COMPASS Pathways plc (CMPS) Earnings Call Transcript

Good day, ladies and gentlemen, and welcome to the COMPASS Pathways Second Quarter 2026 Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Stephen Schultz. You may begin.

Thank you, operator. Welcome all of you, and thank you for joining us today for this conference call. Again, my name is Steve Schultz, Senior Vice President of Investor Relations at COMPASS Pathways. And today, I'm joined by [indiscernible] and Lori Englebert, our Chief Commercial Officer. Teri Loxam, our Chief Financial Officer, will also be available for the Q&A. The call is being recorded and will be available on the COMPASS Pathways Investor Relations website shortly after the conclusion of the call and will be available for a period of 30 days. Before we begin, let me remind everyone that during the call today, we will be making statements about our future plans and prospects that constitute forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. Including those risks and uncertainties described under the heading Risk Factors in our most recent filings with the U.S. Securities and Exchange Commission. These forward-looking statements represent our views only as of today. and we specifically disclaim any obligation to update or revise any forward-looking statements, even if our estimates or assumptions change. I'll now hand the call to Kabir Nath.

Thank you, Steve, and thanks all for joining us today. The first half of this year has been an exciting time for COMPASS. Now that we have highly statistically significant positive Phase III primary endpoint readout as well as demonstrated durability through 6 months from both our trials. We believe we have largely derisked the clinical and regulatory profile of COMP360. In addition to confirming its rapid onset and durability, the totality of different the program so far shows it has a generally well tolerated and safe profile. Taken together, these data reinforce our belief the COMP360 has the potential to fundamentally change our mental health [indiscernible]. With these data sets in hand, we continue to make significant progress towards our NDA filing for the treatment of TRD. Our rolling submission and review process allows us to submit data in waves to the FDA, and they have started to review some modules that we've already submitted. We continue to expect to complete the NDA filing in the fourth quarter. With the potential for an accelerated approval following our final submission, we are advancing our commercial readiness. We built a fantastic commercial team with incredible experience and we're executing on all fronts to be prepared to get COMP360 for millions of patients living with TRD who urgently need new treatment options. We're also well positioned with our strong balance sheet with $433 million of cash on hand as of June 30, which carries us well through launch and into 2028. Let me now hand the call to Lori to talk through in more detail how we're preparing to transform treatment options for these patients.

Thanks, Kabir. Hi, everyone. Thank you for joining. As Kabir outlined, we have achieved significant milestones in the first half of the year. Notably, advanced important commercial readiness initiatives across organizational capabilities, strategic collaboration, healthy and payer engagement and distribution, all significant steps towards being launch ready. Earlier this year, we rounded out hiring of the commercial leadership team, attracting highly experienced energized leaders who immediately to build out the functions. My direct reports, come from companies like J&J, Gilead, [ Okko ] and Axon, and between them have led over 70 product launches. The prospect of launching the first psychedelic in history with a medicine that has the potential to fundamentally change the way mental health is treated is a very powerful attractor of talent. And we are bringing in outstanding professionals from across the pharma industry. I am incredibly proud of the team we are building at COMPASS. In the first half of this year, we also announced additional strategic collaborations with Radial and Osmind, taking the total to 8, each with their own distinct capabilities. These collaborations played a critical role in helping to inform our priority focus at launch of ensuring optimal and patient experience. With the final submission of our NDA expected in the fourth quarter, our focus in the second half of this year is on operationalizing launch plans and ensuring launch readiness. This includes advancing everything from training, education, access and reimbursement, and patient support mechanism. Importantly, we have also already initiated recruiting for the sales force. Our time line for launch remain fluid given the national priority review voucher and executive order in April and the need for DEA, federal DEA and state rescheduling. We remain focused on being ready to launch which we anticipate being in the first half of 2027. At launch, we will leverage the well-established existing interventional psychiatry treatment center infrastructure. These treatment sites are specifically designed to support in-office treatments for products that require multi-hour monitors such as Spravato, TMS and ECT. The established infrastructure has existing capacity and importantly, is already equipped with the staff and operational know-how needed to support additional multi-hour treatments like COMP360. Seven years ago, when Spravato launched, this infrastructure did not exist. Today, there are more than 8,000 established sites across the U.S., and this continues to grow rapidly. COMP360 is poised to lead a profound shift in mental health care, moving beyond daily or frequent dosing toward an option potentially evolving just a few treatments a year, which could be life-changing for patients. Across 2 highly statistically significant and positive Phase III trials, COMP360 demonstrated, extremely rapid onset of action, with deep and clinically meaningful reduction in depressive symptoms as quickly as 1 day, unprecedented durability sustained through at least 6 months and notably, reproducibility of effect in a chronic treatment resistant patient population, one of the most difficult psychiatric conditions in which [indiscernible]. The data are strong, and both patients and prescribers are excited about the potential for a new treatment option. In recent prescriber focused market research, approximately 90% of interventional psychiatrist stated that they would prescribe Comp within the first year being available. In my experience, this is the highest willingness to prescribe percentage I have ever seen in prelaunch market research. With the COMP360 emerging profile and continued interest and excitement around the class, we are eager to bring a new treatment option to the 4 million patients living with TRD today who have limited treatment options. And we are confident in the blockbuster opportunity. COMP360 has the potential to fundamentally change the way that patients living with depression are care for and COMPASS is committed to helping as many patients as possible. We are making significant progress towards being launch ready, and I look forward to discussing more with you throughout the rest of this very exciting year. Thank you, and let me hand the call back to Kabir.

Thank you, Lori. Our progress in the first half of the year has meaningfully derisked the path towards potential approval and launch and reinforces our confidence in the strength, consistency and robustness of the COMP360 data package that we are submitting to the FDA. With the regulatory process underway, our focus is on disciplined execution, completing our filing activities and preparing for a first pass approval and ensuring we are poised to deliver COMP360 to patients with TRD as quickly as possible following approval. And as you just heard from Lori, we will be ready. With that, let me pass the call to the operator for Q&A. Thank you.

[Operator Instructions] Your first question is from the line of Paul Matteis with Stifel.

Specifically, I was wondering if the team could offer some perspective on the recently issued FDA guidelines around psychedelics. And more specifically, how did you interpret the discussion of those guidelines as it relates to 12-month blinded [ durability ]. What do you think that really means or what the FDA is asking for? And how do we think about that in the context of the COMP360 program?

Thanks, Paul. I'm just checking, you can hear me clearly, yes.

Yes.

All right. Thanks. Yes. So look, I think as you're aware, this is a finalization of a set of draft guidelines. And the original draft impact came out even after we had fully designed our Phase III aligned with the agency on that and so on. So our perspective is we have had very robust continuing dialogue with the agency throughout this program. And while the guidance is certainly interesting and we do have those on the 12 months blinded and that would seem like a pretty tall order in any psychiatry drug. We actually don't think it's going to impact the process of our regulatory approval at this stage. I think the other parts of that, that I draw your attention to is the design of Phase III studies in a complementary pair continues to be effectively exactly in line with the design of our studies. So while I think the guidance is interesting, and obviously, in terms of future endeavors, we will be carefully looking at that. We honestly do not think that these guidelines are going to impact the regulatory process that's already underway for us.

Your next question is from the line of François Brisebois with LifeSci Capital.

I was just wondering, in terms of launch, can you help us understand this always happens, but especially in your situation, just the reimbursement challenges, what are we going to have to go through just to get a better feel for the cadence here with the launch expected next year?

Francois, as you mentioned, launches are traditionally hard coming out of the gate with the reimbursement just because you need time. What we are doing now is our market [indiscernible] team is already engaging with payers, and they have been now for some time. We're getting very positive feedback from the payers, especially in this TRD patient population, where proving efficacy has almost been impossible to do in the past. So it is playing very well with a key stakeholder who really truly understands the economic burden that patients with TRD can have on a payer system. So at launch, what we expect is we are intending to have a field reimbursement team fully deployed at the time of launch. Who will be out helping these sites ensure that they can code and get the reimbursement that they need to code for and make sure that they're well educated in the process. In terms of the drug reimbursement and the conversations we're having with payers right now, we are working through that. We are still ingesting the data that we just got and released a couple of weeks ago into the value proposition that COMP360 can bring, and then we'll make decisions as we get closer to launch on what that might look like in terms of rebating and paying negotiations for formulary access.

Your next question is from the line of Gavin Clark-Gartner with Evercore.

Maybe you could just characterize how any ongoing regulatory discussions are progressing? And separately, what are your expectations for DEA scheduling timelines at this point?

Thanks, Gavin. So on the first part, I would just say they're going well. I mean the rolling submission is underway. As I noted in the remarks, some of what has been sent is under review. We're getting questions on it. Clearly, given the acceleration, given the NPV, the onus is also on us to respond very quickly, and we're doing that. So the team is doing an amazing job of being responsive to that. So nothing out of the ordinary that I would say we remain on track. And as you know, one kind of in the later stages that things like label and REMS really come into play. Those are typically negotiated fairly late in the day. So nothing -- really nothing untoward to report except we're very happy with progress. On rescheduling. I'll hand to Lori.

Yes. Gavin, we are accelerating our 8-factor analysis getting that to the CSS, FDA division of controlled substance as quickly as possible. And in hopes of that enabling a faster FDA and DEA coordination along the way. We're also heavily engaging with the DEA or attempting to engage with the DEA to help see if we can get any further clarity on what that looks like. As I've mentioned in the past, the DEA is pretty consistent in hitting their 90 days, so we feel very confident that they will reschedule within the 90 days, but it's still a little bit fluid in terms of when that actually will happen. But given the exit order in April, we are confident in the ability to potentially pull that forward.

Your next question is from the line of Ritu Baral with Cowen. Please go ahead.

