Compass Pathways — Quick Backstory / Key Points Compass Pathways is a clinical-stage biotech company focused on mental health treatments. Its lead program is COMP360, a synthetic psilocybin therapy. The main target indication is treatment-resistant depression. Treatment-resistant depression means patients have not responded adequately to standard antidepressant treatments. COMP360 is not just a pill-only approach. It is being studied with psychological support in a controlled clinical setting. Compass has advanced COMP360 into Phase 3 clinical trials. Phase 3 data is the major upcoming catalyst because it will help determine whether the treatment has a realistic path toward FDA approval. Positive Phase 3 results could make Compass one of the leading companies in the psychedelic medicine space. The opportunity is large because depression is a major market, and treatment-resistant depression remains an area with significant unmet need.
ACCELERATING MEDICAL TREATMENTS FOR SERIOUS MENTAL ILLNESS https://www.whitehouse.gov/presiden...edical-treatments-for-serious-mental-illness/
Why Trump is pushing psychedelics research to treat mental illness https://www.cnbc.com/video/2026/05/...edelics-research-to-treat-mental-illness.html
S.4220 - Veterans Health Administration Novel Therapeutics Preparedness Act https://www.congress.gov/bill/119th-congress/senate-bill/4220/text
Drugs that change your mind are about to hit the market https://www.linkedin.com/pulse/drugs-change-your-mind-hit-market-steven-dickman-v5t3e/ Steven Dickman Owner, CBT Advisors May 28, 2026 Cambridge, MA, May 28, 2026 In just a few months, LSD and psilocybin, the active ingredient in “magic mushrooms,” will approach the market. Biotech companies developing pharmaceutical versions of these substances are expecting Phase 3 trial readouts in the next few months and, soon after that, physicians will likely be prescribing them to patients with conditions such as generalized anxiety disorder (GAD) and major depressive disorder (MDD). In the United States, generalized anxiety disorder affects roughly 3 to 7% of adults in a given year (on the order of 7 to 15 million people).[1] Major depressive disorder affects well over 10% of US adults.[2] Behind those large-market indications are other significant ones like post-traumatic stress disorder (4%)[3] and substance abuse (16%).[4] The efficacy of the psychedelic-based drug candidates in Phase 2 clinical trials has been remarkable, showing full remissions for the LSD-based product DT120 in development by Definium Therapeutics (formerly MindMed) in up to 48 per cent of anxiety disorder patients in the optimal dose arm, even when these patients had previously been plagued with severe anxiety. The developers believe, based on the statistically significant results reported in an investigator-initiated trial conducted in MDD with a similar LSD-like molecule, that comparable outcomes might also be achieved in MDD. There is much that I love about this stunning turn of events: The astonishing success rates the drugs have had in tough-to-treat disorders; the companies overcoming regulatory and logistical challenges to bring them closer to the market; and the delightful unexpectedness of drugs formerly associated with the 1960s counterculture and recreational “trips” becoming a major part of psychiatrists’ arsenals offering the potential to improve health and well-being. I chaired a panel at a recent life sciences conference, Convergence Forum on Cape Cod, where we heard from three leaders in neuropsychiatric drug discovery working with psychedelics and related drug candidates. Drawing from their comments and my own research, here is how I believe this trend will play out to both patients’ and society’s benefit. I suggest that, similar to the seismic effect on society of GLP-1s, widespread legal use of psychedelic therapies will impact many more patients than initially being addressed. Furthermore, all of us, not just patients, may well be directly or indirectly impacted. Why am I so convinced of this? Because the drug candidates are: Mysterious: These drug candidates are both highly efficacious and also somewhat mysterious in their mechanism of action. Once on the market, their use is likely to drive greater understanding of how the brain works. Differentiated: The candidates are different from any drugs on the market. This includes the ketamine derivative Spravato® from Janssen Pharmaceuticals, a nearly $2 billion drug more limited in its utility and its upside than LSD-based or psilocybin-based drugs are likely to be. Likely to be prescribed widely, also off-label: Psychedelics are likely to be prescribed both on-label for anxiety and depression and, eventually, off-label for a wide variety of other ailments. Inspiring to