COMPASS Pathways plc (NASDAQ:CMPS) Q4 2022 Earnings Conference Call February 28, 2023 8:00 AM ET Company Participants Steven Schultz - Senior Vice President-Investor Relations Kabir Nath - Chief Executive Officer Mike Falvey - Chief Financial Officer Conference Call Participants Charles Duncan - Cantor Fitzgerald Ritu Baral - Cowen François Brisebois - Oppenheimer Patrick Trucchio - H.C. Wainwright Elemer Piros - EF Hutton Group Neena Bitritto-Garg - Citi Bert Hazlett - BTIG Kyle Qian - CGS Operator Good da ...

Part I [Item 1. Business](index=8&type=section&id=Item%201.%20Business) COMPASS Pathways is a clinical-stage mental health company developing COMP360 psilocybin therapy for treatment-resistant depression, advancing to Phase 3 [Overview and Strategy](index=8&type=section&id=Overview%20and%20Strategy) Developing COMP360 psilocybin therapy for TRD, the company is in Phase 3, expanding indications, and integrating digital solutions - The company is pioneering a new model of psilocybin therapy, combining its proprietary COMP360 psilocybin formulation with psychological support[26](index=26&type=chunk) - The primary focus is on treatment-resistant depression (TRD), with ongoing Phase 2 trials for anorexia nervosa and post-traumatic stress disorder (PTSD)[27](index=27&type=chunk)[29](index=29&type=chunk) - A pivotal Phase 3 program for TRD has commenced, with topline data from the first trial (COMP005) expected in summer 2024 and the second (COMP006) in mid-2025[31](index=31&type=chunk)[35](index=35&type=chunk) - Key strategic elements include expanding indications, discovering new compounds via its Discovery Center, establishing Centers of Excellence for care model optimization, and using digital technology to improve scalability and patient outcomes[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [Market Opportunity and Existing Therapies](index=10&type=section&id=Market%20Opportunity%20and%20Existing%20Therapies) The large market for MDD and TRD, with 100 million TRD patients globally, faces significant unmet needs due to limitations of existing therapies Global Patient Population for Depression | Condition | Patient Population (Worldwide) | | :--- | :--- | | Major Depressive Disorder (MDD) | 320 million | | Persistent Depression (2nd Line) | 200 million | | Treatment-Resistant Depression (TRD) | 100 million (~33% of total) | - The economic burden of MDD in the U.S. was estimated at over **$200 billion** per year as of 2010, with direct medical costs for TRD patients being two to three times higher than for non-TRD MDD patients[56](index=56&type=chunk)[66](index=66&type=chunk) - Existing pharmacotherapies for depression often have limited efficacy, high relapse rates (up to **90%** for third-line+ treatments), and significant side effects[54](index=54&type=chunk)[56](index=56&type=chunk) - Somatic therapies like ECT and VNS are invasive, associated with significant adverse reactions, and are typically reserved for patients who have not responded to other treatments[72](index=72&type=chunk) [Our Investigational Psilocybin Therapy - COMP360](index=15&type=section&id=Our%20Investigational%20Psilocybin%20Therapy%20-%20COMP360) COMP360 is a proprietary psilocybin formulation acting on 5-HT2A receptors, showing potential for rapid symptom reduction through a three-phase therapy protocol - COMP360 is a proprietary, pharmaceutical-grade polymorphic crystalline psilocybin formulation optimized for stability and purity[380](index=380&type=chunk) - The mechanism of action is primarily through the active metabolite psilocin, which stimulates 5-HT2A serotonin receptors, leading to downstream effects on neuroplasticity and brain network connectivity[318](index=318&type=chunk)[323](index=323&type=chunk)[327](index=327&type=chunk) - Multiple academic studies (though not using COMP360) have shown that psilocybin therapy can provide rapid and lasting reductions in depression and anxiety symptoms, with a low toxicity profile and no serious adverse events reported[333](index=333&type=chunk)[334](index=334&type=chunk)[341](index=341&type=chunk) - The COMP360 therapy protocol involves three distinct phases: preparation with a therapist, a 6-8 hour psilocybin administration session, and post-administration integration sessions to process insights[367](index=367&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk) [Clinical Development Program](index=24&type=section&id=Clinical%20Development%20Program) COMP360's clinical program includes a successful Phase 2b TRD trial, advancing to pivotal Phase 3, and expanding into anorexia nervosa and PTSD studies - A Phase 1 trial with **89 healthy volunteers** showed COMP360 was generally well-tolerated with no serious adverse events and no negative long-term effects on cognition or emotional processing[384](index=384&type=chunk)[105](index=105&type=chunk) - The Phase 2b trial in **233 TRD patients** was the largest of its kind and achieved its primary endpoint. The **25mg dose group** showed a statistically significant and clinically relevant reduction in depression symptoms (MADRS scale) compared to the 1mg group at week 3 (**p<0.001**)[192](index=192&type=chunk)[167](index=167&type=chunk) Phase 2b Trial Key Efficacy Results (25mg vs 1mg at Week 3) | Metric | 25mg Group | 1mg Group | | :--- | :--- | :--- | | **Responders** (≥50% MADRS decrease) | 36.7% | 17.7% | | **Remission** (MADRS score ≤10) | 29.1% | 7.6% | - The Phase 3 program consists of two pivotal trials: COMP005 (**n=255**, single **25mg dose** vs placebo, data summer 2024) and COMP006 (**n=568**, repeat dose study, data mid-2025)[114](index=114&type=chunk)[132](index=132&type=chunk)[422](index=422&type=chunk) - The company is expanding into other indications with Phase 2 trials in anorexia nervosa and PTSD, and supports numerous investigator-initiated studies (IISs) in conditions like bipolar II disorder and severe TRD[423](index=423&type=chunk)[444](index=444&type=chunk) [Drug Discovery, Manufacturing, and Commercialization](index=39&type=section&id=Drug%20Discovery%2C%20Manufacturing%2C%20and%20Commercialization) The company conducts drug discovery, outsources manufacturing, implements a scalable therapist training program, and plans in-house commercialization via Centers of Excellence - The company established a Drug Discovery Center to develop optimized psychedelic compounds targeting the 5-HT2A receptor and has acquired an IP portfolio covering various psychedelic substances[142](index=142&type=chunk)[125](index=125&type=chunk) - Manufacturing is outsourced to contract drug manufacturing organizations (CDMOs) to ensure cGMP-compliant production of the API and final drug product[129](index=129&type=chunk)[148](index=148&type=chunk) - A comprehensive, four-tier therapist training program has been established to ensure quality and scalability, having already trained over **200 therapists**[127](index=127&type=chunk)[446](index=446&type=chunk)[157](index=157&type=chunk)[146](index=146&type=chunk) - Commercialization plans involve building in-house sales and marketing capabilities for the U.S. and Europe, and establishing Centers of Excellence to serve as research and innovation hubs[439](index=439&type=chunk)[159](index=159&type=chunk)[463](index=463&type=chunk) [Intellectual Property](index=43&type=section&id=Intellectual%20Property) The company actively seeks and defends patent protection for COMP360, its manufacturing processes, and treatment methods, with key U.S. patents expiring around 2038 - The company's strategy focuses on obtaining and defending patents for its crystalline psilocybin, manufacturing processes, formulations, and methods of treatment[452](index=452&type=chunk) Key U.S. Patents for COMP360 | U.S. Patent No. | Subject Matter | Est. Expiration | | :--- | :--- | :--- | | 10,519,175 | Methods of treating treatment-resistant depression | ca. 2038 | | 10,947,257 | Oral dosage forms of crystalline psilocybin | ca. 2038 | | 10,954,259 | Crystalline psilocybin; Pharmaceutical formulations | ca. 2038 | - Petitions for post-grant review of U.S. Patents 10,947,257 and 10,954,259 were filed by a third party but were denied institution by the USPTO in June 2022[163](index=163&type=chunk) - The company owns trademark registrations for COMPASS, COMPASS PATHWAYS, and MYPATHFINDER in the US, EU, and UK, with applications pending for CHANTERELLE[154](index=154&type=chunk)[457](index=457&type=chunk) [Government Regulation](index=46&type=section&id=Government%20Regulation) The company operates under extensive regulation, including FDA/EMA approval processes, complex DEA rescheduling for psilocybin, and uncertainty regarding third-party payor reimbursement - The U.S. drug approval process requires extensive preclinical and clinical trials (Phase 1, 2, 3) to establish safety and efficacy before an NDA can be submitted to the FDA[156](index=156&type=chunk)[166](index=166&type=chunk)[190](index=190&type=chunk) - Psilocybin is a Schedule I controlled substance in the U.S. and a Class A/Schedule 1 drug in the UK, meaning it has no currently accepted medical use and is subject to strict controls. Post-approval, it would require rescheduling by the DEA to be marketed in the U.S.[207](index=207&type=chunk)[251](index=251&type=chunk) - In Europe, marketing authorization can be obtained through a centralized procedure via the EMA, which grants a single authorization valid throughout the EEA. The UK has a separate process post-Brexit[412](index=412&type=chunk)[224](index=224&type=chunk)[234](index=234&type=chunk) - Commercial success is highly dependent on securing coverage and adequate reimbursement from third-party payors like Medicare, Medicaid, and private insurers, which is uncertain for novel therapies[261](index=261&type=chunk) - The company is subject to numerous other laws, including the federal Anti-Kickback Statute, the Foreign Corrupt Practices Act (FCPA), and data privacy regulations like HIPAA in the U.S. and GDPR in Europe[275](index=275&type=chunk)[679](index=679&type=chunk) [Human Capital Management](index=62&type=section&id=Human%20Capital%20Management) The company significantly grew its workforce to 181 employees in 2022, emphasizing employee wellbeing, fostering a positive culture, and promoting Diversity, Equity, and Inclusion - The company grew its workforce by **59%** to **181 employees** as of December 31, 2022, with **74%** engaged in research and development activities[285](index=285&type=chunk) - A strong focus is placed on mental health and wellbeing, providing resources such as a global employee assistance program, confidential check-ins, and access to meditation apps[286](index=286&type=chunk)[287](index=287&type=chunk) - The company actively promotes a positive culture and DEI, achieving a high employee net promoter score and implementing initiatives to raise awareness and recruit diverse candidates[296](index=296&type=chunk)[302](index=302&type=chunk) - As of December 31, 2022, female representation was **33%** on the board and **64%** across the entire company[305](index=305&type=chunk) [Item 1A. Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, development, regulatory, and operational risks, including ongoing losses, reliance on COMP360, controlled substance challenges, and IP protection - **Financial Risks:** The company is a clinical-stage entity with a history of significant losses (**$91.5 million** in 2022) and expects to incur losses for the foreseeable future. It will need substantial additional funding to complete development and commercialization, and failure to obtain it could force delays or termination of programs[314](index=314&type=chunk)[315](index=315&type=chunk)[473](index=473&type=chunk) - **Development & Commercialization Risks:** The business is highly dependent on the success of a single therapeutic candidate, COMP360. Clinical development is lengthy, expensive, and uncertain, with a high risk of failure in late-stage trials. Potential adverse side effects could delay or prevent approval[487](index=487&type=chunk)[501](index=501&type=chunk)[513](index=513&type=chunk) - **Regulatory & Legal Risks:** COMP360 contains psilocybin, a Schedule I controlled substance in the U.S. and UK. This requires a complex, uncertain, and potentially lengthy rescheduling process post-approval for commercialization. The company is also subject to extensive healthcare fraud and abuse laws[809](index=809&type=chunk)[810](index=810&type=chunk)[649](index=649&type=chunk) - **Dependence on Third Parties:** The company relies on third-party CMOs for manufacturing and CROs for clinical trials. Any failure by these partners to perform their duties, comply with regulations (like cGMP), or meet deadlines could significantly delay development and commercialization[530](index=530&type=chunk)[531](index=531&type=chunk)[535](index=535&type=chunk) - **Intellectual Property Risks:** The company's success depends on obtaining and defending patents. These patents can be challenged, invalidated, or circumvented by competitors. Litigation to enforce IP is costly and uncertain[700](index=700&type=chunk)[701](index=701&type=chunk)[718](index=718&type=chunk) [Item 2. Properties](index=134&type=section&id=Item%202.%20Properties) The company leases its corporate headquarters in London, UK, and maintains additional office space in New York, NY - The company's corporate headquarters are leased in London, UK, and it also leases office space in New York, NY[942](index=942&type=chunk) [Item 3. Legal Proceedings](index=134&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings that would adversely affect its business or financial condition - As of the report date, the company is not involved in any material legal proceedings[954](index=954&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=135&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's ADSs trade on Nasdaq under "CMPS"; it has never paid dividends and intends to retain earnings for business development - The company's ADSs are listed on The Nasdaq Global Select Market under the ticker "CMPS"[957](index=957&type=chunk) - The company has never paid dividends and does not plan to in the foreseeable future, as it intends to retain all funds for business growth[960](index=960&type=chunk) Issuer Purchases of Equity Securities (Q4 2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2022 | 0 | $0 | | Nov 2022 | 0 | $0 | | Dec 2022 | 8,986 | $9.20 | | **Total Q4** | **8,986** | **$9.20** | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=136&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company incurred a net loss of $91.5 million in 2022, driven by increased R&D and G&A expenses, and holds $143.2 million in cash to fund operations [Results of Operations](index=141&type=section&id=Results%20of%20Operations) The net loss increased to $91.5 million in 2022, primarily due to higher R&D and G&A expenses, partially offset by increased other income from tax credits Consolidated Results of Operations (in thousands) | Account | FY 2022 | FY 2021 | Change | | :--- | :--- | :--- | :--- | | **Research and development** | $65,053 | $44,027 | $21,026 | | **General and administrative** | $45,350 | $39,194 | $6,156 | | **Total operating expenses** | $110,403 | $83,221 | $27,182 | | **Loss from operations** | $(110,403) | $(83,221) | $(27,182) | | **Total other income, net** | $19,306 | $11,678 | $7,628 | | **Net loss** | **$(91,505)** | **$(71,742)** | **$(19,763)** | - Research and development expenses increased by **$21.0 million** (**47.7%**) in 2022, driven by higher external development costs for preclinical studies and manufacturing, increased personnel expenses from team expansion, and higher non-cash share-based compensation[1016](index=1016&type=chunk) - General and administrative expenses increased by **$6.2 million** (**15.7%**) in 2022, primarily due to higher personnel costs from increased staffing, a rise in non-cash share-based compensation, and increased legal and professional fees[1007](index=1007&type=chunk) - The benefit from the UK R&D tax credit increased to **$14.4 million** in 2022 from **$9.6 million** in 2021, reflecting the growth in research activities[1024](index=1024&type=chunk) [Liquidity and Capital Resources](index=145&type=section&id=Liquidity%20and%20Capital%20Resources) Funded by equity, the company held $143.2 million in cash as of December 2022, with net cash used in operations increasing to $105.5 million, requiring future funding - As of December 31, 2022, the company had cash and cash equivalents of **$143.2 million**, deemed sufficient to fund operations for at least the next 12 months[1021](index=1021&type=chunk)[1058](index=1058&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | FY 2022 | FY 2021 | FY 2020 | | :--- | :--- | :--- | :--- | | **Net cash used in operating activities** | $(105,451) | $(67,745) | $(41,380) | | **Net cash used in investing activities** | $(596) | $(334) | $(628) | | **Net cash provided by financing activities** | $1,040 | $156,646 | $194,155 | - Net cash used in operating activities increased to **$105.5 million** in 2022, primarily due to a higher net loss and a significant increase in prepaid expenses, including the R&D tax credit receivable[1043](index=1043&type=chunk) - Future funding requirements are substantial and depend on the progress of clinical trials, regulatory approvals, and commercialization efforts. The company expects to finance these needs through equity or debt offerings, or collaborations[1051](index=1051&type=chunk)[1053](index=1053&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=152&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates the company's consolidated financial statements and supplementary data, appended at the end of the Annual Report - The company's consolidated financial statements are included at the end of the report, starting on page F-1[1175](index=1175&type=chunk) [Item 9A. Controls and Procedures](index=152&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[1234](index=1234&type=chunk)[1236](index=1236&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2022[1238](index=1238&type=chunk) - There were no material changes in internal control over financial reporting during the fourth quarter of 2022[1166](index=1166&type=chunk) Part III [Items 10, 11, 12, 13, and 14](index=154&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Part III incorporates information for Items 10-14 by reference from the forthcoming 2023 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the forthcoming 2023 Proxy Statement[1181](index=1181&type=chunk)[1417](index=1417&type=chunk)[1188](index=1188&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=155&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits filed with the Annual Report, including consolidated financial statements starting on page F-1 - The consolidated financial statements are located in a separate section starting on page F-1 of the report[1190](index=1190&type=chunk) - A detailed index lists all exhibits filed with or incorporated by reference into the Annual Report, including governance documents, material contracts, and certifications[1191](index=1191&type=chunk)[1192](index=1192&type=chunk) [Financial Statements](index=158&type=section&id=Financial%20Statements) Audited consolidated financial statements for 2020-2022, with an unqualified opinion, show $197.3 million in assets and a $91.5 million net loss in 2022 Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $143,206 | $273,243 | | **Total current assets** | $191,651 | $295,300 | | **Total assets** | $197,294 | $300,898 | | **Total current liabilities** | $15,596 | $15,107 | | **Total liabilities** | $16,014 | $16,486 | | **Total shareholders' equity** | $181,280 | $284,412 | Consolidated Statement of Operations Data (in thousands) | Account | FY 2022 | FY 2021 | FY 2020 | | :--- | :--- | :--- | :--- | | **Total operating expenses** | $110,403 | $83,221 | $51,393 | | **Loss from operations** | $(110,403) | $(83,221) | $(51,393) | | **Net loss** | $(91,505) | $(71,742) | $(60,334) | | **Net loss per share** | $(2.16) | $(1.79) | $(3.55) | - The independent auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion on the consolidated financial statements[1211](index=1211&type=chunk) - The critical audit matter identified was the significant management judgment involved in estimating the qualifying expenditures for the UK R&D tax credit, which totaled **$14.4 million** for 2022[1214](index=1214&type=chunk)[1217](index=1217&type=chunk)

COMPASS Pathways plc (NASDAQ:CMPS) Q3 2022 Earnings Conference Call November 3, 2022 8:00 AM ET Company Participants Steven Schultz - SVP, IR George Goldsmith - Co-Founder and Executive Chairman Kabir Nath - CEO Guy Goodwin - Chief Medical Officer Mike Falvey - CFO Conference Call Participants Charles Duncan - Cantor Fitzgerald Neena Bitritto-Garg - Citi Ritu Baral - Cowen Patrick Trucchio - H.C. Wainwright & Company François Brisebois - Oppenheimer Bert Hazlett - BTIG Esther Hong - Loop Capital Sumant Kulk ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ⊠ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number: 001-39522 COMPASS Pathways plc (Exact name of registrant as specified in its charter) England and Wales Not Applicable ( ...

COMPASS Pathways plc (NASDAQ:CMPS) Q2 2022 Earnings Conference Call August 4, 2022 8:00 AM ET Company Participants Steven Schultz - Senior Vice President, Investor Relations George Goldsmith - Co-Founder and CEO Dr. Guy Goodwin - Chief Medical Officer Mike Falvey - Chief Financial Officer Kabir Nath - New Chief Executive Officer Conference Call Participants Ritu Baral - Cowen Neena Bitritto-Garg - Citi Patrick Trucchio - H.C. Wainwright Charles Duncan - Cantor Fitzgerald Sumant Kulkarni - Canaccord Genuity ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ⊠ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number: 001-39522 COMPASS Pathways plc (Exact name of registrant as specified in its charter) England and Wales Not Applicable (State ...

COMPASS Pathways plc (NASDAQ:CMPS) Q1 2022 Earnings Conference Call May 10, 2022 8:00 AM ET Company Participants Steven Schultz - SVP, IR George Goldsmith - Chairman & CEO Guy Goodwin - Chief Medical Officer Mike Falvey - CFO Conference Call Participants Josh Schimmer - Evercore ISI Charles Duncan - Cantor Fitzgerald Neena Bitritto-Garg - Citi Ritu Baral - Cowen Bert Hazlett - BTIG Francois Brisebois - Oppenheimer Elaine Kim - Berenberg Patrick Trucchio - H.C. Wainwright Operator Good morning, and welcome t ...

Financial Performance - The company reported total net losses of $21.2 million for the three months ended March 31, 2022, compared to $12.7 million for the same period in 2021, resulting in an accumulated deficit of $190.8 million as of March 31, 2022[132]. - The company has not generated any revenue to date and does not expect to do so in the foreseeable future from the sale of therapeutic candidates[137]. - The company has incurred significant operating losses primarily due to research and development activities and anticipates further losses as it continues to develop COMP360 psilocybin therapy[132]. - Net cash used in operating activities was $23.1 million for the three months ended March 31, 2022, compared to $13.8 million for the same period in 2021[169][170]. - The company had accumulated trading losses for carry forward in the UK of $144.0 million as of December 31, 2021[155]. Cash Position - As of March 31, 2022, the company had cash and cash equivalents of $243.7 million, which is expected to fund operations into 2024[133]. - The existing cash balance of $243.7 million at March 31, 2022, is expected to be sufficient to fund operating expenses and capital expenditures into 2024[167]. - As of March 31, 2022, the company has $243.7 million in cash, which is projected to be sufficient to fund operating expenses and capital expenditures into 2024[178]. Research and Development - The Phase IIb clinical trial of COMP360 psilocybin therapy involved 233 participants and achieved a statistically significant reduction in depressive symptom severity with a 25mg dose compared to the 1mg arm[128]. - The company plans to initiate a Phase III program for COMP360 in the second half of 2022[128]. - A Phase II clinical trial for COMP360 psilocybin therapy in post-traumatic stress disorder (PTSD) will enroll 20 participants and is set to begin at King's College London[129]. - Research and development expenses increased by $8.5 million to $15.4 million for the three months ended March 31, 2022, compared to $6.9 million for the same period in 2021[157]. - The company expects research and development costs to continue to increase substantially in the near future[158]. General and Administrative Expenses - The company expects to incur increased general and administrative expenses as it expands its headcount and prepares for potential commercial operations[148]. - General and administrative expenses rose by $3.3 million to $10.1 million for the three months ended March 31, 2022, from $6.7 million in the same period of 2021[160]. - General and administrative expenses are anticipated to substantially increase due to ongoing growth initiatives and headcount expansion[161]. Strategic Partnerships and Initiatives - The company formed a strategic partnership with South London and Maudsley NHS Foundation Trust to accelerate psychedelic research and develop new mental health care models[130]. - The company is committed to advancing research on emerging psychedelic therapies through partnerships, such as with Sheppard Pratt[177]. Future Outlook and Funding - Future funding requirements may increase significantly due to various factors, including the progress of clinical trials for COMP360 and potential regulatory approval costs[179]. - The company plans to explore external business development opportunities through acquisitions, partnerships, and licensing deals to enhance its pipeline[177]. - The commercialization strategy includes establishing a sales, marketing, and distribution infrastructure to support the launch of COMP360 and other therapeutic candidates[175]. - The company aims to expand operations in the United States, Europe, and potentially other geographies[177]. - Significant costs are anticipated for establishing Centers of Excellence for research and innovation in mental health care[179]. - The company may finance cash needs through equity offerings, debt financings, and strategic alliances, which could dilute current ownership interests[182]. Market Risk - There have been no material changes in market risk exposures affecting disclosures since the last annual report[189].

COMPASS Pathways plc (NASDAQ:CMPS) Q4 2021 Earnings Conference Call February 22, 2022 2:00 AM ET Company Participants Steven Schultz - SVP, IR George Goldsmith - Chairman & CEO Guy Goodwin - Chief Medical Officer Mike Falvey - CFO Conference Call Participants Ritu Baral - Cowen and Company Charles Duncan - Cantor Fitzgerald Neena Bitritto-Garg - Citi Jason Shieh - H.C. Wainwright Josh Schimmer - Evercore ISI Esther Hong - Berenberg Bert Hazlett - BTIG Francois Brisebois - Oppenheimer Kyle Kim - Canaccord Ge ...

PART I [Business](index=8&type=section&id=Item%201.%20Business) COMPASS Pathways is a clinical-stage mental health care company focused on developing its proprietary psilocybin formulation, COMP360, in conjunction with psychological support for treatment-resistant depression (TRD) - The company's lead program is COMP360 psilocybin therapy, targeting treatment-resistant depression (TRD), a condition affecting approximately **100 million people globally**[20](index=20&type=chunk)[31](index=31&type=chunk) - In November 2021, COMPASS announced positive topline results from its 233-participant Phase IIb trial, the largest randomized, controlled, double-blind psilocybin therapy trial to date. The trial met its primary endpoint, with the **25mg dose showing a statistically significant reduction in depressive symptoms** compared to a 1mg dose at three weeks[20](index=20&type=chunk)[80](index=80&type=chunk) Phase IIb Trial (TRD) Key Efficacy Results (25mg vs 1mg dose) | Metric | Week 3 Result | Week 12 Result | | :--- | :--- | :--- | | **MADRS Score Change** | -6.6 difference (p<0.001) | - | | **Response Rate** | 36.7% vs 17.7% | - | | **Remission Rate** | 29.1% vs 7.6% | - | | **Sustained Response Rate** | - | 24.1% vs 10.1% | - The company's strategy includes initiating a Phase III program for TRD in 2022, expanding COMP360 into other indications such as PTSD (Phase II trial began Nov 2021), and exploring new compounds through its Discovery Center[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - COMPASS is building a new mental health care model by establishing 'Centers of Excellence' for research and therapist training, with the first one established in January 2021 with The Sheppard Pratt Institute[28](index=28&type=chunk)[143](index=143&type=chunk) - The company relies on contract drug manufacturing organizations (CDMOs) for the synthesis and manufacturing of COMP360 and does not own or operate its own manufacturing facilities[140](index=140&type=chunk) [Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, including a history of losses, funding needs, and dependency on its sole therapeutic candidate, COMP360 - **Financial Risk:** The company is a clinical-stage entity with a history of significant losses and expects to incur losses for the foreseeable future. Substantial additional funding is required to complete development and commercialization, and failure to obtain it could force delays or termination of programs[224](index=224&type=chunk)[227](index=227&type=chunk) - **Product Dependency Risk:** The business is highly dependent on the successful development and regulatory approval of its sole investigational therapy, COMP360 psilocybin therapy[233](index=233&type=chunk) - **Regulatory & Legal Risk:** COMP360 is subject to strict controlled substance laws (Schedule I in the U.S.) which require rescheduling by the DEA post-FDA approval, a process that could be lengthy and uncertain. Adverse public perception of psilocybin could also negatively influence success[236](index=236&type=chunk)[238](index=238&type=chunk)[242](index=242&type=chunk) - **Clinical & Commercialization Risk:** Clinical development is a lengthy, expensive process with uncertain outcomes. The company has no prior experience commercializing a therapy and success depends on market acceptance, therapist training, and establishing a network of third-party therapy sites[243](index=243&type=chunk)[267](index=267&type=chunk)[275](index=275&type=chunk) - **Third-Party Reliance Risk:** The company relies on third parties for manufacturing (CMOs) and conducting clinical trials (CROs). Failure of these parties to perform or comply with regulations could significantly delay or halt development[336](index=336&type=chunk)[339](index=339&type=chunk) - **Intellectual Property Risk:** The company's patents may be challenged, found invalid, or unenforceable. Third-party IP rights could also adversely affect the ability to commercialize therapies, potentially requiring costly litigation or licensing[313](index=313&type=chunk)[316](index=316&type=chunk)[324](index=324&type=chunk) [Unresolved Staff Comments](index=133&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[408](index=408&type=chunk) [Properties](index=133&type=section&id=Item%202.%20Properties) The company leases office space for its corporate headquarters in London, UK, with additional leased offices in San Francisco and New York City, USA - The company's corporate headquarters is leased office space in London, UK. It also leases office space in San Francisco and New York[408](index=408&type=chunk) - The company is part of the BioLabs@NYULangone incubator space and the START-UP NY program, which provide tax and other incentives[408](index=408&type=chunk) [Legal Proceedings](index=134&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material litigation or claims that would have a material adverse effect on its business - As of the report date, the company is not involved in any material legal proceedings[411](index=411&type=chunk) [Mine Safety Disclosures](index=134&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - No mine safety disclosures are required[412](index=412&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=134&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's American Depositary Shares (ADSs) have traded on The Nasdaq Global Select Market under the symbol "CMPS" since September 18, 2020, and it does not anticipate paying cash dividends - The company's ADSs, each representing one ordinary share, are listed on The Nasdaq Global Select Market under the symbol "CMPS"[414](index=414&type=chunk) - The company has never paid cash dividends and does not plan to in the foreseeable future, as it intends to retain earnings to fund business growth[415](index=415&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=135&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company reported a net loss of **$71.7 million** for 2021, an increase from **$60.3 million** in 2020, driven by higher R&D and G&A expenses, with **$273.2 million** cash as of December 31, 2021 Results of Operations (in thousands) | Line Item | 2021 | 2020 | | :--- | :--- | :--- | | Research and development | $44,027 | $23,366 | | General and administrative | $39,194 | $28,027 | | **Loss from operations** | **($83,221)** | **($51,393)** | | Total other income (expense), net | $11,678 | ($8,909) | | **Net loss** | **($71,742)** | **($60,334)** | - Research and development expenses increased by **$20.7 million** in 2021, primarily due to a **$16.1 million** increase in external development costs related to clinical trials and a **$6.0 million** increase in personnel expenses from hiring[437](index=437&type=chunk) - General and administrative expenses increased by **$11.2 million** in 2021, driven by a **$7.9 million** increase in personnel costs from new hires and a **$9.0 million** increase in facilities and other expenses, including higher D&O insurance[441](index=441&type=chunk) - As of December 31, 2021, the company had cash and cash equivalents of **$273.2 million**, which is expected to fund operations into 2024[423](index=423&type=chunk)[453](index=453&type=chunk) - Net cash used in operating activities was **$67.7 million** in 2021, compared to **$41.4 million** in 2020, reflecting the increased net loss and changes in working capital[454](index=454&type=chunk)[455](index=455&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=152&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations and foreign currency exchange rate fluctuations, with no current hedging instruments - The company's main market risks are interest rate risk on its cash holdings and foreign currency exchange risk[480](index=480&type=chunk) - Foreign currency risk arises from operating in multiple currencies (USD, GBP, EUR), with the reporting currency in USD and the primary functional currency in GBP. The company does not currently use currency hedging[483](index=483&type=chunk) [Financial Statements and Supplementary Data](index=153&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates the company's consolidated financial statements and supplementary data by reference, appended at the end of the Annual Report - The company's audited consolidated financial statements are included at the end of the report, beginning on page F-1[484](index=484&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=154&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - There were no disagreements with accountants on accounting and financial disclosure[486](index=486&type=chunk) [Controls and Procedures](index=154&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with the latter audited by PricewaterhouseCoopers LLP - Management concluded that disclosure controls and procedures were effective as of December 31, 2021[487](index=487&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2021. This assessment was audited by the company's independent registered public accounting firm[488](index=488&type=chunk) [Other Information](index=154&type=section&id=Item%209B.%20Other%20Information) This section summarizes material U.S. federal income tax and UK tax consequences for holders of the company's shares or ADSs, including potential PFIC/CFC risks - Provides a summary of material U.S. federal income tax and UK tax consequences for holders of ordinary shares or ADSs[491](index=491&type=chunk) - Discusses the risk of the company being classified as a Passive Foreign Investment Company (PFIC) or a Controlled Foreign Corporation (CFC), which could lead to adverse U.S. tax consequences for certain U.S. holders[497](index=497&type=chunk)[379](index=379&type=chunk) - Dividends paid by the company are not subject to UK withholding tax[515](index=515&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=162&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding the company's directors, executive officers, and corporate governance will be provided in the Proxy Statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference - Required information is incorporated by reference from the company's upcoming Proxy Statement for the 2022 Annual Meeting of Stockholders[536](index=536&type=chunk) [Executive Compensation](index=162&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation will be provided in the Proxy Statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference - Required information is incorporated by reference from the company's upcoming Proxy Statement for the 2022 Annual Meeting of Stockholders[537](index=537&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=163&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, as well as related stockholder matters, will be provided in the Proxy Statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference - Required information is incorporated by reference from the company's upcoming Proxy Statement for the 2022 Annual Meeting of Stockholders[539](index=539&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=163&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related party transactions, and director independence will be provided in the Proxy Statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference - Required information is incorporated by reference from the company's upcoming Proxy Statement for the 2022 Annual Meeting of Stockholders[540](index=540&type=chunk) [Principal Accountant Fees and Services](index=163&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services will be provided in the Proxy Statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference - Required information is incorporated by reference from the company's upcoming Proxy Statement for the 2022 Annual Meeting of Stockholders[541](index=541&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=164&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Annual Report - This item provides an index of the financial statements and exhibits filed with the Annual Report[544](index=544&type=chunk)[546](index=546&type=chunk) [Form 10-K Summary](index=166&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for Form 10-K - No Form 10-K summary is provided[551](index=551&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=168&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an unqualified opinion on the company's consolidated financial statements and internal control over financial reporting as of December 31, 2021 - The independent auditor, PricewaterhouseCoopers LLP, issued an unqualified (clean) opinion on both the consolidated financial statements and the effectiveness of internal control over financial reporting[556](index=556&type=chunk) - The audit identified one Critical Audit Matter: the significant management judgment required to determine the amount of qualifying expenses for the UK's Research and Development (R&D) tax credit[561](index=561&type=chunk) [Consolidated Financial Statements](index=170&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position, results of operations, and cash flows, showing a **$71.7 million** net loss in 2021 and **$273.2 million** cash as of December 31, 2021 Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $273,243 | $190,327 | | Total current assets | $295,300 | $202,404 | | **Total assets** | **$300,898** | **$203,456** | | Total current liabilities | $15,107 | $6,895 | | **Total liabilities** | **$16,486** | **$6,895** | | **Total shareholders' equity** | **$284,412** | **$196,561** | Consolidated Statement of Operations Data (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Research and development | $44,027 | $23,366 | $12,563 | | General and administrative | $39,194 | $28,027 | $8,616 | | **Loss from operations** | **($83,221)** | **($51,393)** | **($21,179)** | | **Net loss** | **($71,742)** | **($60,334)** | **($19,612)** | Consolidated Statement of Cash Flows Data (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | ($67,745) | ($41,380) | ($17,813) | | Net cash used in investing activities | ($334) | ($628) | ($165) | | Net cash provided by financing activities | $156,646 | $194,155 | $18,379 |