Another question for you, Lori. Specifically around the term training that you used in the prepared remarks, it sounds like in response to some of the prior questions, some of that training for the interventional psychiatry sites will revolve around coding. But I wanted to ask what other aspects of training does the team plan on offering interventional psychiatry sites. Especially given that you have a good -- a very solid precedent REMS to sort of train against and anticipate. How do you anticipate offering sort of readiness services to those sites? And how does that impact, I think, how all of us may model 2027 rollout. We've -- here at TD Cowen, we've had experience with sponsors really wanting to manage the early experience with the drug at [indiscernible] with clinicians on early rollout. So anything you can tell us about sort of the general shape of 2027 as you see it now with the training offered.

Yes. Ritu, thanks for the question. I'm going to try and collect it all into one cohesive [indiscernible]. So the way I think about training -- you're brilliant at this. I -- we think about training in 2 parts. So there's going to be training are going to be education. So I will address both, but in terms of training, it's typically training. We announced a little while ago that we are participating in grants for third-party companies to help with the training of the site. Both on psychedelics and as soon as COMPASS gets the final label on anything that's required for the monitoring time that the patient will be in the room. We want to make sure that, that patient experience is a very good one. And so we will -- we're still doing that. So the sites will need to be trained because in the REMS, they will need to attest to being trained and part of that will be based on the training that these third-party providers are enabling. Already, there are well over 1,000 people who are already trained on the psychedelic portion of that training. And so there is a broad group of people already ready to go with that training. The other training, again, the COMP360 piece of that particular training on how to best support the patient and helps enable a very good patient experience that will come after we see the final label and we get that finalized. We are also -- we'll need to do training on REMS to make sure that they are compliant with REMS certification and all the things that they need to do with REMS. So in terms of rollout, in some cases, the fact that there will likely be a little bit of time between when we get approval and when the DEA will reschedule and then the states will reschedule, Obviously, we're trying to do this as fast as possible. We are going to leverage that time to the best of our ability. And so we will have teams out immediately upon approval, helping these sites to make sure they know the requirements that will be under the REMS. And as we learn a little bit more and get closer, we'll be able to start communicating what we expect in terms of site readiness. This will be obviously a key KPI that we will want to communicate on. And then obviously, when it comes time to prescribing as we are thinking through this, obviously, and you mentioned before, which you've listened to me in the past and the importance of making sure that the sites and the patients have a very good experience. We are very acutely aware that we are leading the way here, and it is important for us to maintain that leadership. And so the other piece that I do want to quickly touch on is there were all limations. This is our field force, educating the prescribers, the referring physicians. This is our medical science liaison who are have been out in the field for 2.5 years now continuing to educate there. And we're going to continue to do additional support things like our education and enabling that in an outsized way just to make sure that we are covering all the bases and everyone is very much aware of the potential of COMP360.

Your next question is from the line of Andrew Tsai with Jefferies.

Thanks for the update. So I think you guys are in a very unique position be the leader in the psychedelic space. So to maintain that leadership over the next year, what is your appetite like to do even more studies with COMP360 outside of PTSD and so forth? And any new indications or other new psychedelics we can hear about? Or is the expectation for us to be focused on the launch itself.

For the question, Andrew. So yes, the expectation should be to be focused on the launch of lease for now. Clearly, as a new company with our first asset, we have a team that's incredibly working incredibly hard on the submission. But more than that, as I said in the prepared remarks, on a first pass approval because submitting is something that this needs to be a really robust dossier. We are the leaders, you can imagine from a quality perspective, from inspections and so on. All of this is brand new to the agency. So we really are very, very focused on not only a real robust submission, but also doing our best to get that first part approval. You've heard a lot from Lori and we'll continue to hear a lot more out the preparations and so on on that side. the PTSD study is now underway. I think the way we think about this is, as we move through what we hope is an expected approval and launch, absolutely, we will continue to look of other opportunities for COMP360. There are clearly some very interesting areas. There is a lot of interest, obviously, in substance use disorder with AUD in particular, at the forefront at given the size of that as a public health issue. And potentially more broadly, what other assets that may be out there as well. But in the short term, you should take us to be very, very focused on this submission approval and launch process for TRD.

And Andrew, if you don't mind on mind, I'll just add a couple of things there to help add a little more color. So consistent with what Kabir has mentioned, we have and supply study drug to an enormous amount of IIS studies. And so we will be looking through those to understand where the potentials may lie if that becomes an option for us with COMP360. And at the same time, we're also going to be collecting a lot of real-world evidence to really understand more about patient populations that may be responding to COMP360. We will be attacking this on all fronts in terms of understanding what would be the next viable indication.

And just -- sorry, I should have said that, Lori, to build on that. We had taken a pause for a couple of years on our IIS. As we said, we have supplied a lot of drug for a number of indications. We are now ramping that up again. So we actually have a number of IIS starting in areas such as OCD, which I think is potentially very interesting area. So that now as we're getting closer to the regulatory finish line for TRD, we're actually restarting our IIS programs.

Your next question is from the line of Madison El-Saadi with B. Riley.

Maybe I'll ask on REMS certification. If you can just kind of help us understand that process if this is something that's molecule-specific. And can sites proactively progress that process before DEA rescheduling takes place? Or is that something that happened sequentially? And then secondly, if I may. Are you continuing to collect safety data or safety follow-up data? Or has the full safety data package been submitted?