Earnings Call Transcript - CMPS Q3 2025

Operator, Operator

Good morning, everyone, and thank you for being here. My name is Kelvin, and I will be your conference operator today. I would like to welcome you to the COMPASS Pathways Third Quarter 2025 Earnings Call. Now, I will turn the call over to Stephen Schultz, Senior Vice President of Investor Relations at COMPASS Pathways. Please proceed.

Stephen Schultz, Senior Vice President of Investor Relations

Welcome, all of you, and thank you for joining us today for this quarterly conference call. 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, and Teri Loxam, our Chief Financial 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 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 statements even if our estimates or assumptions change. I will now hand the call to Kabir Nath.

Kabir Nath, CEO

Thank you, Steve, and thank you all for joining us for today's call. We are very excited that COMPASS continues to make excellent progress on all fronts, in particular, the potential 9- to 12-month acceleration of our launch plans that we announced today. Our first Phase III trial, COMP005, demonstrated a highly statistically significant result for the primary endpoint in June, which was an important derisking event for the company. It was also a clinically and commercially meaningful result which points to the potentially differentiated profile that is emerging for COMP360. We're looking forward to the remaining data from our ongoing Phase III trials, especially from the second Phase III COMP006 trial with its 2 fixed doses, which will be important to help inform dosing for labeling. Enrollment for the 006 trial continued to accelerate throughout the summer. And today, we're pleased to announce the completion of enrollment. This is great news, since it clarifies timing for the remaining Phase III data disclosures and gives us line of sight to our potential filing time line. Following the data readout in June, we had a positive and collaborative interaction with the FDA on our filing strategy for COMP360 in TRD. We're encouraged by their support for acceleration of the planned NDA filing, including the potential for a rolling submission. To enable this, we now plan to unblind 9-week data from Part A of the 006 trial and disclose it concurrently with 26-week data from the 005 trial in Q1, which is likely to be in the later part of the quarter. The 26-week data from COMP006 is now expected in early Q3 next year, which we anticipate will be the last gating item to complete our NDA submission. Given the accelerated time lines, we are also pulling forward our launch readiness, building on the significant progress we've already made over the last couple of years. With our strategic collaborations across a variety of care settings and our medical science liaisons interactions with KOLs, we've been very active in developing an extensive understanding of the commercial landscape and of provider sentiment and dynamics. We've generated valuable learnings that we're incorporating into our launch plans, including insights into patient preference, patient flows and provider economics which have helped us understand how COMP360 will be differentiated from current and future treatment options if approved. We're encouraged by the continued increase in interventional psychiatry infrastructure over the past few years, driven both by SPRAVATO and the excitement around the potential promise for psychedelic treatments such as COMP360 in the future. The learnings we've gained through our commercial work strengthen our confidence that COMP360, if approved, can be effectively integrated into the growing interventional psychiatry infrastructure and offer a differentiated and compelling treatment option for patients and providers. With significant learnings already incorporated, we are confident that we will be ready to launch on an accelerated time frame which is great news for the estimated 3 million individuals in the U.S. living with TRD. Beyond TRD, we're also finalizing the design for a late-stage PTSD trial following constructive interaction with the FDA. We look forward to updating you further on that program in the near future. As you can see, these are exciting times for COMPASS, and we are focused on translating our progress into real-world patient impact as quickly as possible as the need remains urgent. With that, let me turn it over to Teri.

Teri Loxam, CFO

Thank you, Kabir. At the end of September, we had cash and cash equivalents of $186 million compared with $222 million at the end of the second quarter. We have continued to be disciplined in our spending, which has allowed us to maintain our cash runway into 2027. Debt under the Hercules loan facility was $31.3 million at the end of the third quarter. Cash used in operations for the third quarter was $35 million, and we expect net cash used in operations for the full year 2025 to be between $120 million and $145 million. This range includes the amount receivable in respect to the R&D tax credit in the U.K., the timing for which is uncertain. As Kabir mentioned, our entire team is focused on strong execution, completing both of our Phase III trials, preparing for our NDA submission and continuing our commercial preparations. We have added resources to our regulatory team to ensure we're moving our NDA filing activities forward as quickly as possible, and we have also pulled forward select commercial activities to meet our new accelerated time lines. We are confident in the emerging profile for COMP360 and its potential to transform the landscape for those living with TRD and PTSD through a potentially rapid and durable treatment option, reinforcing our leadership in the field of psychedelics. As mentioned at the beginning of the call, Lori Englebert and Dr. Steve Levine will also be available for the Q&A. Thank you, and I'll now turn the call back to the operator for Q&A.

Operator, Operator

Your first question comes from the line of Josh Schimmer of Cantor.

Joshua Schimmer, Analyst

Congrats on the update and timelines. Quick question about the selection of specialty pharma partner you may use to kind of support patient access. Have you identified any that you would anticipate moving forward with? And would there need to be any unique capabilities that they have in terms of offering those patient support services to psychiatrists who would be interested in prescribing psilocybin?

Kabir Nath, CEO

Thanks, Josh. It's Kabir. Just checking that you can hear us.

Joshua Schimmer, Analyst

Yes, loud and clear.

Kabir Nath, CEO

Let me pass that to Lori.

Lori Englebert, Chief Commercial Officer

Thanks for the question, Josh. We have not made a selection yet as it's a bit too early for that. However, as Kabir mentioned, we have already done significant work in understanding the distribution pathway to these treatment centers and how that might work. As we start to accelerate these activities, you can expect that we will begin to narrow down the options in the coming months. Regarding your question about any special requirements, we are examining what may be needed to support patients once we reach the market, but there should be nothing unfamiliar for psychiatrists.

Joshua Schimmer, Analyst

Okay. Got it. And then if I may ask one other quick question. You mentioned that sites that are able to administer SPRAVATO currently should be able to administer COMP360. Does that apply to every single site? Or what incremental changes to the office or practice might be needed to incorporate COMP360 into the 6,000 or so sites capable of delivering SPRAVATO currently?

Steve Levine, Chief Patient Officer

Josh, thanks for that question. It's Steve Levine. The short answer is that we would expect that any site that is delivering SPRAVATO today would be capable of delivering COMP360, if approved. That doesn't mean that it's necessarily one for one in the implementation, but it's exactly why we're doing the work we are with the collaboration sites or strategic collaborations to understand what any incremental changes might be needed. But in terms of the physical infrastructure, the staffing, the capabilities, those all port over directly from their current experience with SPRAVATO.

Operator, Operator

Your next question comes from the line of Paul Matteis of Stifel.

Paul Matteis, Analyst

Regarding the FDA meeting, I believe you mentioned earlier that you would be sharing the same level of detail on the 005 data with the agency that we have already seen. Do you think there is a need for another FDA engagement after you provide this more detailed data early next year? Additionally, could you clarify your expectations for the 26-week data? What would you consider a positive outcome in terms of the frequency of retreatment or response rates that would meet your target product profile in relation to durability and commercial viability and scalability?

Kabir Nath, CEO

Thanks, Paul. So yes, on the first one, you're right. From a data perspective, we have no more data in hand. But clearly, we were able to share with the agency some of what we've announced today in terms of timelines, where we were with 006 and so on. So there was information that we were able to share at that point with them. To your point, absolutely, we would expect with the significant data readouts in quarter 1, that would indeed be the point for another meeting with the agency really to align fully on the plan going forward in terms of rolling submission, what's going to be reviewed when and so on. So yes, that is absolutely the case. For the profile, I'll actually hand to Lori to talk a little bit about that. And again, though, I'd just remind you, contextualize, we are now going to be announcing 26 weeks from 005 together with the 9-week data from 006.

Lori Englebert, Chief Commercial Officer

Yes. Paul, thanks for the question. So what we expect to see, and let me just remind you, in order to achieve equivocal efficacy to SPRAVATO, SPRAVATO patients need to receive 8 to 10 treatments to our one that was already demonstrated at the 6-week timeline. So already, we are quite differentiated from what's available to TRD patients right now. Everything we see in the 26-week data will only help accentuate what the clinical profile of the product is going to be. And I do want to just caveat that the 005 26-week data that we will release in quarter 1 is after one administration. The 2 administrations that we will see with 006, we will also really be looking forward to what that profile looks like at the 26-week data for 006. In terms of commercial liability, as I mentioned, we're already highly differentiated with the one administration getting such profound efficacy in a TRD indicated population. So anything on top of that in terms of durability will help accentuate that product profile.

