Earnings Call Transcript - CMPS Q3 2024

Operator, Operator

Thank you for standing by. My name is Louella and I will be your conference operator today. At this time, I would like to welcome everyone to the COMPASS Pathways' Third Quarter 2024 Investor Call. Thank you. I would now like to turn the call over to Steve Schultz, Senior Vice President of Investor Relations. Please go ahead.

Steve Schultz, Senior Vice President of Investor Relations

Welcome all of you and thank you for joining us today for our third quarter 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; Lori Englebert, our Chief Commercial Officer; and Teri Loxam, our Chief Financial Officer, who will be giving prepared remarks as well as Dr. Guy Goodwin, our Chief Medical Officer; and Dr. Michael Gold, our Chief R&D Officer, who will join us for 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 statement even if our estimates or assumptions change. I'll now hand the call over to Kabir Nath.

Kabir Nath, CEO

Thank you, Steve. Good day, everyone and thank you for joining us. Let me begin by welcoming Lori to her first quarterly call with COMPASS. As I said on our August call, we're pleased to have such an exceptional leader join the company and round out our executive team. Lori brings deep strategic and commercial experience, having most recently launched AUVELITY at Axsome. That experience will be valuable as we prepare for the commercialization of COMP360, and we're thrilled she has joined us. In a moment, I'll ask Lori to update you on the commercial landscape and our commercial preparation, which we know are areas of major interest and focus for our investors. And as usual, Teri will provide you with a financial update. First, though, I want to address questions around the anticipated disclosure of our pivotal COMP360 trials. On our August earnings call, we pushed the anticipated 6-week disclosure date for the COMP005 trial back to the end of this year or early next year. Based on our recruitment to date, it now looks unlikely that we will be able to disclose the 6-week data in the first quarter and we're therefore updating our guidance for the 6-week 005 data to the second quarter of 2025 to give us more assurance. Our top priority is completing our Phase III trials and we’re doing everything we can to ensure that sites recruit as quickly as possible while maintaining the integrity and quality of the trial. Mike Gold, who came onboard in May, has significant drug development experience in neuroscience and is spending much of his time on the ground with the sites, which has given us new insights into some of the challenges and helped us to refine our plans. We’re the first company to conduct such large psychedelic trials, and we did not have the benefit of prior comparable Phase III timelines to base our assumptions on. Our Phase III enrollment projections were based on the Phase IIb enrollment curve, and while we did factor in some new aspects of the Phase III trials into our projections, there have been a number of items related to the complexity of the trials that we’re now learning along the way. The Phase IIb was a simpler protocol with all active arms, a single dose unblinded for just 12 weeks. COMP005, on the other hand, is a 52-week trial blinded for the first 26 weeks and has multiple parts where additional doses can be given, which significantly increases the logistical complexity for sites to schedule patients and therapists as well as for patients themselves. These complexities are specific to the clinical trial setting but have resulted in experienced sites carefully managing patient flow as they become more proficient. Mike and his team are paying close attention to the needs of each site and are providing the necessary resources to support them on a case-by-case basis. This hands-on approach is working and we’ll be continuing to dedicate all our focus to successfully completing these trials. There continues to be significant demand from patients at the top of the funnel and it’s a matter of blocking and tackling and helping sites get patients through the process as quickly as possible. Beyond timing for the trial, we’re also frequently asked what data we will be disclosing with the 005 6-week data readout. Please remember that while the primary endpoint is at 6 weeks, the trial remains ongoing and blinded through 26 weeks. Therefore, we’re going to be limited in what we can release at 6 weeks so that we maintain the integrity of blinding as much as possible. We will disclose 3 key efficacy measures for the 6-week endpoint: the MADRS effect difference between the arms, p-value, and confidence intervals. We believe that these data should provide investors with a clear understanding of the treatment effect and if positive, provide an important validation of the positive Phase IIb treatment result. From a safety standpoint, we’ll provide a high-level assessment for the independent DSMB, which looks at unblinded data on a regular basis to monitor safety risks for patients in the trial. Suicidality is an inherent feature of TRD, and suicidal ideation is expected in this population. As part of the DSMB assessment at the time of the data readout, they will also comment on whether they’re seeing any imbalance in suicidal ideation. At this 6-week endpoint, we will not be able to provide secondary endpoints or in-depth safety tables as that would require further unblinding. Let me now turn to the COMP006 trial, which is our second Phase III trial. As a reminder, 006 has 3 active dose arms of 1 milligram, 10 milligrams, and 25 milligrams, with the same 3-part structure as 005, with the primary endpoint at the end of Part A at 6 weeks, a fully blinded Part B through 26 weeks, and an open-label Part C through 52 weeks. In the 006 trial, each participant gets 2 doses of COMP360 3 weeks apart at the start of the trial. The recent Lykos AdCom and the fact that they received a complete response letter provided key insights into the FDA’s thinking on some of the challenges faced by this new class of drugs. While most of the FDA and AdCom concerns were specific to Lykos and their MDMA-assisted therapy program, there was a high degree of scrutiny regarding unblinding which is very relevant to our studies. While both the 005 and 006 trials are blinded to 26 weeks, the 006 trial with its 3 active arms is designed to minimize the risk of unblinding as participants know they will receive a dose of COMP360. With a 15% cap on recruitment of patients with prior psychedelic drug experience, it will be difficult for the overwhelmingly psychedelic-naive participants to determine which dose they received, particularly between the 10- and 25-milligram doses which is what we saw with the overlapping responses between 10 and 25 milligrams in our Phase IIb trial. We believe that this is an effective strategy to maintain blinding, and given the importance of the 006 trial for COMPASS to gain valuable regulatory and commercial insights around redosing and durability, we want to ensure that we preserve that through the blinded portion of the trial. We therefore made the very difficult decision to further protect the blinding of the 006 trial and only release data after the 26-week time point has been reached for all patients. While recruitment for 006 has been going well so far at the sites that are up and running, we're still working through some site initiations in Europe, some of which have taken longer than projected. And we're also relying on a number of the U.S. sites from 005 to rollover to 006. Therefore, taking into consideration the shift of disclosure to the 26-week time point for 006 as well as potential unpredictability in recruitment, we now expect to disclose data for 006 in the second half of 2026. While we have a better understanding of the variables impacting enrollment, we’re continuing to actively consider all other opportunities to accelerate this trial. We remain fully confident in the potential impact psilocybin can have for patients. We want to do everything we can to ensure a successful development and regulatory outcome for COMP360, and we believe that these steps give us the best chance. In parallel to optimizing our regulatory strategy, we’re also focused on building a robust commercial strategy and adequately preparing the market for a potential paradigm-changing treatment, and that’s where Lori is focused. I’ll now turn it over to her to go through some of the observations since joining.

Lori Englebert, Chief Commercial Officer

Thank you, Kabir. Let me begin by saying what a privilege it is to be part of the COMPASS Pathways team. Our focus on advancing treatment options for patients with difficult-to-treat mental health conditions, especially for patients with treatment-resistant depression, or TRD, is an area I have a personal connection to and I am extremely passionate about helping deliver potential solutions for patients and their providers. By definition, treatment-resistant depression is an area of extremely high unmet need. About one-third of patients treated for major depressive disorder fail to achieve remission after 2 therapies and are therefore considered treatment resistant. Innovation and commitment to develop safe and effective products in this patient population has been limited. And currently, there are only 2 FDA-approved pharmacologic treatments with a TRD indication. If approved, COMP360 has the potential to change the way patients suffering from treatment-resistant depression are managed. And given the high unmet need in this patient population, we see a significant commercial opportunity. As I have been diving in at COMPASS, I have been impressed by many facets of the commercial work that are already underway, all important steps forward in preparing for launch success. These areas include ensuring appropriate billing codes are established to align with our administration model, preparing states for DEA rescheduling, KOL interactions, and investing in health economics research to prepare for future payer discussions. One additional area of important work is our bidirectional learnings through strategic collaborations with select interventional psychiatry networks. Through these collaborations, we have the opportunity to gain insights and learn from providers in various care settings within the delivery centers. Some of the key learnings include understanding current operating models, how they have adapted to support Spravato, and working with the sites to identify opportunities to scale the COMP360 operating model. Ultimately, we want to use the learnings from our collaborations to make sure that delivery centers can fit COMP360 into their current operating infrastructure at launch and are prepared to support what we expect will be significant demand for a new and novel treatment beyond today's current treatment options. An area of consistent feedback as we have been out in discussions with HCPs over the past year is just how much enthusiasm there is for the potential of COMP360 and how much providers want to be ready for it. One key question that investors have as well is whether the interventional psychiatry network is capable of managing sufficient demand for COMP360 at scale and how delivery centers will handle the monitoring time required. As I mentioned above, this is an area of focus with our collaboration partners and ongoing strategic planning but it is also worth noting, once Spravato came to market, it was a change for these centers as well in terms of patients needing to occupy rooms and monitoring requirements. Certainly, Spravato growth would suggest that these centers have adapted and are growing along with awareness and patient demand. As mentioned before, I've been impressed with the work to date. A great foundation has been established, and I look forward to advancing our approach to commercialization. We have work to do to determine exactly how we will optimize the commercial opportunity, but my team and I are committed to ensuring COMP360, if approved, can get to patients, and we will be working tirelessly to ensure the market is ready. I look forward to meeting with many of you in the future and providing additional insights as we progress and learn more. Let me now hand the call to Teri for the financial overview.

Teri Loxam, Chief Financial Officer

Thank you, Lori. I'll now step through the Q3 financial results. Cash used in operations in the third quarter was $22.2 million, which includes $13.6 million related to our 2023 R&D tax credit that we received in full in the third quarter but had not originally been included in our third quarter cash guidance as the timing was uncertain. Excluding this tax credit, cash used in operations would have been $35.8 million, which is at the midpoint of the range for guidance that we provided of $32 million to $38 million. Regarding fourth quarter 2024 financial guidance, we expect net cash used in operations to increase to between $37 million and $43 million, which would put cash used in operations for the full year 2024 between $114 million and $120 million, near the midpoint of our prior guidance and includes the 2023 R&D tax credit that we received this quarter and which had been contemplated in the original full year guidance. At September 30, 2024, we had cash and cash equivalents of $207 million. This compares with $228.6 million at June 30, 2024. Debt under the Hercules loan facility was $29.8 million at the end of the third quarter. Given the timing and strategic changes made to the Phase III readouts, we are taking actions to preserve cash and ensure our entire focus is on successfully completing the Phase III COMP360 trials as quickly as possible. Therefore, we will be reducing our workforce, including stopping our non-COMP360 preclinical efforts as well as the potential externalization of our digital tools. Over the last several years, we have developed digital tools and technology to test evidence-based methods for assessing mental health treatments. We are now exploring externalizing these technologies, intellectual property, and associated employees to a new company established by our co-founders that could potentially support an evidence-based approach for anyone developing and delivering mental health treatments for the benefit of patients. We are still working through the details and look to have a final decision on this externalization by Q1 2025. Collectively, these actions will result in a downsizing of the organization by approximately 30%. While we are still working through the full details and impact on cash, we expect our cash runway to fund operations at least into 2026. Thank you. And I'll now turn the call back to Kabir.

Kabir Nath, CEO

Thank you, Teri and Lori. We're applying the resources necessary to get these trials done as quickly as possible and best position COMP360 for regulatory and commercial success, and we continue to actively review all other ways to accelerate the 006 trial. As I mentioned earlier, Mike has been traveling to clinical sites to fully understand where assistance may be needed and directing resources to them. As we encounter challenges, we're addressing them rapidly and applying those learnings to the overall pivotal program. As Teri mentioned, we're also taking action to cut costs, further focus the organization and preserve cash. In saying that, I want to acknowledge that our actions today in reducing our workforce have much bigger implications for preserving cash. I know that they will have a deep impact on the lives of many employees and their loved ones. I regret that. And as a management team, we're committed to supporting them through this transition. With our 2 robust Phase III trials and our large Phase IIb trial, we'll have more than 1,000 patients' worth of data from well-controlled trials as well as a full package of supporting studies for a filing. We're confident that we're well positioned for success with a clear plan and a committed team to deliver on this plan. Thank you. And I'll now turn the call to the operator for Q&A.

Operator, Operator

Your first question comes from Ritu Baral with TD Cowen.

Athena, Analyst

This is Athena on for Ritu. Was your decision to move the top line readout made after additional FDA correspondence or a face-to-face meeting? And do you foresee any other changes to trial operations and conduct?

Kabir Nath, CEO

Thanks, Athena, it's Kabir. Can you just check, you can hear us clearly?

Athena, Analyst

Yes.

Kabir Nath, CEO

That was a decision made by COMPASS out of an abundance of caution after reviewing everything that occurred during the Lykos process and discussing internally about the need to maintain the blind for the blinded part of 006. As we mentioned during the call, we are continuously exploring ways to expedite the conduct of 006, and this will remain a priority for us.

Leonid Timashev, Analyst

I guess I'm trying to understand how the potential complexities in the trial recruitment may or may not have any impact on how COMP360 would be used in the real world. I guess, is this largely just due to limitations at staffing sites? Or is this something where booking the therapist, having all the appointments aligned is going to be a challenge for any initial commercial uptake? So are there any learnings as you go through the clinical process that might inform how you go about commercialization? Just trying to understand how much of this is also demand versus really just logistical steps.

Kabir Nath, CEO

No. Thanks, Leo. It's a really important question. The fundamental answer is that a clinical trial setting is clearly very different from a commercial setting in terms of what needs to be communicated to patients and so on. But let me ask Lori to elaborate on some of the key differences and how we're considering the commercial aspect.

Lori Englebert, Chief Commercial Officer

Yes. Leonid, thank you for the question. So as you know, clinical trials are intentionally onerous because they're working to fit within a regulatory construct. We do not anticipate that it will flow over to the commercial side. Most likely, what will happen in commercial operations when the product is approved is that physicians will be regulated based on what they're restricted by utilization management, formulary access, and things like that. From an operational standpoint, we are learning a lot from our clinical sites. We're also learning a lot from our key collaborations that we mentioned on the call. And a lot of that has to do with really optimizing the patient flow. And the way that I think about how we will go about optimizing the patient flow, which we’re learning from the clinical trials but is not necessarily analogous to the clinical trials, is that you have to think about it in 2 ways. One, you have to make sure that the patients are adequately being referred from referring physicians to the trial sites. That’s what's happening in the clinical trials. It will be a very similar situation in commercialization, we’re going to need to work very hard to make sure that physicians are adequately educated to make sure that they’re referring patients to the treatment centers. This requires education, this requires education on TRD. It’s really helping physicians identify the appropriate patients and really making sure that they understand COMP360's clinical benefit. This will all come very naturally through sales and marketing effort as we get closer to launch. The second piece of it, which I think is important for the underlying piece of your question, is ensuring capacity of patient flow at the treatment sites. You can think about this, in my mind, I think about it in 2 ways. You can either go broad and really have an inefficient process where you have a lot of treatment sites and not a lot of patients flowing through or you can think about how you might optimize the opportunity at your sites and really look at a real concentrated effort where you're optimizing opportunities to make that patient flow efficient at those treatment sites. And those are a lot of things we're learning from our collaboration partners. We're taking a look at opportunities there.

Charles Duncan, Analyst

Okay. Although I'm a little disappointed on timing, I do really appreciate the focus on maintaining rigorous clinical evaluation and ultimate regulatory success. So I have a question about what has changed over the course of the last 6 weeks? Have you discussed this with the agency in terms of 05? And is it possible that your regulatory strategy in terms of 05 and 06 being necessary has perhaps changed? Or do you have any other thinking about that?

Kabir Nath, CEO

Thanks for the question, Charles. And the short answer is no, nothing about our regulatory strategy has changed at this point. What has changed clearly is a decision around what data we disclose from 006 when but we would still anticipate the base cases that 005 and 006 are needed for a filing.

Charles Duncan, Analyst

Okay. And if you could provide a little bit of color on the enrollment patterns. Are you still feeling good about the ability to washout patients from antidepressant meds that are a standard of care? Or is that not a complexifier at all to the enrollment?

Kabir Nath, CEO

I'll pass that to Mike.

