Cara Community Biotechs: Compass Pathways

Compass Pathways (NASDAQ: CMPS) reviewed 10-15-2020

Market Cap: $1.45 Billion (USD)                 Share Price: $37.96 (USD)

Shares outstanding: 38.32 M   Float is just 7.5 M shares

Cash & cash equivalents: $1.76 (USD) /share

Debt: large convertible notes that reportedly considerably diluted the pre-IPO shares

Operations: 3 months ended Mar 2020 reported a net loss of $8.59 M vs $2.70 M in the prior-year quarter

Insiders: N/A                      Institutional: N/A

Website: https://compasspathways.com

Investor presentation:  https://ir.compasspathways.com/news-events/presentations

Initial SEC filing: https://ir.compasspathways.com/static-files/57526fa8-b34d-4ee1-bc36-775c24bfa86b

Chairman, Co-founder & CEO: George Goldsmith               HQs: London, UK

Compass Pathways Plc went public on 18 Sept 2020 with an IPO price of $23.00 (USD) with a high of $47.29

This new and small company (50 employees) uses a synthetic version of psilocybin to develop therapies focused on mental health issues such as obsessive-compulsive disorder, depression, anxiety, and possibly helping people emotionally cope with death

Psilocybin and psilocin are hallucinogenic chemicals found in ‘magic mushrooms’ in their natural form. Although consumed for thousands of years by humans seeking to achieve an altered state of consciousness, these are controlled substances under the law and prohibited unless authorized for research or clinical trial use

COMP360 is the psychoactive agent under development, used in conjunction with psychologic therapy as part of a holistic approach to the treatment of mental disorders

COMP360 is part of an ongoing Phase 2 study expected to be complete by May 2021

Bottom Line:

  • Although the company and its product are as yet completely unproven, initial research reports are extremely bullish although superficial. Citron has a $100 price target and Canaccord has $80, which are pure guesses that are now part of the promotional narrative
  • Outstanding management and advisory group and lead investor. Chief Development Officer Trevor Mill has had stints at Biogen, Pfizer, and J&J
  • High risk/reward potential for investors; however, the emphasis is on the upside because of the dangerous increase in mental health problems caused by the COVID pandemic

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