COMPASS Pathways’ COMP360 Shows Promise in Mental Health: A Buy Rating Amid Positive Trial Outcomes and Strategic R&D Leadership

Analyst Sumant Kulkarni from Canaccord Genuity maintained a Buy rating on COMPASS Pathways (CMPS – Research Report) and keeping the price target at $50.00.

Sumant Kulkarni’s rating is based on the promising potential of COMPASS Pathways’ psilocybin therapy, COMP360, for treating mental health conditions. The recent Phase 2 trial results for post-traumatic stress disorder (PTSD) were viewed positively, despite being open-label and involving a small sample size. Kulkarni emphasizes the significance of the upcoming Phase 3 data in treatment-resistant depression (TRD), slated for the fourth quarter of 2024, which is a major focal point for investors. Kulkarni’s continued endorsement of COMPASS Pathways as a Buy is anchored in the solid foundation laid by earlier Phase 2b results for the same therapy in TRD.

Additionally, the appointment of Michael Gold as Head of R&D is seen as a strategic enhancement, potentially benefitting the company’s long-term research and development trajectory. While no major changes were made to the financial model post-first quarter 2024 results, the price target remains unchanged at $50, with a robust projected peak sales figure and a maintained probability of approval. Kulkarni’s analysis excludes specific contributions from other indications or the potential of retreatment, but the overall assessment is rooted in a solid financial forecast and the therapeutic promise of COMP360.

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COMPASS Pathways (CMPS) Company Description:

Compass Pathways PLC is a mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health. The company is motivated by the need to find better ways to help and empower people suffering with mental health challenges who are not helped by existing therapies, and are pioneering the development of a new model of psilocybin therapy, in which psilocybin is administered in conjunction with psychological support. Its focus is on treatment-resistant depression, or TRD, a subset of depressive disorder, or MDD, comprising patients who are inadequately served by the treatment paradigm. It has developed a proprietary, high-purity polymorphic crystalline formulation of psilocybin, COMP360.