Compass veers off course, delaying phase 3 psychedelic data and laying off 30% of staff

Compass Pathways’ journey to phase 3 psychedelic depression data is taking longer than expected. With the trials overrunning by months, the biotech is laying off 30% of its employees—including some senior managers—and focusing all its efforts on its lead program.

One year ago, the company expected to have data from the first phase 3 trial of its COMP360 psilocybin therapy in treatment-resistant depression by the summer of 2024. That target got pushed back to the fourth quarter early this year. At that time, top-line data from a second trial were due around the middle of 2025. Compass reset both timelines as part of its third-quarter update on Thursday.

Now, the biotech expects to publish data from the first trial, COMP005, in the second quarter of 2025. On an earnings call Thursday, