COMPASS Pathways Secures $50 Million in Funding

Compass Pathways has strengthened its financial position by securing a term loan agreement with Hercules Capital for up to $50 million.

According to Compass’ recent financial results, the company had a cash position of $117.1 million as of March 31, 2023, with an additional $26.9 million raised through its ATM facility in the second quarter.

This financial boost comes as Compass Pathways continues to roll out its large-scale Phase 3 trial across multiple sites, indicating its proactive approach in preparing for increased expenses.

Currently, Compass has used $30 million of the $50 million loan. The full press release can be found below.

Kabir Nath, Chief Executive Officer of COMPASS Pathways, said, “COMPASS is pleased to partner with Hercules for this non-dilutive financing to support our COMP360 phase 3 program in treatment-resistant depression, with initial data expected in the summer of 2024. Alongside the proceeds from our ATM facility reported in May, this loan facility further strengthens our balance sheet and extends our cash runway. Most importantly, it supports our plans to provide new options to patients suffering from treatment-resistant depression as soon as possible.”

LONDON, July 05, 2023 (GLOBE NEWSWIRE) — COMPASS Pathways plc (Nasdaq: CMPS), a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health, today announced that the Company has entered into a term loan agreement with Hercules Capital, Inc. (NYSE: HTGC) for up to $50 million.

Kabir Nath, COMPASS Pathways Chief Executive Officer said, “COMPASS is pleased to partner with Hercules for this source of non-dilutive financing to support our COMP360 phase 3 program in treatment-resistant depression, with initial data expected in the summer of 2024. Together with proceeds from our ATM facility reported in May, this facility further strengthens our balance sheet and lengthens our cash runway. Most importantly, this supports our plans to deliver new options to patients suffering with treatment-resistant depression as soon as possible.”

Under the terms of the agreement, COMPASS drew an initial $30 million at closing on June 30, 2023. An additional $20 million becomes available in two tranches of up to $10 million each. The first tranche is available no later than (a) 30 days after achieving specific performance milestones or (b) December 15, 2024. The second tranche is available during the interest-only period, subject to lender approval. However, the Company is not obligated to draw funds in the future, even if these tranches become available. Detailed information about the loan agreement can be found in the Securities and Exchange Commission’s Current Report on Form 8-K filed on July 5, 2023.

“Hercules is pleased to enter into a strategic relationship with COMPASS Pathways as it advances its clinical stage programs,” said Bryan Jadot, Senior Managing Director and Life Sciences Group Head at Hercules Capital.

Armentum Partners served as the Company’s exclusive financial advisor for this transaction, while Goodwin Procter and Morrison Foerster provided legal counsel.

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 from mental health challenges and not finding relief from current treatments. We are pioneering the development of a new model of psilocybin therapy, where our proprietary synthetic psilocybin formulation, COMP360, is administered alongside 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 launched a phase 3 clinical program of COMP360 psilocybin therapy in TRD, which is the largest randomized, controlled, double-blind psilocybin therapy clinical program ever conducted. Additionally, we are 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 to promote mental well-being worldwide. www.compasspathways.com.