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The company said its psilocybin drug reduced depression symptoms by 3.6 points on a rating scale compared to a placebo, meeting its goal but falling short of Wall Street expectations. The study evaluated 258 adults for a change in their symptoms at six weeks, Compass said Monday.
Investors had been expecting a five-point difference, RBC Capital Markets analyst Leonid Timashev said in a May note to clients.
Compass Pathways' American depositary receipts fell as much as 37% in early trading on Monday.
Still, Compass executives said the results would offer new momentum for psychedelic therapy. 'We've always said we were looking for a three-point or greater difference,' said Chief Medical Officer Guy Goodwin.
Compass is hoping to give a boost to a nascent field that's seeking to legitimize mind-altering drugs for the treatment of mental health.
Psilocybin is now the furthest along in development of any classic psychedelic since the Food and Drug Administration rejected Lykos Therapeutics Inc.'s MDMA for post-traumatic stress disorder last year, saying there wasn't sufficient data to prove it was safe and effective.
'Seeing this kind of meaningful improvement from a single dose is incredibly important — for patients, for caregivers, and for the entire field,' said Compass Chief Patient Officer Steve Levine.
Compass's study looked at patients suffering from depression who hadn't been helped by at least two other treatments. About 21 million US adults have major depressive disorder, and about 30% of them have this form of depression, known as treatment-resistant depression.
Chief Commercial Officer Lori Engelbert said it was notable that patients saw sustained improvements six weeks after just one dose of medication. 'I don't think psychiatry has seen anything like this,' she said, 'with one administration lasting this long.'
In psychedelic trials, patients often know whether they've received the real drug, which can make placebo comparisons tricky.
'If we'd come out with a massive difference between active and placebo, then people would have said 'Oh, well, you can't trust placebo,'' Goodwin said, because experts worry trial participants might know whether they're on the drug or not.
An independent board reviewed safety data for Compass's trial and found no clinically meaningful imbalance in suicidal thinking between the treatment and placebo, the company said. One concern with psilocybin is it could worsen suicidal thoughts of people with depression.
This is the first of two late-stage trials for the drug, which is a synthesized version of an active ingredient in mushrooms. The second trial evaluated patients who got two doses of psilocybin. The company expects to release data from that trial next year.
The company is also studying the drug in adults with PTSD.
In recent years, magic mushrooms, MDMA and other psychedelics have been pitched as a panacea for several disorders including depression, PTSD, anxiety, nicotine addiction and anorexia. But Lykos's failure at the FDA has been viewed as a setback for the field.
Recently, psychedelics supporters have found new hope from Robert F. Kennedy Jr., who is now the Health and Human Services secretary. Last year, Kennedy said that his mind 'is open to the idea of psychedelics for treatment,' adding that 'people ought to have the freedom and the liberty to experiment with these hallucinogens to overcome debilitating disorders.'
If approved, Compass's drug would compete with Johnson & Johnson's Spravato, which is related to ketamine and generated over $1 billion in sales last year. Other biotechs developing psychedelics include GH Research PLC and Atai Life Sciences NV.
(Updates with shares in fourth paragraph.)
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