Compass cuts 30% of staff as late-stage psilocybin drug trials face new delays
Compass Pathways (NASDAQ: CMPS) plans to cut about 30% of its workforce and halt early-stage research programs as the firm focuses resources on completing late-stage trials of its lead COMP360 program.
The London-based company announced the restructuring alongside third-quarter financial results that showed a widening net loss of $38.5 million versus $33.4 million a year earlier. The job cuts will include eliminating some senior management positions as Compass zeroes in on its lead drug candidate, the company said Thursday.
“Ensuring the success of our lead COMP360 program is our absolute priority,” CEO Kabir Nath said in a statement. “The shift in the phase 3 pivotal program timeline has forced us to look carefully at our operations and ensure that every resource is focused on this goal.”
The company now expects top-line data from its main Phase 3 trial in the second quarter of 2025, with results from a second late-stage study, COMP006, pushed to the second half of 2026.
Compass cited “increased regulatory scrutiny” around maintaining the blinded nature of psychedelic drug trials, the company said in its earnings release. Compass will now wait to release data until after the 26-week follow-up period.
The restructuring comes just months after RBC Capital Markets initiated coverage with an “Outperform” rating, citing potential peak revenues of $2.3 billion from its psilocybin program. RBC analyst Leonid Timashev had set a $23 price target in July, seeing a “high likelihood of a positive Phase 3 readout.”
Founded in 2016, Compass was among the first psychedelic drug developers to go public, listing on the Nasdaq in 2020. The company has undergone lots of changes this year, with Goldsmith and fellow co-founder Malievskaia stepping down from the board in March as the company transitioned “from a founder-led to a phase 3 biotech.”
The announcement comes just days after co-founder George Goldsmith, who left the board in March, sold 776,565 ordinary shares in a private transaction with former co-founder Lars Wilde, according to Investing.com. The sale, executed Oct. 24, was part of a call option agreement established in 2020 that allowed Wilde to purchase the shares at a nominal value. An additional 776,565 shares were sold indirectly through Goldsmith’s spouse, Dr. Ekaterina Malievskaia, according to the report.
Goldsmith’s share sale to Wilde was part of a previously arranged call option agreement, though he still retains over 3 million shares. In September, the company appointed Gino Santini as board chairman, following Lori Englebert’s addition as chief commercial officer in July.
The company said in filings that it faces competition from Cybin Inc. (NYSE: CYBN) and even the Usona Institute, a nonprofit that launched its own Phase 3 psilocybin trial for major depression in March 2024. Compass is also exploring potential applications for post-traumatic stress disorder and anorexia nervosa, though the restructuring will see non-COMP360 preclinical efforts halted.
R&D costs jumped to $32.9 million in the third quarter from $21.5 million a year ago as clinical trial costs rose. The company posted cash and cash equivalents of $207 million as of Sept. 30, which it expects will fund operations into 2026.
Compass shares fell more than 30% in early market trading Thursday.
