A biotech startup headquartered in London, COMPASS Pathway, which works in the mental health treatment sector, has picked up a whopping $285 million in a private funding round.
The transaction is segmented into two tranches. Firstly, it is a series of over 16 million American Depositary Shares (ADS) issued at a price of $7.73 per share, which accounts for over $125 million. The company is granting the right to purchase an additional ADS at a 30% premium, which accounts for $9.93 per share, accounting for nearly $159 million. Those who hold the first tranche of ADS will have the right to purchase additional shares for three years.
The transaction is conducted by a consortium of healthcare specialist investors and the total proceeds of the sale could extend COMPASS Pathway’s runway well into 2025.
Propel transformative mental health treatment
While TCGX and Aisling Capital lead the purchase, it also saw 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.
COMPASS Pathways says it will use the funds to support its phase 3 clinical programme for treatment-resistant depression. Also, it will focus on commercial planning, phase 2 trials, digital technology development, and research. The funds will cover the expenses until late 2025.
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.”
Psilocybin therapy
Founded in 2016 by George Goldsmith, Lars Wilde, and Ekaterina Malievskaia in London, COMPASS Pathways focuses on improving the lives of those who are suffering from mental health challenges and who are not helped by current treatments. It pioneers the development of a new model of psilocybin therapy, in which its proprietary formulation of synthetic psilocybin, COMP360, is administered in conjunction with psychological support.
Psilocybin is the psychoactive substance found in select mushrooms known as ‘magic mushrooms’. It is proven to provide a safe and effective medicine for patients with depression, anxiety, addiction and other mental illnesses. However, it has to be administered with psychological support from specially-trained therapists.
COMPASS Pathway’s COMP360 offers a synthesised formulation of psilocybin. The company is working to further the research and application of psilocybin therapy.
