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Presentation

COMPASS Pathways plc misses on earnings expectations. Reported EPS is $-0.38 EPS, expectations were $-0.37.

Operator: Hello, everyone, and welcome to COMPASS Pathways Second Quarter 2025 Earnings Conference Call. Please note that this call is being recorded. [Operator Instructions] I’d now like to hand the call over to Steve Schultz, Senior Vice President of Investor Relations. You may now go ahead, please.

Stephen D. Schultz: Welcome all of you, and thank you for joining us today for our second quarter 2025 results conference call. Again, my name is Steve Schultz, Senior Vice President of Investor Relations at COMPASS Pathways. Today, I’m joined by Kabir Nath, our Chief Executive Officer; and Teri Loxam, our Chief Financial Officer, who will have prepared remarks. In addition, Dr. Guy Goodwin, our Chief Medical Officer; Dr. Steve Levine, our Chief Patient Officer; and Lori Englebert, our Chief Commercial Officer, will be available for the Q&A. The call is being recorded and will be available on the COMPASS Pathways Investor Relations website shortly after the conclusion of the call and will be available for a period of 30 days.

Before we begin, let me remind everyone that during the call today, the team will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. You should not place undue reliance on these forward-looking statements. Actual events or results could differ materially from those expressed or implied in any forward-looking statements as a result of various risks, uncertainties and other factors, including those risks and uncertainties described under the heading Risk Factors in our most recent quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission and in subsequent filings made by COMPASS with the SEC. Additionally, these forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.

We specifically disclaim any obligation to update or revise any forward-looking statements even if our estimates or assumptions change. I will now hand the call over to Kabir Nath.

Kabir Kumar Nath: Thank you, Steve. Good day, everyone, and thank you for joining us. Let me begin by welcoming Justin Gover to the COMPASS Board of Directors. Justin was the CEO and one of the founders of GW Pharmaceuticals, and we’re truly excited to have access to his expertise. Under Justin’s leadership, Epidiolex, the first cannabis plant-derived medicine to be approved by the FDA had a successful commercial launch. I look forward to leveraging his expertise as we embark on a similar path to gain FDA approval and launch COMP360 for TRD. In addition to announcing the addition of Justin to the Board earlier this week, we announced that Dr. Linda McGoldrick will be retiring from the Board at the end of October after a transition period.

I’d like to thank Linda for her service on the Board over the last 5 years where she was instrumental in supporting the growth of the company through the IPO and subsequent developments. Turning now to our operations. This has been an exciting year for COMPASS. In late June, we announced the successful achievement of the primary endpoint of the COMP360, 005 trial, the first of our 2 pivotal Phase III trials. The positive results were highly statistically significant demonstrating a clinically meaningful reduction in depression and no unexpected safety findings based on the latest data reviewed by the independent DSMB. This assessment included all data reviewed by the DSMB to date from both the 005 and 006 trials going beyond the 6-week time point for 005 alone.

There was a 3.6 point difference in change from baseline in mattress between the 25-milligram and the placebo arms at 6 weeks, exceeding the 3-point difference that is both clinically meaningful and commercially viable. While cross-trial comparisons are always challenging, this difference sustained to 6 weeks with a single administration of COMP360 is similar to the difference seen at 4 weeks in the pivotal trials for the blockbuster drug SPRAVATO, which required 8 administrations. So we believe the result that we have seen at 6 weeks with COMP360 is both clinically and commercially compelling. With this positive data, COMPASS has delivered 2 for 2, announcing positive, highly statistically significant results from 2 robust late-stage studies of over 230 patients each in a very difficult-to-treat patient population in depression.

Given the track record of previous studies in psychiatry, particularly in severe depression, our achievement of 2 positive late-stage studies is remarkable and provides important clinical validation for COMP360 treatment potential in TRD. We plan to meet with the FDA to discuss these results and explore next steps in getting COMP360 to patients as rapidly as possible, patients who so desperately need new treatment options. The second pivotal Phase III trial, COMP006 continues to recruit well and we confirm that we’re on track to disclose the 26-week data in the second half of next year. As a reminder, the protocol for this trial has a second dose after 3 weeks with the 6-week primary endpoint assessment, therefore, only 3 weeks after the second administration.

We should also get some good information on the effects of a second dose as part of the 26- week 005 data given that subject to specific retreatment criteria, participants can get another dose in Part B, which runs from the 6- week time point through 26 weeks. To prepare for a potential commercial launch, our team continues to work with a broad array of mental health care providers, both through our strategic collaborations and through our field medical team to refine our understanding of how COMP360 treatment will fit into existing setting of care. We’re frequently asked by investors how COMP360 will be viewed by providers who are used to the approximately 3 hours SPRAVATO treatment window. Through our discussions with these providers, we know that patient preference will be a driving factor in treatment selection.

As you’re well aware, SPRAVATO patients need to be driven to the clinic frequently, which is a burden to the patient and caregiver and generally, they’re not able to return to work that day. In addition, we believe that the added administrative burden and the work required to turn a room potentially multiple times may actually favor COMP360 from a practice standpoint. Finally, the CPT 3 code specific to psychedelics that were put in place back in early 2024, provide for hourly reimbursement. So regardless of the length of the administration for COMP360, the provider will be covered. Steve and Lori can go into much more detail on all of this. Beyond TRD, we’re also excited about the potential for COMP360 and PTSD. We’re in the final steps of designing a late-stage clinical program in PTSD, and we look forward to updating you when that design is finalized and once we’ve reviewed it with the FDA.

Given the high unmet need and limited current treatment options, we see a significant commercial opportunity in PTSD. In addition, as you know, we have been running a small Phase II study in anorexia. This was a double-blind, randomized, controlled Phase II clinical trial, investigating the safety and efficacy of COMP360 psilocybin treatment in participants with anorexia nervosa. It was a multicenter study, which enrolled 32 participants. The study has now completed, and we recently received the data. From an efficacy standpoint, there was an encouraging positive signal in the reduction of eating disorder and depressive symptoms in the 25-milligram arm, which was sustained through 12 weeks. However, the low overall numbers of participants and the high number of dropouts in the control arm limited statistical power.

The safety profile was aligned with the high-risk patient population in anorexia and no unexpected safety signals were reported. As we’ve discussed before, this is a difficult condition to study. We’re proud of the data that we’ve been able to generate, and we’ll publish or present the full data set in future. With that, let me now hand the call to Teri to go through some financial updates before we move on to Q&A.

Teri Loxam: Thank you, Kabir. At the end of June, we had cash and cash equivalents of $222 million, which we expect to fund our operations into 2027. This compares with $260 million that we had at the end of the first quarter. Debt under the Hercules loan facility was $30.9 million at the end of the second quarter. Cash used in operations for the second quarter was $38.7 million, and we expect net cash used in operations for the full year 2025 to be within the range of $120 million to $145 million. We’re energized by the positive 005 primary results which we believe has derisked the company from a regulatory and commercial perspective. And we look forward to the upcoming 26-week data from both Phase III trials. We are finalizing a PTSD study and look forward to updating you soon on that design and time line.

2025 has already been an important year for the company. And the remainder of this year and 2026 is shaping up to be even more exciting. We are heads down focused on continuing to execute on our pivotal program while exploring all opportunities to get COMP360 to patients suffering from hard-to-treat depression in PTSD as quickly as possible. As mentioned in the beginning of the call, Dr. Guy Goodwin, Dr. Steve Levine and Lori Englebert will also be available for Q&A. Thank you, and I’ll now turn the call over to the operator for a Q&A.

Operator: [Operator Instructions] Your first question comes from the line of Paul Matteis of Stifel.

Paul Andrew Matteis: Paul Matteis from Stifel here. I was curious if you could expand upon the engagement you’ve had with the FDA since the data. What do you think the scenarios are here where you could have an accelerated path for a filing. And the same scenarios, I guess, do you think you actually could move quickly enough where the second Phase III study wouldn’t read out before you submit or during the review? I guess like is there a real way to actually move ahead of that data? Or are we going to ultimately, of course, get that data before there is any sort of regulatory decision in any scenario?

Kabir Kumar Nath: Thanks very much, Paul. It’s Kabir. I’m just checking, you can hear me clearly.

Paul Andrew Matteis: Yes.

Kabir Kumar Nath: Thanks, Paul. So thank you for the question. So as we’ve said, we have requested and we will be meeting with the FDA in this quarter. As we said on the call, we are 2 for 2 now in treatment-resistant depression. So Phase IIb with over 230 patients, this Phase III with the primary endpoint data, 250 patients, and importantly, consistent data across the trials. While the IIb, of course, the primary endpoint was at 3 weeks. As you know, at 6 weeks, we did see a statistically significant difference. And actually, it’s a pretty similar difference to what we’ve seen here in the Phase III. So we are 2 for 2, we believe, in a very hard-to-treat patient population and one in urgent need of new interventions. So to your point, it clearly is the right thing to ask what accelerated pathways may be available, and that’s exactly what we are planning to do.

I’m not at this stage going to handicap the chances and obviously, we need to have that meeting with the agency in quarter 3, see what their view is. We’re obviously encouraged by the fact that there are other leaders within the administration more broadly, who seem to share our view in the potential and share our view that there are grounds to move this more quickly. But in terms of specifically which elements of 005 or whether part of 006 will be needed, that really depends on our discussions with the agency.

Paul Andrew Matteis: Kabir, just on your last comment there, understanding you request a meeting and meet with folks with the psychiatry division, are there plans or expectations or you’ll be engaging with others that are more senior at the FDA or within HHS as well?

Kabir Kumar Nath: Yes. But I’m not going to go into details of those, but yes, absolutely. We recognize that this needs to be a concerted approach using whatever levers we can. But I might just ask Lori to comment on some of the work we have been doing around the broader engagement of stakeholders, not just in the administration, but actually in the political environment as well because we recognize that’s also a critical part of this.

Lori Englebert: Yes. Thanks, Kabir. Paul, so obviously, we are very encouraged by statements that have been made by Secretary Kennedy as well as the Commissioner. They — as Kabir stated, they’re very clearly viewing psychedelics as a potential to treat these patients who have otherwise limited options. We’ve seen that through examples of them appointing Matt Zorn, Mike Davis, this seems all very positive for the industry in and of itself. We also have been spending quite a bit of time in D.C. as the potential first-to-market company in the psychedelic space. We do find — we do take it very seriously that we want to make sure that everyone is well educated and informed. And so we’ve been spending quite a bit of time there. And what we’re finding is that members of Congress are also highly receptive not only to the BA sector, which, of course, they care very much about and gets a lot of commentary, but also for the broader patient population.

So we are encouraged by the conversations that we’re having and continue — we want to continue our efforts there.

Kabir Kumar Nath: And Paul, one thing I should have said and to add, you’ll be aware that last week, the formal application process for the Commissioner’s National Priority Review Voucher, the one that promises a very accelerated time line open. So we have submitted our application for that along, I’m sure with many other companies, but we did do that as well.

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

Unidentified Analyst: This is Luis in for Patrick. I would like to ask a little bit on the collaboration, the strategic collaborations that you are putting in place for the interventional psychiatry treatment centers. How are they progressing? What feedback have you received about readiness for COMP360 deliveries approved? And how confident that the existing network of centers that you’ve already engaged with will support the delivery of 360 if approved?

Kabir Kumar Nath: Luis, I’ll pass to Steve to answer that.

Steve Levine: Thanks. Luis, thanks for the question. Yes, we have been engaged now in the work with these collaborations for the past couple of years. As a reminder, they are representative of the broad swath of sites of mental health care delivery in this country, including hospital systems, interventional psychiatry networks, community behavioral health and others. And what we are finding in this work, and as a reminder, some of them deliver SPRAVATO today and those that do are high representative of the 6,000 centers that are currently delivering SPRAVATO around the country. And one thing is abundantly clear. It’s that this work is reinforcing our conviction that COMP360, if approved, fits directly into the infrastructure that is delivering SPRAVATO today.

If you look at a SPRAVATO room, it looks like what is necessary for COMP360, the staffing of these centers is what we believe will be required to deliver COMP360. And so we are very confident that the network is ready if and when we get approval. And even if that approval is accelerated, it is weighted in.

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

Gavin Clark-Gartner: Congrats on the progress. First, I was just curious if you’ve seen a pickup in 006 enrollment following the 005 data? And then secondly, just following off your last point on the commercial side of things, do you have an estimate for what percent of SPRAVATO use is given in single rooms versus kind of group room settings where multiple people can be monitored at the same time?

Kabir Kumar Nath: Thanks, Gavin. So I’ll take the first one. So the 005 data has been viewed very positively by investigators not only in 005 and 006, we’re now in that kind of the really steeper center point of the 006 recruitment, and it’s going extremely well, which is why we’re able to reconfirm our guidance for data in the second half of next year. But yes, I would say, in general, the reception from investigators to the data has been very positive and has reinforced their belief in the potential of 006 and frankly, the derisking both from a clinical and regulatory perspective. And I’ll hand to Steve for the second question.

Steve Levine: Gavin, regarding your question about whether SPRAVATO is currently delivered in individual rooms versus in group settings, it is primarily in individual rooms, and that is another reason why we believe that infrastructure is in place. There is the likelihood that adds these products mature in the market, and they are commonly delivered, sites may look at various models to deliver them. But again, currently, today, it’s primarily in individual rooms and ready to deliver COMP360 when available.

Operator: Next question comes from the line of Ritu Baral of TD Cowen.

Chi Wen Chin: This is Athena Chin on for Ritu Baral. Are you guys pursuing the Commissioner’s National Priority Voucher? And what is your understanding of the criteria to meet eligibility?

Kabir Kumar Nath: Athena, yes, if I did actually just confirm that in an earlier question, we did submit our application. We also do as part of our briefing book for the meeting with the FDA, raised that question. So in terms of the criteria, I believe there were 5 priorities listed, and they include significant need public health crisis, both of which we clearly hit, innovative treatments also. There are also ones around manufacturing and global pricing, which are less relevant to us, but it’s clear that the criteria don’t expect a company to hit all 5 of those, and we believe on 3 of them, we very clearly tick those boxes. It also requires you to be ready to start submitting elements of a finding package, and we clearly are in terms of CMC and some of our other preclinical and so on.

We’re in very good shape with that. So we think we’re a great candidate. We recognize that there are, in theory, only 5 pilots that we would be taken forward. And we also recognize that the decisions were due to be made by the CMO, but it appears that the CMO at the FDA is currently a vacant position as of Monday night. So what the process is, we don’t know. But we believe absolutely meet the criteria, and that’s why we submitted.

Operator: Next question comes from the line of Judah Frommer of Morgan Stanley.

Judah C. Frommer: Just following up on kind of your commentary regarding interactions with the agency. It seems like there is some high-level connectivity. But are you able to comment on consistency of interaction with kind of mid and lower level members at the agency. Just curious if there’s been consistency within team makeup in the teams that you’re talking to?

Kabir Kumar Nath: Thanks, Judah. And nice to meet you. And the answer is absolutely. So as a reminder, we have breakthrough designation. And as we’ve always said, we have consistently had excellent engagement with the psychiatry division. Currently, we’ve seen no change to either the staffing, the level of engagement, the responsiveness and so on. So at the day-to-day level with the FDA, we remain very tightly aligned with the good relationships and no changes.

Operator: Next question comes from the line of Leonid Timashev of RBC Capital Markets.

Leonid Timashev: I had one on safety, especially as it relates to redosing. So I guess, how are you guys thinking about the risk of suicidality or any elevations in suicidal ideation? Are you thinking that after — that could occur after every dose of COMP360 or potentially every dose of placebo? Or is it just something that occurs after the first dose on the study? I guess do you have any data that you can speak to with respect to that? And then relatedly, I know in the anorexia study, you said there were no unexpected safety signals. I wonder if you could just talk a little bit more about what you saw in terms of safety from the anorexia study, especially on suicidality.

Kabir Kumar Nath: Thanks, Leonid. And I’ll pass to Guy in a moment, but first, just as we’ve always said, the statement we made last month from the DSMB did refer to all data they were seeing today from both 005 and 006, so including the study that has the second dosing. But let me hand to Guy for more — importantly a broader discussion of that. Guy, please.

Guy Goodwin: Yes. I think we have to be a bit — we don’t have a detail on the time course of the suicidality that is being seen in 005 and 006. All we know is that there’s no imbalance between the arms. So I can’t really comment on directly to your question except to sort of be reassuring about the fact that there isn’t a clear effect of the drug that’s much more likely to be an effect of the illness, and that will depend obviously on how people have responded and how the response is maintained. So we will certainly have all that information in due course, but not at the moment. It’s a good question about the anorexia group. This was a small study, remember, but it was clear that we saw higher rates of suicidality than we are used to see just measured as events in that group.

That was true in both the arm receiving 1 milligram and the arm receiving 25 milligrams. So again we have no imbalance between the arms, but higher overall rates, reflecting the fact that it’s a more dangerous condition from the point of view of mortality. It has the highest mortality of any psychiatric disorder. And suicide is one of the leading causes along with the physical problems that patients also encounter. So the safe — relative safety of our treatment in this high-risk group is, again, a reassuring thing really for the whole program.

Operator: The next question comes from the line of Sumant Kulkarni of Canaccord Genuity LLC.

Sumant Satchidanand Kulkarni: What is the earliest that you could file a new drug application for COMP360? And how should we think about when you might announce a time line for reporting Part B from the COMP005 trial? And then I have a follow-up.

Kabir Kumar Nath: Thanks, Sumant. So again, I’ll refer you to my earlier answer until we’ve met with the agency. It’s premature to speculate on exactly what that could be because we really need to reach alignment on what data they would like to see and the process for that. As we have said before, we will, in due course, announce the full enrollment of 006. As and when we do, that will be the point at which we can all look at our calendars and project forward because as a reminder, we have said 26 weeks of 005, Part B of 005, we will only release once all patients are through Part A of 006 in order to avoid any potential suggestion that there’s a compound between those 2 sets of data.

Sumant Satchidanand Kulkarni: Got it. And how onerous is the process to submit an application for the Commissioner’s Priority Review program in terms of any trial data necessary? And is there any Phase III related efficacy or durability data in that application or your briefing book that investors are not seeing yet?

Kabir Kumar Nath: So in terms of what was required to submit for it, it’s a 350-word abstract. So I could safely say that there was no data included in that. And again, I think as we’re all aware, it’s unclear what the selection criteria are actually going to be for the pilots. And no, to confirm, I mean, we have no more Phase III data than is out in the public domain, and that we have already released.

Operator: I’d now like to hand back the call over to the management for final remarks.

Kabir Kumar Nath: Thank you very much. So thanks, everyone, for your attention this morning. We’re excited about the progress that we have made and the progress we’re continuing to make. We’ve delivered 2 positive late-stage studies in treatment-resistant depression, which is remarkable and likely a unique achievement. With that, we’re also very encouraged by the signals we’re hearing from within the administration and more broadly about them sharing our belief in the potential for these transformative treatments for patients who have so few options, and we’re committed to working with the appropriate regulatory and administration authorities to see what we can do to advance COMP360 for treatment- resistant depression. In addition, we will be, in due course, announcing the design of a PTSD study.

I think particularly with recent events, again, at the agency, it’s very clear that there is an urgent need for new treatments for PTSD, and we’re excited to move COMP360 forward in that as well. So thanks again for your attention this morning. I wish everyone a good day.

Operator: This concludes today’s call. You may now disconnect. Goodbye.