Operator, Operator

Your next question comes from the line of Judah Frommer of Morgan Stanley.

Judah Frommer, Analyst

Congrats on the progress here. Just curious if any of the interactions with the FDA included conversation around submissions for the commissioner's priority review application. I think you had said at some point, you did have interactions with the agency on that submission. And if not, has the agency pointed toward TRD versus PTSD in any way being higher areas of unmet need in their view?

Kabir Nath, CEO

Yes, thank you, Judah. We applied for a CNPV, and we know that many companies have done the same. There was some interaction, and while we have seen the initial list, we understand that the commissioner mentioned more might be forthcoming. Our discussions with the division have yielded very positive feedback, indicating there is momentum. From the agency's perspective, both TRD and PTSD are viewed as critical areas needing new treatment options. At the agency level, as opposed to the political level, there doesn't seem to be a distinction between them. We are clearly the furthest along with our TRD program, and we have established a strong relationship with the agency, which recognizes the urgency of advancing this, contingent on data.

Judah Frommer, Analyst

Okay. Maybe just a quick follow-up. Any interaction or commentary from the VA within these agency conversations? Or do those kind of weigh on their decision-making there?

Steve Levine, Chief Patient Officer

So I don't think we could comment on how the VA and FDA interact, but I'll turn to Steve to talk about our interactions with the VA kind of independent of that. Thanks, Kabir. Judah, we have been regularly engaging with the VA for quite some time now. About a year to a year and a half ago, the VA established an integrated project team that is focused on early planning for the implementation of psychedelic treatments, pending approval. This team includes senior leadership from the Office of Mental Health at the VA. We have been in frequent contact and have provided them with numerous resources to help guide their preparations for ensuring access within the VA once approvals are granted. Overall, these interactions have been very positive.

Operator, Operator

Your next question comes from the line of Gavin Clark-Gartner of Evercore ISI.

Gavin Clark-Gartner, Analyst

Congrats on the update. So by presenting the 006 data at 9 weeks, do you risk the integrity of the study in any way? Like I know that was part of FDA discussions previously. So I'm curious what led regulators to change their stance? And also curious if by presenting this data at an earlier time point, do you lose the commercial ability to make claims around the durability of the 2-dose regimen?

Kabir Nath, CEO

No. To clarify, Gavin, it was our decision previously to change the guidance from disclosing Part A of 006 to only providing the 26-week data due to the significant confusion and commentary surrounding Lykos at that time. A few things have become clearer. First, the published CRL does not identify functional unblinding and expectancy as a major issue; there were several other deficiencies noted. Second, we will have the majority of patients through Part B of 006 by the time we release data from Part A. From our viewpoint, this does not compromise what we might observe in Part B, which will also be essential for our claims. Lori, would you like to add to that?

Lori Englebert, Chief Commercial Officer

No, I agree. And just a reminder, it is double blinded through 26 weeks. So as we present that data to the agency, there should be no hesitation in terms of how we promote based on that data.

Gavin Clark-Gartner, Analyst

All right. Great. That is super helpful. And just a separate topic. What's your current assumption for how the label or the REMS may read on monitoring requirements? Like specifically, I'm wondering if a single versus a group room may be required and if one health care provider can monitor multiple people simultaneously and if any of this was discussed in the Type B.

Steve Levine, Chief Patient Officer

Thanks, Gavin. It's Steve Levine. It's a great question. I think what you should anticipate is that the label or REMS will not necessarily get into granular detail about the practice of medicine and the delivery of treatment to patients, so much as describing how the studies were conducted. It would be expectable that at the time closest to launch, most sites would likely deliver this treatment in the most conservative way possible with one patient occupying a private room as SPRAVATO was often delivered today. But also taking lessons from SPRAVATO, it's also likely that as clinicians gain more experience and comfort with delivering COMP360, they likely will find additional efficiencies in delivering it and that could include group administration. It could include rooms with curtain bays, et cetera, ways that allow them to move patients efficiently through their centers. And this is also work that we've been exploring in some early work with our strategic collaborations.

