CMPS Stock Slumps Premarket As $150M Offering Cuts Into Psychedelic Trial Buzz

• CMPS reported positive Phase 3 data for COMP360, with the synthetic psilocybin therapy delivering statistically significant benefits.
• The trial showed symptom reductions of over 25% in 25% of COMP005 participants and 39% of COMP006 participants at the 25 mg dose.
• The company plans to release 26-week COMP006 data in Q3 and prepare COMP360 for a potential commercial launch by the end of the year.

Shares of Compass Pathways (CMPS) slid 7% in premarket trading on Wednesday after the company announced a proposed $150 million public offering, tempering enthusiasm that followed its Phase 3 clinical trial success in depression.

CMPS Stock surged to its best session since September 2020 on Tuesday after surging over 31%. However, shares fell 5% in after-hours trading. 

Compass Seeks Funding After Positive Trial Data

Compass said it will sell $150 million of American Depositary Shares (ADS), each representing one ordinary share of the company, and, in the case of certain institutional investors, pre-funded warrants to purchase ADSs. The company also expects to issue underwriters a 30 day option to purchase up to an additional $22.5 million in ADS.

The capital raise comes after Compass said it met the primary endpoint in two Phase 3 trials of COMP360, its proprietary synthetic psilocybin therapy for treatment-resistant depression. The company said COMP360 is the first classic psychedelic to consistently deliver a "statistically significant" and "clinically meaningful" benefit with a well-tolerated safety profile.

In the COMP006 study, patients who received a 25 mg dose of COMP360 showed a significantly greater reduction in depression symptoms than those given a 1 mg dose. Compass said symptom reductions of over 25% were seen in 25% of participants in COMP005 and in 39% of participants in COMP006.

FDA And Data Catalysts Ahead

Compass said it has requested a meeting with the U.S. Food and Drug Administration (FDA) to discuss a rolling review and expects to submit a New Drug Application in the fourth quarter. 

Meanwhile, COMP360 is entering late-stage clinical development after the FDA accepted an Investigational New Drug application for the treatment of post-traumatic stress disorder earlier this year. The company also expects to release its 26-week Part B data from the COMP006 study during the third quarter and said it is working to prepare COMP360 for a potential launch before the year’s end.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment for CMPS was ‘extremely bullish’ amid over a 1,400% surge in 24-hour message volume.

One user kept a bullish view on the stock in anticipation of “new PTs and upgrades in AM”

Another user said, “Here we go again! Long live the psychedelic renaissance! Compass will be the pioneer!”

CMPS stock has risen 11% so far this year.

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