the point of evangelism: Finally, because, once approved and used, they will result in a growing cohort of evangelizing patients talking about their treatment in reverent, even quasi-religious terms Due to all these factors, I believe that the launch of the first few psychedelic therapies will represent a turning point in the history of the industry and perhaps a bigger one for the rest of us. Mystery: A Teachable Moment for Neuroscientists LSD, psilocybin and their psychedelic cousins have been glorified and vilified for decades for their mind-altering powers. But despite the fact that drugs based on these compounds are on the verge of regulatory approval, we still do not know how they work. As panelist Dan Karlin, a practicing psychiatrist and the Chief Medical Officer of Definium Therapeutics, put it, “LSD is an incredibly potent drug. Whether its mechanism is mediated to some extent by the experience, to some extent by downstream signaling and direct drug effects, you don't know the answer to that. We don't really know what's mediating what, and it's not a binary. Nothing in psychiatry, nothing in medicine, is a binary. So at the end of the day, it's not, is it mediated by one or the other? It's which bits of it are mediated by what? But regardless, we do have this really dramatic period of altered consciousness.” Surprising as this might sound, it is not so different in some ways from aspirin, which, like psilocybin and LSD derivatives, is another synthetic version of a natural product that happened to hit the market in 1899. Expect a wave of scientific discoveries based on post-marketing studies, imaging studies and clinical observations. Differentiation: Drugs That Bring Novel Benefits Can Earn Outsized Revenues Primarily because their effect size is so much larger than that of all approved drugs, they are expected to have great commercial success. Panelist Bruce Leuchter, M.D. is CEO of Neurvati Neurosciences, a Blackstone company, and also a practicing psychiatrist. He emphasizes that the drugs modulate the monoamine oxidase enzyme, biology that is understood in terms of other candidates, but that the size of the effect is differentiated. Leuchter said that the members of the first wave of approved psychedelic therapies (assuming positive data and reasonable reimbursement), have potential multibillion-dollar peak sales, with a few variables driving the numbers up or down: How broadly can they be prescribed? Can they treat GAD and MDD alone or can they also expand into other indications like PTSD? How durable will their effect be? Can they be “one and done”? (If so, this would limit their commercial attractiveness.) How scalable is the delivery model? That is, how easily can companies get their products to patients, especially if patients have to be treated under supervision? This could become a key issue. How flexible will the drug label be, e.g. does it allow for only use as a monotherapy or can it also be used in conjunction with other therapies? Will the potentially powerful effects of these drugs limit their use to supervised or on-label settings? Importantly, he cautioned, these revenue projections assume that operational constraints—clinic capacity, trained personnel, and payer logistics—are at least partially solved. If a drug company can truly scale its psychedelic sales, he said, there is upside beyond that range. The most “fragile” variables, Leuchter added, are not science or efficacy – those risks are lower now – but rather the delivery risk and the economic risk, which he believes remain underappreciated. Likely to be Widely Prescribed, Potentially Also Off-Label Once safety is established in a commercial setting, an admittedly non-trivial hurdle, there are few limits on the indications in which psychedelics, once approved and commercially available, might get tried. For example, cancer: In Michael Pollan’s groundbreaking 2018 book How to Change Your Mind, the psychedelics pioneer Roland Griffiths of Johns Hopkins University cited a study that "found one of the largest treatment effects ever demonstrated for a psychiatric intervention." It reported that the majority of volunteers - all of them cancer patients - who had a mystical experience e.g. induced by psilocybin "reported that their fear of death had either greatly diminished or completely disappeared." [5] This is just one admittedly dramatic example of how approved psilocybin-based and LSD-based drugs might find their way to more patients. Evangelism: Landing on Fertile Ground I believe that news of effective psychedelics starting to be used in the initial indications will trigger news coverage and anecdotal reports and hence much wider interest. The initial indications targeted by Definium, generalized anxiety disorder, and by Compass Pathways, treatment-resistant depression, are just the beginning. The ground has been prepared for strong uptake for these drugs based on the decline in the only truly effective alternative for most patients, months or years of talk therapy. While talk therapy is demonstrably effective, it is neither readily reimbursed nor affordable out-of-pocket for most patients. As Karlin put it, “Because of mechanisms of payment, in essence, psychiatry, when it is insurance-supported, has been reduced to only being able to make money through short medical management visits.” Consequently, the need for effective interventions is greater than ever. Definium and other companies have designed their clinical studies accordingly, so that patients are not required to see a psychotherapist for talk therapy in order to be eligible. Indeed, the need for supervised dosing of these drugs, which will be mandated at least initially and perhaps permanently given their powerful effects, can be met by an infrastructure that has already sprung up in response to the approval of Spravato, a ketamine derivative dosed as a nasal spray and prescribed for depression. Spravato, which is considered “dissociative” rather than psychedelic in nature, is generating projected annual revenues of $1.7 billion as of mid-2025.[6] The ketamine clinics that sprang up to deliver Spravato are a perfect example of what may happen when LSD- and psilocybin-based drugs are approved. When Janssen Pharmaceuticals, a division of Johnson & Johnson, launched Spravato in 2019, Karlin said, “They were aiming at delivering it in emergency rooms and inpatient units. They hadn't even contemplated a world where this could be an outpatient treatment, yet that world came into being because of the existence of the drug.” Leuchter concurred that there is a vast opportunity for these therapeutics: “Irrespective of regulatory dynamics, irrespective of commercial dynamics, there's a space for anything that can generate this kind of effect size. And it's so obvious when you see it, which is also so atypical for neuroscience. So there are so many things about this space that sort of defy gravity.” Taking the fun out of the fungi: psychedelics without the trips As to the future of psychedelics, besides robust uptake of the drugs in this category, there is likely to be an actual broadening of the category itself to encompass drugs that, as panelist Mark Rus put it, “take the fun out of the fungi.” Rus is CEO of Delix Therapeutics, which is working on a category of drugs that is intended to deliver LSD-like or psilocybin-like efficacy but not to trigger a psychedelic or dissociative experience. Delix has generated Phase 1b clinical trial data showing equivalent depression score drops for their lead candidate zalsupindole as compared to hallucinogenic first-generation drug candidates targeting the same receptor. Both Leuchter and Karlin warmly welcomed the development of these so-called “neuroplastogens,” which would conceivably both address lingering concerns about undesired effects of psychedelics and also broaden still further the range of indications that could be addressed with the drugs. Delix was recently granted the go-ahead from FDA to have patients take their pills home during early clinical trials and to take them without in-person medical supervision. Pollan’s book drew from his prodigious research on a number of psychedelics, including LSD and psilocybin as well as some related drugs, each of which he dutifully consumed in order to properly research their effects and to anticipate how they would affect others. The book, while based in large part on his own experience, was nonetheless as thorough and sensitive a study as I have seen on the way these drugs work and how it feels to take them. Once these powerful new medicines are approved, we will, I believe, move from individuals “changing their minds” to society itself changing for the better, with an accompanying boost in mental health, in fresh thinking and in new insights into how the mind itself works. NOTE: I invest broadly in the stocks of biotech companies including some of the ones mentioned in this piece. [1] The prevalence and burden of generalized anxiety disorder in the United States healthcare system: Real-world prevalence and incidence from 2020 to 2023 - ScienceDirect [2] National Health Statistics Reports, Number 213, November 4, 2024 [3] Important Facts and Statistics About PTSD (Post-Traumatic Stress Disorder) [4] Alcohol and Drug Abuse Statistics (Facts About Addiction) [5] Psilocybin produces substantial and sustained decreases in depression and anxiety in patients with life-threatening cancer: A randomized double-blind trial - PubMed [6] Spravato Sales Surge: J&J's Ketamine Nasal Spray Nears Blockbuster
