Analysts Probe Compass Pathways About Johnson & Johnson’s Spravato

As psychedelic drug companies race to get ketamine drugs approved by the FDA for drug-resistant depression, Johnson & Johnson (NYSE: JNJ) may have beat them to the punch with Spravato.

Spravato

Spravato, an FDA-approved nasal spray for treatment-resistant depression, lists esketamine, a ketamine derivative, as its active ingredient. The product is also approved to treat depressive symptoms in adults with major depressive disorder with suicidal thoughts or actions.

Spravato received FDA approval for TRD in 2019; ketamine still has not been approved for this purpose.

In the latest earnings conference call for Compass Pathways (Nasdaq: CMPS), several analysts questioned the company about Spravato.

In particular, Elemer Piros, an analyst from EF Hutton, asked CEO Kabir Nath how the treatment regimen for Compass Pathways’ COMP360 compares with Johnson & Johnson’s product, “especially considering that a patient would have to spend eight times two hours in a clinic in the first month to receive that treatment.”

Nath answered: “We would expect a much less frequent administration for COMP360 than you need to see for esketamine. We believe that that will also translate into a lower burden not only for patients critically but also for providers and treatment centers as well.”

COMP360 is a psilocybin drug, not a ketamine-based drug.

Big Money

Piros also pointed out that J&J said it had worldwide sales of $374 million for the drug; analysts at GlobalData previously forecast that Spravato will generate global sales of approximately $383 million by 2029.

“I think the fact that you saw over $100 million of sales in the U.S. in the first quarter with a strong growth trajectory is very encouraging for us in a couple of different ways,” Nath said. “It shows, first, that despite some initial skepticism about the efficacy and clinical trials, physicians have become very used to working with esketamine and are actually seeing real-world evidence of efficacy.”

Janssen is a German pharmaceutical company owned by J&J that makes Spravato.

“We would expect much of that infrastructure to be relevant to us at Compass for psilocybin as well,” Nath continued. “So, overall, I think we take strong encouragement from that and the fact that they’ve identified that as a growth driver.”

Codes

Franc Brisebois, an analyst with Oppenheimer and Co., asked what insurance code Spravato used.

“The first thing I will say is since these codes are only going to be published in July, we’re actually not going to talk in very much detail about what we expect to see in them or what they will actually cover until after that because the AMA would not like us to do so,” Nath answered. “I think, you know, what I would focus on is, is what we have done here, which is acknowledging that, for psilocybin specifically, this six to eight-hour administration is a unique model of psychological support for which nothing existed. And, you know, the idea of stringing together multiple codes to do that would clearly be unappealing to providers not necessarily feasible and also would not give any consistency.”

He also noted that J&J was using a variety of different codes, adding that there was post-administration monitoring as opposed to support during administration.

H.C. Wainwright analyst Patrick Trucchio continued the line of questioning asking, “As we look ahead to the potential commercialization of COMP360, I’m wondering if you could frame for us what a potential REMS program it could entail and if — if it would be similar to Spravato.”

REMS is a strategy to manage known or potential risks associated with a drug and is required by the FDA to ensure that the benefits of the drug outweigh its risks. With regard to Spravato, the company’s REMS require that the nasal spray CIII is available only through a restricted distribution program called the Spravato REMS with certified inpatient and outpatient facilities and pharmacies.

Nath said he would expect distribution through specialist pharmacies to treatment centers for a given patient with the indication. But ultimately, he said it was premature to discuss these elements.

While the analysts were clearly interested in comparing Spravato with COMP360, it is really Seelos Therapeutics’ SLS-002 that is a closer comparison. SLS-002 is intranasal racemic ketamine with two investigational new drug applications for the treatment of acute suicidal ideation and behavior in major depressive disorder and in post-traumatic stress disorder.

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