identify and engage 150 sites in 12 different countries. Where do you stand with that number? And do you think that you have the right number of sites to complete these 2 trials?

[Kabir Nath, CEO at COMPASS Pathways]

Yeah, thank you. So that number of sites is across both 005 and 006. And it divides roughly 40 in 005 and the remainder in 006. So clearly, 005, and again, as a reminder, 005 is U.S. only. So clearly, all those U.S. sites are up and running in 005. There are some U.S. sites up and running already for 006, but a number of the 005 sites will roll into 006 in due course. Ex-U.S., we now have sites up and running in the UK, Ireland, Canada, France, Spain, Sweden, and some other countries still to come. And I would say we are, as we reconfirm the expectation for six-week endpoint on 006, we're exactly in line with where we expect it to be in terms of bringing those sites online.

[Kabir Nath, CEO at COMPASS Pathways]

Ultimately, just to push further, it's sometimes asked, in 006, we ultimately expect the disposition of patients to be roughly 50% US, 50% ex-US.

[Elemer Piros, Analyst at Roth MKM]

Thank you very much for that detail. You also have an MDD trial ongoing. Is there a chance that that trial, I think it's roughly 100 patients, would read out before 005?

[Guy Goodwin, CMO at COMPASS Pathways]

I don't think that's very likely, Elemer. But you never know. If recruitment goes very well, it's possible. But as you know, it's primarily designed to look at PKPD in this population. I mean, it will be of great interest as an MDD study, but I think it's unlikely to read out before 005, pardon me.

[Elemer Piros, Analyst at Roth MKM]

Thank you very much, Guy.

[Operator]

Thank you. As I see no further questions in the queue, I will turn the call back to management for closing remarks.

[Guy Goodwin, CMO at COMPASS Pathways]

Thank you, everyone, for participation on today's call. As we said, we continue to make good progress. We are very focused, as you can understand, on 005 and 006, and continuing to do everything we can to ensure quality execution, that we have the right patients in those trials, and that we are able to bring forth really robust data at the appropriate time point. Thank you for your participation, and look forward to seeing you all in the next quarter.

[Operator]

Thank you all for participating in today's conference. You may now disconnect.

Participants

Analysts

• Charles Duncan, Analyst at Cantor Fitzgerald
• Elemer Piros, Analyst at Roth MKM
• Gavin Clark-Gartner, Analyst at Evercore ISI
• Guy Goodwin, CMO at COMPASS Pathways
• Kabir Nath, CEO at COMPASS Pathways
• Leonid Timashev, Analyst at RBC Capital Markets
• Ritu Baral, Analyst at TD Cowen
• Stephen Schultz, SVP of Investor Relations at COMPASS Pathways
• Sumant Kulkarni, Analyst at Canaccord Genuity
• Teri Loxam, CFO at COMPASS Pathways
• Thomas Shrader, Managing Director at BTIG
• Vikram Purohit, Analyst at Morgan Stanley