PresentationJudah FrommerEquity Analyst All right. Good morning, everyone. Welcome to the session of the Morgan Stanley Global Healthcare Conference. I'm Judah Frommer, one of the SMID biotech analysts here. I'm just going to start off with a quick disclosure statement for important disclosures. Please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that out of the w ...

Company Overview - COMPASS Pathways is a leading company in the field of psychedelics, which has transitioned from a fringe area to a mainstream focus [1] - The management team includes Kabir Nath (CEO), Guy Goodwin (CMO), and Steve Levine (CPO), indicating a strong leadership presence in the industry [1] Industry Perspective - The psychedelics industry requires a new approach to communication and understanding, reflecting its growing acceptance and potential [1] - There is a discussion on the terminology used in the industry, questioning whether to continue using the term "psychedelic" or to adopt alternative language [1]

Summary of COMPASS Pathways (CMPS) FY Conference Call - August 12, 2025 Company Overview - **Company**: COMPASS Pathways - **Focus**: Mental health treatments, specifically in the psychedelic space - **Product**: COMM 360, aimed at treating treatment-resistant depression (TRD) Key Points and Arguments 1. **Regulatory Landscape**: - Political and regulatory support for psychedelic treatments is seen as neutral to positive, with endorsements from various government leaders acknowledging the unmet needs in mental health care [7][10] - The FDA's psychiatry division remains engaged and responsive, having granted breakthrough therapy designation to COMPASS [9][30] 2. **Clinical Trials**: - A large Phase 2b study for TRD involved 233 patients across 22 sites in 10 countries, achieving statistically significant results [11] - The Phase 3 trial (COM005) demonstrated a significant separation of the 25 mg dose from placebo at week six after a single administration, which is a notable advantage over existing treatments like esketamine (SPRAVATO) [16][17] 3. **Market Positioning**: - COMPASS believes it is well-positioned to commercialize COMM 360 in the U.S., differing from traditional big pharma approaches [14] - There is interest from major pharmaceutical companies in the psychedelic space, which validates the science behind these treatments [13][15] 4. **Safety and Efficacy**: - The Data Safety Monitoring Board (DSMB) issued a clean safety statement for the Phase 3 trials, indicating no new safety signals [18][22] - Comparability of COMPASS's data with SPRAVATO has been emphasized, with a focus on achieving clinically meaningful reductions in depression scales [23] 5. **Investor Perception**: - Initial misunderstandings regarding the Phase 3 data have been addressed, clarifying the trial designs and the implications for future studies [19][20] - The reception from the neuropsychiatric community has been enthusiastic, with many psychiatrists viewing COMM 360 as approvable [24] 6. **Future Developments**: - A meeting with the FDA is scheduled to discuss the data and potential for accelerated filing based on the evidence gathered [25][26] - Plans for a PTSD trial are in development, with a focus on addressing the significant unmet need in this area [48][49] 7. **Commercial Considerations**: - Pricing strategies will depend on the full profile of COMM 360, with expectations of less frequent administration compared to SPRAVATO [39] - Payer policies are anticipated to align closely with those for SPRAVATO, focusing on patients who meet the definition of treatment-resistant depression [40] 8. **Market Size and Demand**: - Approximately 3 million U.S. adults are living with TRD, with only a small fraction currently receiving effective treatment [43] - The company aims to address the high unmet need in mental health, particularly for patients who have not responded to existing therapies [48] Additional Important Content - The company does not view other psychedelic treatments as direct competitors due to the vast unmet need in the market [52] - The potential for positive data from other psychedelic programs is seen as beneficial for the overall field and patient outcomes [53]

Compass Pathways Plc (CMPS 10.41%), a clinical-stage mental health company developing psilocybin-based therapies, released its second quarter 2025 results on July 31, 2025. The main headline was a strong clinical update: its lead drug candidate, COMP360 psilocybin, hit its primary goal in a Phase 3 trial for treatment- resistant depression (TRD) with clear statistical and clinical impact. Earnings also slightly exceeded analyst expectations, with a GAAP net loss of $0.41 per share for Q2 2025, better than t ...

Financial Data and Key Metrics Changes - As of June, the company had cash and cash equivalents of $222 million, down from $260 million at the end of the first quarter, which is expected to fund operations into 2027 [15] - Cash used in operations for the second quarter was $38.7 million, with an expected net cash usage for the full year 2025 in the range of $120 million to $145 million [15] Business Line Data and Key Metrics Changes - The company announced the successful achievement of the primary endpoint of the COMT360-5 trial, showing a statistically significant reduction in depression symptoms [7] - The second pivotal Phase III trial, COMP006, continues to recruit well, with data expected in the second half of next year [9] Market Data and Key Metrics Changes - The company is exploring the potential for COMT360 in PTSD, with a late-stage clinical program design in the final steps [12] - A small Phase II study in anorexia showed encouraging signals in reducing eating disorder and depressive symptoms, although the statistical power was limited due to low participant numbers [13] Company Strategy and Development Direction - The company is focused on executing its pivotal program while exploring opportunities to expedite the delivery of COMT360 to patients with treatment-resistant depression and PTSD [16] - The addition of Justin Gover to the board is expected to leverage his expertise in gaining FDA approval for COMT360 [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the positive results from the trials, which they believe de-risk the company from a regulatory and commercial perspective [15] - The company is encouraged by the engagement with the FDA and the potential for accelerated pathways for filing [22][29] Other Important Information - The company has submitted an application for the commissioner's national priority review voucher, which promises an accelerated timeline for review [29] - The safety profile of COMT360 in the anorexia study was aligned with the high-risk patient population, with no unexpected safety signals reported [13][61] Q&A Session Summary Question: Can you expand upon the engagement with the FDA since the data? - Management confirmed they will meet with the FDA this quarter and are exploring accelerated pathways for filing [22][24] Question: What feedback have you received about readiness for COMT360 delivery? - The company is confident that the existing network of centers is ready to deliver COMT360 if approved, as they align with the infrastructure currently delivering SPRAVATO [38] Question: Have you seen a pickup in enrollment following the five data? - The company reported that the reception from investigators has been very positive, reinforcing their belief in the potential of the ongoing trial [42] Question: Are you pursuing the commissioner's national priority voucher? - Yes, the company has submitted an application and believes it meets the eligibility criteria [46][48] Question: What is the earliest that you could file a new drug application for COM360? - Management stated it is premature to speculate on the timeline until they meet with the FDA [65]

Second Quarter 2025 Business Highlights The company announced positive Phase 3 results for COMP360 in TRD and is advancing its PTSD clinical program [COMP360 Psilocybin Treatment in TRD (Treatment Resistant Depression)](index=1&type=section&id=COMP360%20psilocybin%20treatment%20in%20TRD%20%28Treatment%20Resistant%20Depression%29) The company announced positive primary endpoint results from its first Phase 3 trial (COMP005) for COMP360 in treatment-resistant depression, demonstrating a statistically significant and clinically meaningful reduction in symptoms at 6 weeks with no unexpected safety findings. The second Phase 3 trial (COMP006) is enrolling well, with 26-week data anticipated in the second half of 2026, and the company is exploring pathways for an accelerated regulatory filing - Achieved a **positive primary endpoint** in the first COMP360 Phase 3 trial (COMP005), showing a **highly statistically significant and clinically meaningful reduction** in depression symptoms at **6 weeks** after a single administration[3](index=3&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) - The second pivotal Phase 3 trial (COMP006) is continuing to enroll, with **26-week data** expected in the **second half of 2026**[5](index=5&type=chunk)[6](index=6&type=chunk) - A Data Safety Monitoring Board (DSMB) review found **no unexpected safety findings** and **no clinically meaningful imbalance in suicidal ideation** in either Phase 3 study[6](index=6&type=chunk) - The company is exploring options for a **potential accelerated filing** of COMP360 for TRD based on the positive Phase 3 data[5](index=5&type=chunk) [COMP360 Psilocybin Treatment in PTSD (Post Traumatic Stress Disorder)](index=2&type=section&id=COMP360%20psilocybin%20treatment%20in%20PTSD%20%28Post%20Traumatic%20Stress%20Disorder%29) Following a positive Phase 2 open-label study announced in May 2024, which showed COMP360 was well-tolerated and demonstrated rapid, durable symptom improvement, the company is now finalizing the design for a late-stage clinical trial for PTSD - The company is **finalizing the design for a late-stage clinical trial** for COMP360 in PTSD[7](index=7&type=chunk) - The trial design is informed by a Phase 2 study where a single administration of COMP360 was **well-tolerated and showed rapid and durable symptom improvement** from baseline[7](index=7&type=chunk) Corporate and Financial Highlights Key corporate developments include board changes, a review of financial performance, and updated financial guidance [Board of Directors Update](index=2&type=section&id=Board%20of%20Directors%20update) Justin Gover, the former CEO of GW Pharmaceuticals, has been appointed to the Compass Pathways Board of Directors. Concurrently, Dr. Linda McGoldrick will retire from her board position at the end of October after more than five years of service - **Justin Gover**, former CEO of GW Pharmaceuticals, was **appointed to the Board of Directors**[9](index=9&type=chunk) - **Dr. Linda McGoldrick** is set to **retire from the Board** at the end of October after over 5 years of service[9](index=9&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) For Q2 2025, Compass reported a net loss of $38.4 million, slightly up from $38.1 million in Q2 2024, influenced by a non-cash loss on warrant liabilities. For the first six months of 2025, the net loss decreased to $56.3 million from $73.3 million year-over-year, primarily due to a significant non-cash gain on warrant liabilities. R&D expenses rose due to advancing Phase 3 trials, while G&A expenses declined. The company ended the quarter with a strong cash position of $221.9 million | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Loss** | $38.4M | $38.1M | $56.3M | $73.3M | | **Net Loss Per Share** | $0.41 | $0.56 | $0.62 | $1.11 | | **R&D Expenses** | $30.3M | $29.1M | $61.2M | $54.0M | | **G&A Expenses** | $12.6M | $14.3M | $31.3M | $27.9M | - The **significant variability in reported net loss** was primarily driven by **non-cash fair value adjustments related to warrant liabilities**, which resulted in a **$2.5 million loss** in **Q2 2025** and a **$16.9 million gain** in **H1 2025**[9](index=9&type=chunk)[14](index=14&type=chunk) - **Cash and cash equivalents** were **$221.9 million** as of **June 30, 2025**, compared to **$165.1 million** as of **December 31, 2024**[14](index=14&type=chunk) [Financial Guidance](index=3&type=section&id=Financial%20Guidance) The company projects its full-year 2025 net cash used in operating activities to be in the range of $120 million to $145 million. Its cash position of $221.9 million as of June 30, 2025, is expected to be sufficient to fund operations and capital expenditures into 2027 - **Full year 2025 net cash used in operating activities** is expected to be between **$120 million and $145 million**[11](index=11&type=chunk) - The cash position as of **June 30, 2025**, is expected to provide a **cash runway into 2027**[5](index=5&type=chunk)[11](index=11&type=chunk) Financial Statements Detailed financial statements provide an overview of the company's balance sheet and operational performance [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets grew to $293.5 million from $213.7 million at year-end 2024, driven by an increase in cash to $221.9 million. Total liabilities rose substantially to $131.0 million from $59.0 million, primarily due to the recognition of $74.4 million in warrant liabilities. Consequently, total shareholders' equity increased modestly to $162.6 million | Balance Sheet Item (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $221,881 | $165,081 | | **Total assets** | $293,536 | $213,666 | | **Warrant liabilities** | $74,398 | $0 | | **Total liabilities** | $130,981 | $58,971 | | **Total shareholders' equity** | $162,555 | $154,695 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the second quarter of 2025, the company reported a net loss of $38.4 million, nearly flat compared to a $38.1 million loss in Q2 2024. For the six months ended June 30, 2025, the net loss improved to $56.3 million from $73.3 million in the prior-year period. This improvement was largely due to a $16.9 million non-cash gain from the change in fair value of warrant liabilities. Operating expenses for the six-month period increased to $92.5 million from $81.9 million, driven by higher research and development costs | Statement of Operations (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $30,325 | $29,069 | | General and administrative | $12,608 | $14,253 | | Loss from operations | $(42,933) | $(43,322) | | Fair value change of warrant liabilities | $(2,540) | $0 | | **Net loss** | **$(38,403)** | **$(38,101)** | | Statement of Operations (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $61,205 | $53,970 | | General and administrative | $31,344 | $27,925 | | Loss from operations | $(92,549) | $(81,895) | | Fair value change of warrant liabilities | $16,920 | $0 | | **Net loss** | **$(56,267)** | **$(73,288)** | Company Information and Disclosures This section provides an overview of Compass Pathways and standard forward-looking statement disclosures [About Compass Pathways](index=3&type=section&id=About%20Compass%20Pathways) Compass Pathways is a biotechnology company dedicated to advancing mental health treatments. Its primary focus is the development of COMP360, an investigational synthetic psilocybin therapy. This therapy has received Breakthrough Therapy designation from the U.S. FDA and an Innovative Licensing and Access Pathway (ILAP) designation in the UK for treatment-resistant depression (TRD) - The company is a **biotechnology firm** focused on accelerating patient access to evidence-based innovation in mental health[12](index=12&type=chunk) - Its lead program is the development of investigational COMP360 synthetic psilocybin treatment, which has received **FDA Breakthrough Therapy** and **UK ILAP designations** for **treatment-resistant depression (TRD)**[12](index=12&type=chunk) [Forward-looking Statements](index=3&type=section&id=Forward-looking%20statements) This section provides a standard safe harbor statement, cautioning that the press release includes forward-looking statements concerning financial guidance, clinical trial timelines, regulatory approval prospects, and commercialization plans. These statements are subject to significant risks and uncertainties, such as clinical development outcomes, funding availability, and regulatory challenges, which could cause actual results to differ materially from expectations - The press release contains **forward-looking statements** regarding financial guidance, clinical trial timelines (including Phase 3 TRD data), potential for regulatory filings, and commercialization plans[15](index=15&type=chunk) - These statements are **not guarantees and involve known and unknown risks**, including **uncertainties in clinical development**, the **need for additional funding**, and potential for **unsuccessful marketing approval efforts**[16](index=16&type=chunk)

[PART I - FINANCIAL INFORMATION](index=9&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=9&type=section&id=Item%201.%20Financial%20Statements) Unaudited H1 2025 financial statements reflect increased assets and liabilities, a reduced net loss, and substantial financing inflows [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows total assets at **$293.5 million** and total liabilities at **$131.0 million**, driven by cash and warrant liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $221,881 | $165,081 | | Total current assets | $276,403 | $201,291 | | **Total assets** | **$293,536** | **$213,666** | | **Liabilities & Equity** | | | | Total current liabilities | $31,328 | $34,016 | | Warrant liabilities | $74,398 | $— | | **Total liabilities** | **$130,981** | **$58,971** | | **Total shareholders' equity** | **$162,555** | **$154,695** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For H1 2025, the company reported a **net loss of $56.3 million**, an improvement from 2024, primarily due to warrant fair value changes and R&D tax credits Statement of Operations Highlights (in thousands, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $61,205 | $53,970 | | General and administrative | $31,344 | $27,925 | | Total operating expenses | $92,549 | $81,895 | | Loss from operations | $(92,549) | $(81,895) | | Fair value change of warrant liabilities | $16,920 | $— | | Benefit from R&D tax credit | $12,735 | $6,810 | | **Net loss** | **$(56,267)** | **$(73,288)** | | **Net loss per share** | **$(0.62)** | **$(1.11)** | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw **$84.3 million** net cash used in operations, offset by **$140.5 million** from financing, resulting in a **$56.8 million** net cash increase Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(84,346) | $(55,244) | | Net cash provided by financing activities | $140,525 | $63,722 | | Effect of exchange rate changes | $611 | $(99) | | **Net increase in cash** | **$56,790** | **$8,379** | | **Cash, cash equivalents and restricted cash, end of period** | **$222,260** | **$229,017** | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's COMP360 development, a **$149.8 million** January 2025 financing, and sufficient cash to fund operations for at least twelve months - The company is a clinical-stage biotechnology company developing its investigational COMP360 psilocybin treatment for treatment-resistant depression[32](index=32&type=chunk) - In January 2025, the company completed a financing that raised aggregate proceeds of **$149.8 million** through the issuance of ADSs, Pre-funded Warrants, and 2025 ADS Warrants[36](index=36&type=chunk)[63](index=63&type=chunk) - Management believes the cash and cash equivalents of **$221.9 million** as of June 30, 2025, will be sufficient to fund operations and capital expenditures for at least the next twelve months[38](index=38&type=chunk) - Warrants issued in the January 2025 financing are classified as liabilities and measured at fair value, with changes recognized in the statement of operations. As of June 30, 2025, the total fair value of these warrant liabilities was **$74.4 million**[56](index=56&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses COMP360's clinical progress, including positive Phase 3 TRD data, and the financial impact of increased R&D and G&A expenses [Overview and Clinical Development](index=23&type=section&id=Overview%20and%20Clinical%20Development) The company's COMP360 treatment for TRD achieved its primary endpoint in Phase 3 trial 1, with **$221.9 million** cash expected to fund operations into 2027 - The pivotal Phase 3 trial 1 (COMP005) for TRD achieved its primary endpoint, with a single 25 mg dose of COMP360 demonstrating a highly statistically significant reduction in symptom severity versus placebo at six weeks (p<0.001)[80](index=80&type=chunk) - The second pivotal Phase 3 trial (COMP006) is ongoing, and 26-week data is expected to be reported in the second half of 2026[82](index=82&type=chunk) - Following positive Phase 2 results in PTSD, the company is designing a late-stage program for this indication[83](index=83&type=chunk) - As of June 30, 2025, the company had **$221.9 million** in cash and cash equivalents, which is expected to fund operations into 2027[89](index=89&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) H1 2025 operating expenses increased to **$92.5 million** due to clinical trials and financing-related fees, partially offset by significant other income Operating Expenses Comparison (in thousands) | Expense Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $61,205 | $53,970 | $7,235 | | General and administrative | $31,344 | $27,925 | $3,419 | | **Total operating expenses** | **$92,549** | **$81,895** | **$10,654** | - The increase in R&D expenses was primarily due to advancing late-stage COMP360 clinical trials, partially offset by decreased personnel costs from a Q4 2024 reorganization[111](index=111&type=chunk)[112](index=112&type=chunk) - The increase in G&A expenses for the six-month period was driven by higher legal and professional fees related to the 2025 Financing[114](index=114&type=chunk) - Total other income, net, increased by **$27.8 million** for the six-month period, driven by a **$16.9 million** gain on fair value of warrant liabilities, a **$5.9 million** increase in R&D tax credit benefits, and a **$5.0 million** increase in foreign exchange gains[115](index=115&type=chunk)[119](index=119&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Operations are funded by equity and debt, with **$221.9 million** cash expected to last into 2027, but future funding depends on clinical trial progress - The company has primarily funded operations through equity offerings (including an ATM program), a loan agreement with Hercules, and a private placement (PIPE)[117](index=117&type=chunk) - Net cash used in operating activities increased to **$84.3 million** for the six months ended June 30, 2025, from **$55.2 million** in the prior year period, mainly due to unfavorable working capital changes[120](index=120&type=chunk)[121](index=121&type=chunk) - Net cash provided by financing activities increased to **$140.5 million** for the six months ended June 30, 2025, primarily from the 2025 Financing[120](index=120&type=chunk)[122](index=122&type=chunk) - Future expenses are expected to increase with the advancement of the Phase 3 program in TRD, initiation of a late-stage program in PTSD, and commercial preparedness activities[123](index=123&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures have occurred since the December 31, 2024, Annual Report on Form 10-K - There have been no material changes in market risk exposures since the last Annual Report on Form 10-K for the year ended December 31, 2024[133](index=133&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[134](index=134&type=chunk) - No changes in internal control over financial reporting occurred during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[135](index=135&type=chunk) [PART II - OTHER INFORMATION](index=37&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material litigation or legal proceedings expected to adversely affect its business or financial condition - The company is not currently a party to any material litigation or legal proceedings[137](index=137&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) Numerous risks include a history of losses, need for additional funding, dependence on COMP360, complex regulatory processes, and controlled substance challenges - The company is a clinical-stage entity with a history of significant losses (**$591.0 million** accumulated deficit as of June 30, 2025) and expects to incur losses for the foreseeable future[139](index=139&type=chunk) - Substantial additional funding is required to complete development and commercialization of COMP360, and failure to obtain it could force delays or termination of programs[144](index=144&type=chunk) - The company's business is highly dependent on the successful development, regulatory approval, and commercialization of its only clinical-stage candidate, COMP360 psilocybin treatment[172](index=172&type=chunk)[173](index=173&type=chunk) - COMP360 is subject to strict controlled substance laws (Schedule I in the U.S.), which creates significant regulatory hurdles for clinical development and potential commercialization, including the need for DEA rescheduling[179](index=179&type=chunk)[181](index=181&type=chunk) [Item 5. Other Information](index=142&type=section&id=Item%205.%20Other%20Information) The company amended its Hercules loan agreement, completed a Phase 2 anorexia nervosa trial with encouraging signals, and reported no 10b5-1 plan changes - On July 30, 2025, the company amended its Loan and Security Agreement with Hercules, removing a **$10.0 million** tranche and increasing a separate, discretionary tranche by **$10.0 million** to an aggregate of **$20.0 million**[560](index=560&type=chunk) - The Phase 2 trial of COMP360 in anorexia nervosa (COMP401) was completed. While there was a positive signal in the 25mg arm, high dropout rates in the control arm limited the study's statistical power. The safety profile was consistent with the patient population[561](index=561&type=chunk) [Item 6. Exhibits](index=143&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and the amended loan agreement with Hercules Capital

Core Viewpoint - The biotechnology industry presents significant investment opportunities, particularly in pre-revenue companies with high price targets set by analysts, indicating potential for dramatic gains in a short time [1][4]. Group 1: Compass Pathways - Compass Pathways is developing a treatment for depression using synthetic psilocybin, with a current market cap of approximately $363 million, down from a peak of over $2 billion during the COVID-19 pandemic [5][10]. - Analysts have set a consensus price target of $15.78 for Compass Pathways, suggesting a potential gain of over 300% from current prices [5]. - The company reported positive results from the COMP005 trial for treatment-resistant depression (TRD), showing a 3.6-point improvement on the Montgomery-Asberg Depression Rating Scale (MADRS) compared to the placebo group [8][9]. - The upcoming COMP006 study will further evaluate the efficacy of COMP360, with expectations that stronger results could significantly increase the stock's value [10]. Group 2: Viking Therapeutics - Viking Therapeutics, another clinical-stage drugmaker, has seen its market cap drop to approximately $3.6 billion from a peak of over $9 billion, with analysts projecting a price target of $90.26, indicating a potential increase of 181% [12]. - The company's lead candidate, VK2735, has shown promising results in weight loss, achieving a placebo-adjusted weight loss of 13% after 13 weeks of treatment [13]. - Viking Therapeutics is positioned to compete with established products like Zepbound, which generated $9.3 billion in annualized sales in the first quarter of this year [14]. - The company is currently conducting a phase 3 study to support a new drug application, which carries risks if tolerability issues arise [15].

Core Viewpoint - COMPASS Pathways PLC has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4]. Recent Performance of COMPASS Pathways - Over the past three months, the Zacks Consensus Estimate for COMPASS Pathways has increased by 22.6%, reflecting a positive trend in earnings estimates [8]. - The company is expected to earn -$1.48 per share for the fiscal year ending December 2025, with no year-over-year change anticipated [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - COMPASS Pathways' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10].

Core Viewpoint - Compass Pathways' disappointing Phase III trial results for psilocybin treatment of treatment-resistant depression (TRD) led to a significant decline in stock prices across the psychedelic drug sector, with Compass's stock dropping by 49% [1][2]. Group 1: Trial Results and Market Reaction - The Phase III trial (COMP005) for COMP360 showed a MADRS score improvement of only 3.6 points compared to placebo, which, while statistically significant, fell short of analysts' expectations of at least 5 points and was lower than the company's previous Phase II data of 6.6 points [2][3]. - The underwhelming results raised concerns about the efficacy, sustainability, and commercial potential of psilocybin, leading to a broader sell-off in the psychedelic drug sector [2][3]. - Other companies in the psychedelic space, such as atai Life Sciences, MindMed, Cybin, and GH Research, experienced stock declines ranging from 5% to over 15% following the news [2][3]. Group 2: Impact on Other Companies - atai Life Sciences, with its DMT oral film in Phase II trials for TRD, saw its stock drop by over 15% [3]. - MindMed, which is in Phase III trials for an LSD derivative targeting major depressive disorder, experienced a stock decline of approximately 6% [3]. - Cybin's stock, which is developing an oral psilocin treatment for depression in Phase II trials, fell by about 5% [3]. - GH Research, with its inhaled mebufotenin candidate in Phase II for TRD, also saw a stock decrease of around 5% [3]. - Other psychedelic stocks, including Clearmind Medicine, Enveric Biosciences, and Bright Minds Biosciences, faced significant declines on the same day [4].