Michael Gold, Chief R&D Officer

We are seeing a washout rate of over 90% from standard care in our trials. We recently published a paper on this from the Phase II study. It’s not a logistical issue; however, it does require education for investigators and clinicians since there is some hesitation in informing patients about the washout process. Based on our trial observations, it's not a concern. We have not encountered a nocebo effect from the withdrawal, and we are currently achieving a washout completion rate above 90% in our trials.

Charles Duncan, Analyst

We saw that Journal site research paper was helpful. I appreciate that. Last question is with regard to 06 timing, the shift to 26 weeks seems like a year and yet that seems like it could be a little bit longer than you would expect just due to the shift. So is there also a modulation of enrollment or your confidence in enrollment in 06 as well?

Kabir Nath, CEO

Your maths is correct. What I would say is, as we said on the call, there is still some uncertainty around the recruitment curve. I think we're very confident, therefore, on the guidance we've given for the 26-week endpoint but we're doing everything we can to continue to accelerate both with the European sites and also with the expectation that as 005 finishes, those experienced sites that have done well in 005 will roll into 006, which will be an inflection point in that curve. So you're correct, it does incorporate an element of conservatism as well around moving from 6 to 26 weeks.

Teri Loxam, Chief Financial Officer

Thank you for the question, Charles. As we mentioned, we have $207 million in cash as of the end of the third quarter, which will last us at least until 2026. We announced a restructuring due to the delays, as the longer trials increase costs, and the anticipated savings from the restructuring are intended to offset that and help preserve cash. We are conducting a detailed analysis on potential savings and exploring whether additional savings could help extend our runway further, and we will be focusing on this in the coming weeks. We are confident that we will have cash at least until 2026, and we are dedicated to managing our expenses and spending wisely to ensure the success of COMP360.

François Brisebois, Analyst

I want to revisit a previous question regarding the distinction between clinical and commercial aspects. It appears that there is a clear difference, although the education regarding referrals in the commercial area will be similar. Can you help us understand why you maintain confidence in the sales potential? Additionally, what steps are required between the final data readouts and the launch? What would be a reasonable timeline estimate for that process?

Kabir Nath, CEO

Thanks, Frank. So I'm not quite sure I caught the second part of the question, what needs to be done in what context, sorry?

François Brisebois, Analyst

In context of launch between the final readouts now with the timeline pushes, just trying to understand if what else has to be done after these readouts to move forward to launch.

Kabir Nath, CEO

Sure. I'll pass that to Lori. Thanks.

Lori Englebert, Chief Commercial Officer

Certainly. I'll provide some clarity on your first question. The main inquiry we often receive from healthcare professionals we are in talks with, as well as those we are collaborating with and the trial sites, revolves around how to optimize the process.

Operator, Operator

We ask everyone to please stay on the line, we are having a technical issue. Thank you for your patience.

Lori Englebert, Chief Commercial Officer

Sorry, I think we're back. Can you hear me okay?

Operator, Operator

Yes, we can hear you now. You may go ahead.

Lori Englebert, Chief Commercial Officer

I was just getting going on my excitement for the commercial opportunity here. So I'm not exactly sure where we cut off but I'll revisit some of the reasons why I'm excited for COMP360. I think we have a lot of learnings to do. We have a lot of challenges that we'll need to overcome but we have time to figure those out. Being first to market takes time, and we will be first-in-class first to market, and that is a situation where you need a lot of time to think through strategy and planning. And so we have time to work through some of these complex issues that present themselves with the administration of COMP360 and figure out how we can optimize that patient flow. The reason I'm excited is you have a great analog in Spravato. Spravato, again, launched into these interventional psychiatry centers and they were able to adapt and we all know it's well on the path to being a $1 billion product. They've steadily grown their sites since their launch, and they’re now sitting at well over 4,000 sites. There is a natural overlap with prescribers, obviously. It is the only marketed TRD product out there and our prescribers will be natural overlaps.

Morgan, Analyst

This is Morgan on for Vikram. So we have 2 on the 005 program. First, would you expect to change the profile of patients enrolled in the trial given the delay? And second, given the delay or any of the parameters of data that you'll report for this release is different from prior expectations?

Kabir Nath, CEO

Thanks, Morgan. And I'll answer both, no in both cases. So the focus is on recruiting exactly the same patients consistent throughout the trial. And in terms of guidance about what we released today was clarifying what we had always expected to say. So no changes on either of those.

Morgan, Analyst

Okay. And if I may squeeze one more question in there. How is your focus on non-TRD indications, including PTSD impacted by these timeline delays? I know you mentioned deprioritization of preclinical efforts but what does it look like for some of the clinical indications?

Kabir Nath, CEO

So as you know, we have clearly said PTSD is an area of significant interest, a very high unmet need. We have very compelling, albeit small data set from Phase II. What we've also said is while we have planned for moving that ahead, that is not in our current runway so that situation has not changed. We have plans in hand, but we're not in a position to execute on them at this time.

Elemer Piros, Analyst

What I'd like to ask is about the eligibility for retreatment. Is there any difference between the time period between week 6 and 26 and between 26 weeks and 52 weeks? And maybe a part B to this question is, how do we define relapse? And if someone went back on to an antidepressant, do you want them to wean them off before retreatment with COMP360?

Guy Goodwin, Chief Medical Officer

Elemer, the second question is quite simply that if people have gone back on to antidepressants, then they can stay on them, particularly this would be in Part C, where this will commonly occur we think, and we'll obviously offer quite important useful information about the feasibility of administering the drug as a co-administration. The criteria for retreatment are simply a threshold on the MADRS and they're not different between the 2 phases, B and C. So either patients who have not recovered or patients who have recovered and then relapsed have to meet the same criteria essentially.

Gavin Clark-Gartner, Analyst

This is Yesha on for Gavin. For us, you noted for 005 that you won't be providing a detailed safety table but you'll be providing comments on potential suicidal ideation imbalances. We were just wondering what rate do you and/or the DSMB consider an imbalance, essentially? Just how is that defined? And what will the update kind of look like?

Kabir Nath, CEO

So I'll start. I mean the DSMB is independent. So it's up to the DSMB to tell us what they consider an imbalance. But I don't know, Mike, if you'd like to add anything to that at all?

Michael Gold, Chief R&D Officer

I cannot provide specific quantitative criteria as it relies on the degree of imbalance and the nature and severity of the cases. This is an area where we have an independent DSMB that has a lot of flexibility. Therefore, I cannot give a specific number; it truly depends on their clinical interpretation of the cases they encounter.

Patrick Trucchio, Analyst

I have a few questions. The first is, is the expectation that you will continue to need data from both COMP005 and 006 to submit the NDA for COMP360 and TRD? And secondly, can you tell us if the expectation is that there will be an advisory committee to assess the potential of COMP360 and TRD? And then can you talk more about how the data that's generated from these trials, the 005 and 006 trials, with these updated timelines discussed earlier should put you in a better position to address potential questions during a potential advisory committee?

Kabir Nath, CEO

Thanks very much, Patrick. So I'll answer very quickly. Yes and yes to questions 1 and 2, we continue to guide that we will need data from both. We absolutely expect an AdCom based on the fact this is a Schedule 1 product and the precedent is always there will be. And for the third part, I'll pass to Mike.

Michael Gold, Chief R&D Officer

Remind me the third part again.

Kabir Nath, CEO

Which is do these changes help us, we believe, put us in a stronger position to address issues that might come up at an AdCom.

Michael Gold, Chief R&D Officer

Well, I mean, I think to the extent that we preserve the integrity of the 006 study and reduce any bias in terms of unblinding, yes, it helps us because clearly, the agency while aware of it just wants sponsors to do whatever they can to minimize the functional unblinding. I was just going to add to Kabir's comment, we're going to be probably first-in-class. And generally speaking, for first-in-class, the agency generally calls for AdComs even in areas of mundane as antibiotics, so.

Patrick Trucchio, Analyst

Right. That's helpful. And then just can you frame for us more broadly as we think about compounds that have been approved recently, trials that are underway, what would be considered a positive outcome in terms of improvement on the MADRS scale in a Phase III TRD trial both in terms of reduction from baseline and active treatment relative to placebo? And then separately, I'm wondering as we are going to see the top line data from the COMP005 trial, how do you envision that data will read through to the 006 trial just given the differences in the way these studies have been designed?

Michael Gold, Chief R&D Officer

Processing your question about effect size, I would say that regarding the impact, we are limiting the amount of data released from the 005 trial because we will be sharing data while the 006 trial is still ongoing, with some patients in Part A and some in Part B. We want to be cautious about how much we disclose. Currently, there are no sites conducting both studies simultaneously, meaning the sites are nonoverlapping and located in different regions, including outside of the U.S. We are taking every measure to reduce any potential influence from the 005 trial on the 006 trial outcomes. Of course, we remain hopeful.

Operator, Operator

Ladies and gentlemen, this is the operator. I apologize but there will be a slight delay in today's conference. Please hold and the call will resume momentarily, thank you for your patience.

Lori Englebert, Chief Commercial Officer

It went back on, just went back on.

Michael Gold, Chief R&D Officer

Okay, all right. So let me just finish the last part. So what are the other ways...

Operator, Operator

You may resume the conference.

Michael Gold, Chief R&D Officer

Okay. Once again, we apologize for the platform issues; we are unsure of the cause but will work through them. Let me finish the last part of this and as promised, I will hand it back to the next speaker. For us, success means detecting a clinically relevant difference in TRD that may show somewhat lower effects compared to NTD due to the challenges of the population. I will hold off on providing an exact number regarding what those effects look like in points on the MADRS. We have adequate power for clinically relevant differences in our studies.

Tom Shrader, Analyst

I'll be quick given the situation. Given the comments about complexity and all that, are your dropout rates tracking as expected? And you haven't said you're adding patients. Are you?

Kabir Nath, CEO

Mike?

Michael Gold, Chief R&D Officer

Yes, so the attrition rate is actually running a little bit below our plan. So subjects are staying in the study. So we are not experiencing a higher-than-planned attrition. We are not changing the sample size. We are not doing any adjustments to the sample size in the study. We are emphasizing and for I hope reasons that are very clear how to accelerate recruitment to complete the studies as quickly as possible and how to enhance retention so that we minimize our missing data problem. But for the moment, attrition is well within planning parameters.

Sumant Kulkarni, Analyst

I have 2 for 005. Roughly, what percentage of the trial participants do you expect would have completed the 26 weeks at the time you announced the 6-week data? And what prompted the decision to announce top-line at 6 weeks for 005 versus waiting for the full 26 weeks which might give us more insight into durability of treatment as well? And I have a follow-up after that.

Kabir Nath, CEO

Yes. So Sumant, I can't give you an answer to the first part but just to be clear on the second, we have always guided for releasing 6-week data of 005. I think as you’re very well aware, the designs are very different in 006, that is a design that the agency themselves recognize is the best possible to preserve blinding and that’s why our focus on preserving blinding in 006. So our decision on 005 has never changed from what we guided in the past.

Sumant Kulkarni, Analyst

Got it. And then a commercial question for Lori. Do you think the current Phase III program gives you enough commercial firepower to address what pretreatment schedule might be needed in the real world as that has potential implications for pricing?

Lori Englebert, Chief Commercial Officer

Yes, I'm sorry. Could you repeat the question?

Kabir Nath, CEO

Does it give us enough data for the dosing schedule and therefore, to address pricing in the Phase III program?

Lori Englebert, Chief Commercial Officer

We believe it does. And we think that it will be a very important piece of information and relevant to payers to see what that looks like.

Operator, Operator

Seeing as we do not have any more questions at this time, I will now turn the call back over to the management for closing remarks.

Kabir Nath, CEO

Thanks, Louella. And first of all, again, our apologies for the quality of this call, we will clearly be taking action around that in advance of our next call. So I'm sorry about the interruptions and thanks for your patience. We at COMPASS are completely focused on the execution of our pivotal trials, while as we've said, continuing to maintain the highest quality with an urgency and a commitment to bring COMP360 to patients in need. Our confidence in COMP360 remains steadfast, and we are excited by what's ahead. Thank you again for joining the call today and we look forward to further conversations with all of you. Thank you.

Operator, Operator

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.