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On Thursday, H.C. Wainwright analyst Patrick Trucchio revised the price target on Compass Pathways (NASDAQ:CMPS) stock, reducing it to $45.00 from the previous $60.00, while still recommending a Buy rating. According to InvestingPro data, analyst targets for CMPS range from $12 to $60, with the stock currently trading at $4.25, suggesting significant potential upside despite recent volatility. Trucchio’s adjustment follows a comprehensive meeting with company executives on January 27, where they discussed the progress of COMP360, Compass’s oral psilocybin therapy currently in Phase 3 trials for treatment-resistant depression (TRD) and Phase 2 trials for posttraumatic stress disorder (PTSD) and anorexia nervosa.
During the meeting with Compass Pathways’ Chief Medical (TASE:PMCN) Officer Guy Goodwin, CFO Teri Loxam, and Head of Investor Relations Stephen Schultz, the company reaffirmed its timeline for upcoming clinical milestones. Notably, the 6-week results from the COMP005 study are expected in the second quarter of 2025, and the 26-week data from the COMP006 trial is anticipated in the second half of 2026. The discussion also touched on a recent publication in the American Journal of Psychiatry, which outlines COMPASS’ psychological support model for patients.
The January capital raise of $150 million was highlighted as a significant event, extending the company’s cash runway well into 2026. InvestingPro analysis shows the company holds more cash than debt and maintains a healthy current ratio of 8.91, though it’s important to note the company is quickly burning through cash. This financial boost is set to fund the ongoing PTSD program for COMP360 and potentially allow for expansion into additional indications. For deeper insights into CMPS’s financial health and extensive metrics, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. Prior to the capital influx, H.C. Wainwright’s model assumed a 75% probability of success for the PTSD indication and 40% for anorexia nervosa, acknowledging the promising early data in these areas of high patient need.
Compass Pathways’ lead indication, TRD, continues to be seen as a significant commercial opportunity, with an estimated 3 million U.S. adults suffering from this condition after failing at least two prior antidepressant treatments. While the company reported an EBITDA of -$153.87 million in the last twelve months and currently has a market capitalization of $290.79 million, Trucchio remains optimistic about the potential of COMP360 to rapidly and effectively address this challenging patient population, positioning it as a key player in interventional psychiatry, especially for TRD. The revised price target to $45 per share reflects the implications of the recent capital raise on valuation assumptions, while the firm maintains its positive stance on Compass Pathways shares. InvestingPro subscribers can access 8 additional key insights about CMPS’s financial health and market position.
In other recent news, Compass Pathways has seen a significant reduction in its 12-month price target from $30 to $9 per share by Rodman & Renshaw, despite maintaining a Buy rating. This adjustment came in the wake of the company’s announcement of a financing plan, aiming to raise up to $355 million for completing its COMP360 pivotal trials in treatment-resistant depression. Additionally, Compass Pathways’ recapitalization included issuing over 24 million American Depositary Shares and pre-funded warrants for certain institutional investors. These recent developments could potentially double the company’s share count from 68 million to over 140 million shares.
In parallel news, Compass Digital Acquisition Corp. has issued a promissory note of up to $2.5 million to its sponsor, HCG Opportunity (SO:FTCE11B), LLC, to cover working capital expenses. The sponsor has advanced $415,000 under this arrangement and the note carries no interest. It is set to be repaid either upon the completion of the company’s initial business combination or the company’s liquidation. If the note isn’t fully settled before a business combination, the sponsor has an option to convert up to $1.375 million of the outstanding principal into warrants at $1.50 each.
These are recent developments for both Compass Pathways and Compass Digital Acquisition Corp., signifying strategic financial planning and providing a glimpse into the companies’ ongoing efforts to secure necessary capital for their operations.
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