Connect with us


COMPASS Pathways Announces Capital Raise of Up to $285 Million

COMPASS Pathways has announced a capital raise of up to $285 million, the largest cash injection the industry has seen in quite some time.
The post COMPASS…



COMPASS Pathways has announced a capital raise of up to $285 million, the largest cash injection the industry has seen in quite some time.

The psychedelic medicine space is moving into its next phase, with smaller companies running out of funds and larger firms preparing for the higher costs of advanced Phase 2 and 3 trials. With the market’s extended downturn, these cash realities are even more pressing and one’s ability to raise capital becomes an even larger factor for success.

With today’s news, Compass is showing it means business. The firm’s 2-pronged Phase 3 trial has started enrollment and this capital raise will help ensure the necessary runway to get COMP360 results in front of the FDA.

The deal is dilutive, with shares being issued to a group of healthcare investors, totaling $125 million upfront with up to an additional $160 million tied to the exercise of warrants over the next few years.

The company’s last financial statements showed a cash position of 117.1 million — so the $125 million now brings Compass to just about tied with atai Life Sciences for the top funded company in the space (atai reported $250 million in cash last financials)

See the full press release below.



COMPASS Pathways Announces Up to $285 Million Private Placement Financing Joined by Leading Healthcare Investors

  • Transaction led by healthcare specialist investors, TCGX and Aisling Capital
  • $125 million financing upfront with up to an additional $160 million tied to exercise of warrants
  • Net proceeds from financing expected to extend cash runway into late 2025

COMPASS Pathways plc (Nasdaq: CMPS), a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health, today announced that it has entered into a securities purchase agreement with a select group of healthcare specialist investors for the private placement of (i) 16,076,750 American Depositary Shares (“ADSs”) representing 16,076,750  ordinary shares, and (ii) warrants to purchase up to 16,076,750 ADSs (representing 16,076,750  ordinary shares) (the “Warrants”) at a purchase price of approximately $7.78 per ADS and accompanying Warrant to purchase one ADS. Each Warrant will have an exercise price of $9.93 per ADS, representing a 30% premium to the last sale price. The financing is expected to close on August 18, 2023, subject to customary closing conditions.

The transaction is being led by TCGX and Aisling Capital with participation from new and existing institutional investors, including Vivo Capital, RA Capital, Surveyor Capital (a Citadel company), Paradigm BioCapital Advisors LP, Soleus Capital, Armistice Capital, Logos Capital, PFM Health Sciences and Laurion Capital Management, among others.

Kabir Nath, Chief Executive Officer of COMPASS Pathways, said, “We are grateful for the support of this group of leading healthcare investors for our work to bring potentially transformative treatment for mental health conditions to patients urgently in need of better options. We thank these investors for their confidence in our rigorous approach to building a strong base of evidence for the potential of COMP360 psilocybin treatment to help people with treatment-resistant depression (TRD), post-traumatic stress disorder and anorexia nervosa. We expect that the net proceeds will allow us to advance our pivotal phase 3 program in TRD and achieve important milestones in the development of COMP360. We view this investment as a validation of the potential of psychedelic medicine and the importance of a rigorous and evidence-based approach.”

COMPASS will receive approximately $125 million in gross proceeds, before deducting placement agent commissions and offering expenses, from the private placement of ADSs and accompanying Warrants, and up to an additional approximately $160 million in gross proceeds if the Warrants are fully exercised for cash. The Warrants will be exercisable at the election of the investors for a three-year period. The private placement is being conducted in accordance with applicable rules of the Nasdaq Stock Market LLC (“Nasdaq”) and was priced to satisfy the “Minimum Price” requirement (as defined in the Nasdaq rules). COMPASS intends to use the net proceeds from the proposed financing to fund its pivotal phase 3 clinical program in treatment-resistant depression, its commercial planning and preparation efforts, its on-going phase 2 trials in anorexia nervosa and post-traumatic stress disorder, its development of digital technologies to complement and augment its therapies and its discovery and preclinical research, as well as for general and administrative expenses, working capital and other general corporate purposes. The aggregate proceeds from this proposed financing, combined with current cash and cash equivalents, are expected to be sufficient to fund the current operating plan into late 2025.

Morgan Stanley and TD Cowen are acting as the placement agents for the private placement.

The securities to be sold in the private placement, including the ADSs underlying the Warrants, have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state or other applicable jurisdiction’s securities laws, and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws. The Company has agreed to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) registering the resale of the ADSs issued in the private placement and the ADSs issuable upon exercise of the Warrants issued in the private placement.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities described herein, nor shall there be any offer, solicitation or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About COMPASS Pathways

COMPASS Pathways plc (Nasdaq: CMPS) is a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health. Our focus is on improving the lives of those who are suffering with mental health challenges and who are not helped by current treatments. We are pioneering the development of a new model of psilocybin therapy, in which our proprietary formulation of synthetic psilocybin, COMP360, is administered in conjunction with psychological support. COMP360 has been designated a Breakthrough Therapy by the U.S. Food and Drug Administration (FDA) and has received Innovative Licensing and Access Pathway (ILAP) designation in the UK for treatment-resistant depression (TRD). We have commenced a phase 3 clinical program of COMP360 psilocybin therapy in TRD, the largest randomized, controlled, double-blind psilocybin therapy clinical program ever conducted. Previously, we completed a phase 2b study with top line data showing a statistically significant (p<0.001) and clinically relevant improvement in depressive symptom severity after three weeks for patients who received a single 25mg dose of COMP360 psilocybin with psychological support. We are also conducting phase 2 clinical studies of COMP360 psilocybin therapy for post-traumatic stress disorder (PTSD) and anorexia nervosa. COMPASS is headquartered in London, UK, with offices in New York and San Francisco in the United States. Our vision is a world of mental wellbeing.

The post COMPASS Pathways Announces Capital Raise of Up to $285 Million appeared first on Microdose.

Read More