Operator, Operator

Your next question comes from the line of Chi Wen Chin of TD Cowen.

Chi Wen Chin, Analyst

This is Athena Chin on for Ritu. Could you please review the state of your commercialization preparation for 360 and provide more color on what activities you pulled forward given the accelerated timelines? And then I have another follow-up.

Kabir Nath, CEO

Thanks, Athena. I'll hand that to Lori.

Lori Englebert, Chief Commercial Officer

Athena, thanks for the question. So as Kabir mentioned in the prepared remarks, we have done some really incredible work over the past couple of years, specifically with our strategic collaborations as well as our MSLs and then a whole host of other critical components of commercial preparation such as government affairs, HEOR, we've done some market access for all of that to get prepared for a real solid understanding of what strategy should be. What that actually means is that we understand the marketplace landscape, we understand where the prescribers are, how we might want to ensure that they can seamlessly integrate COMP360 into their treatment practice as it stands today. What we will pull forward and start shifting to is your more fundamental traditional commercial activities like marketing, messaging, figuring out how to structure a sales force, getting an IT infrastructure set up and prepare to ingest data as the sales reps are out in the field. And of course, a lot of that comes with also some market access and payer discussions around the potential to reimburse the product. So we are pulling those forward by several months. And obviously, a lot of that will be contingent, especially the payer discussions will be contingent upon the durability data and a complete understanding of what the 006 data looks like so that we can put together a very nice picture for what the full clinical profile of COMP360 will be to engage in the payer discussions. But a lot of that does not contingent upon doing marketing activities and sales force sizing and things like that to prepare. So we will be ready based on the fact that we have a very strong strategy in place, and we are just pulling forward some of the execution activities.

Chi Wen Chin, Analyst

Got it. And on the filing, are there any outstanding drug liking requirements that are needed or ongoing? And when can we expect those to complete?

Kabir Nath, CEO

No. As we mentioned on the call, we expect the 26-week data from 006 to be the final requirement. Everything else related to preclinical, CMC, stability, and so on will be well in hand before that. There will be no other outstanding requirements.

Operator, Operator

Your next question comes from the line of Patrick Trucchio of H.C. Wainwright.

Patrick Trucchio, Analyst

The first question is just on the Type B meeting with the FDA. I'm wondering if there was any change from what had been discussed previously. Or just has the agency's tone or the way that they're talking to you about COMP360, has this changed from what you've heard previously, and particularly as it relates to the potential for the rolling submission and how we should think about that? And then I have a few follow-ups.

Kabir Nath, CEO

Yes, I appreciate the question, Patrick. I want to emphasize that we maintain an excellent relationship with the division. We have had breakthrough designation for several years, which has facilitated regular communication. It's been evident for a while that the division recognizes the potential of psychedelics in COMP360 and acknowledges the need for it. However, they will continue to uphold the high standards they have always maintained, and we are fully committed to those standards as well. Traditionally, the psychiatric division may not have been as proactive regarding rolling submissions compared to other divisions. Nonetheless, I can share that there was encouragement and a very positive atmosphere in our recent meeting, reflecting a slight change in tone, but this occurs within the context of a long-standing strong and supportive relationship.

Patrick Trucchio, Analyst

Right. And then as we look ahead, first, is it still the anticipation that there would be an advisory committee? And as you prepare for this anticipated outcome, what key elements of the submission or support model would address questions around safety, support, mechanism of action, any of these other questions? And maybe also as this relates to learnings from that published CRL? And then separately, just on the commercial front. I think in the past, you've said there are roughly 6,000 interventional psychiatry centers capable of administering multi-hour treatment. So I'm wondering, at the time of launch, what proportion of those would be certified and able to deliver COMP360.

Kabir Nath, CEO

Okay. I will pass this to Steve in a moment. Regarding the question, it's ultimately up to the FDA to decide if they want an advisory committee, which will depend on when they receive the data package for review. I can assure you that we will be prepared for that situation. We anticipate it might occur, and we are gearing up for it. Everyone now has access to the Lykos CRL, which is beneficial. We've conducted a thorough job of collecting data on side effects, including positive side effects like euphoria. Therefore, we have the necessary data to evaluate the risk-benefit profile of COMP360 as expected for any medication. Additionally, the individual present during the procedure is there solely for safety purposes, not to direct the therapy or intervene. They have been trained in a standardized protocol that is consistent across all study arms. We are sampling that to ensure it aligns with the education we've provided. As time progresses, we will review our strategy and preparations regarding the specific concerns identified by the agency for Lykos and others. Regardless of the circumstances, we will be ready for an advisory committee. Steve?

Steve Levine, Chief Patient Officer

Yes, this is Steve Levine. And as far as the second part of your question about the readiness of these SPRAVATO interventional infrastructure to deliver COMP360 at launch, within our strategic collaborations, there already is a high representation of this concentrated delivery network that delivers SPRAVATO today. But additionally, the bidirectional information exchange that happens within these collaborations helps us to not only understand how to best support these sites and patients at these sites so that they can be activated to deliver our treatment. But because they share characteristics with other interventional psychiatry practices, it allows us to build templates to also be ready to support them. But you'll also note that this network of collaborations isn't exclusively interventional psychiatry. It really reflects the diversity of sites of care where patients living with treatment-resistant depression receive their care today. And although we would expect that some of the earliest adopters would be the interventional psychiatry sites, we are committed to broaden equitable access and that means enabling access in a broader array of treatment sites.

Operator, Operator

Your next question comes from the line of Sumant Kulkarni of Canaccord Genuity LLC.

Sumant Kulkarni, Analyst

Nice to see all the progress. I have a couple. As a point of clarification, what is the key variable that has allowed you to bring forward your timeline for commercialization by 9 to 12 months? Is that related primarily to an ability to submit an NDA for COMP360 for treatment-resistant depression ahead of your original plans? Or is it something else? And second, is it fair to assume that you would need to have the Part A from COMP006 and Part B from COMP005 in hand to initiate a rolling NDA submission?

Kabir Nath, CEO

Thanks, Sumant. A few points to highlight. First, the enrollment for study 006 has been completed ahead of our expectations. We were initially guiding towards the second half of 2026 for the 26-week data from 006, but we have now revised that timeline to early Q3, which gives us several months of advancement. The progress of 006, especially over the summer with strong performance from European sites, has significantly contributed to this acceleration. Additionally, we may have the opportunity for the agency to begin reviewing some modules as part of a typical rolling submission process, allowing us to submit preclinical data and CMC information before the full clinical data package is complete. There were some clarifications regarding this in the meeting. As you mentioned in your earlier question, we anticipate another meeting with the agency in the first quarter, where we will present the 26-week data from study 005 and the 9-week data from study 006. This meeting is expected to help formalize our future plans.

Operator, Operator

There are no further questions at this time. And with that, I will turn the call back to the management for closing remarks. Please go ahead.

Kabir Nath, CEO

Thanks, everyone, for participating today. As you've heard, we are extremely excited about this potential acceleration of 9 to 12 months, really based both on our execution around 006, also a good positive dialogue we've had with the agency as well as the decisions we've made about unblinding 006 data in the first quarter of next year. I'd remind you again that we will be talking about PTSD in due course. We're excited about that. We have actually now finalized the protocol on that. We have selected a CRO, the protocol is with them for costing and so on. And so we look forward to announcing that and getting on with that with the potential to have first patient in that in the first quarter of next year as well. So very exciting times for COMPASS. We're thrilled with where we're at. We are ready to move on that accelerated timeline. As you've heard from Lori and Steve as well today, a lot of activity on the commercial front, building on the learnings we already have. So we're looking forward to a very engaged and active next 12 to 15 months. Thanks, everyone, for taking part today.

Operator, Operator

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect.