2020 has been a banner year for the psychedelic sector and we believe that the industry is in the early stages of a major growth cycle.
Last week, Compass Pathways announced a major milestone and filed to go public on the Nasdaq Global Market under the symbol CMPS. The leading psychedelic therapy company is a high-profile opportunity that is backed by tech billionaire Peter Thiel and lead investor Christian Angermayer.
When compared to its peers, we believe that Compass represents an advanced opportunity that is focused on developing psychedelic therapies for the treatment of mental illnesses such as depression. The company was founded almost four years ago and has been nothing short of an execution story. Compass plans to raise $100 million in the initial public offering (IPO) and plans to use the proceeds to advance its therapies through Food and Drug Administration (FDA) clinical trials.
In 2018, Compass announced that the FDA had granted it breakthrough therapy status, which expedited the development process and puts the company in a league of its own.
In the public offering filing, Compass said that early signals from academic studies that use formulations of psilocybin have shown that psilocybin therapy could improve outcomes for patients that suffer from depression. Although studies that were highlighted by Compass analyzed products that were not developed by it, we are favorable on the data that was highlighted from the study.
According to data from Crunchbase, Compass has raised more than $115 million since inception and has one of the strongest balance sheets when compared to other companies in the sector. Compass’s largest shareholder is psychedelic drug firm Atai Life Sciences AG, which is controlled by Angermayer, which has invested in several compounds that have been studied for treatment of mental illness and opioid addiction.
We are favorable on the relationship that Compass has with Atai and will monitor how both stories continue to evolve. Going forward, we expect Compass’ offering to generate significant interest and is an opportunity to be aware of.
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