Compass Pathways Delays Phase 3 Psilocybin Trials, Cuts 30% of Workforce to Conserve Cash

Delays in Phase 3 Trials:
Compass Pathways has announced delays in two key Phase 3 clinical trials for its psilocybin program. The COMP005 trial, originally expected to release data by the fourth quarter of 2024, is now postponed to the second quarter of 2025. The COMP006 trial, examining fixed psilocybin doses, has been delayed by about a year, targeting the second half of 2026 for data readouts.

Workforce Reduction:
To conserve cash and ensure funding through the COMP005 milestone, Compass Pathways has laid off 30% of its workforce, including senior management roles and preclinical research initiatives. This restructuring aims to preserve cash reserves, allowing the company to maintain operations up to the 2026 target.

Reasons for Delays:
The delays are attributed to unexpected complexities in trial logistics, such as arranging therapist participation and scheduling multiple dosing sessions for patients. Additionally, concerns over "functional unblinding" in psychedelic research, highlighted by regulators following Lykos Therapeutics' MDMA trials, have led Compass to tighten blinding controls to ensure robust data.

Financial Impact:
The delays and workforce reduction have led to a 23.02% drop in Compass Pathways' shares, trading at $4.76 per share. The company has $207 million in cash on hand and hopes that the COMP005 results could catalyze new funding or partnership opportunities.

Commercialization Plans:
Despite the challenges, Compass Pathways remains confident in the potential effectiveness of its COMP360 program for treatment-resistant depression. The company anticipates that licensed psychiatric nurses or nurse practitioners could manage the administration of psilocybin, streamlining commercial scalability.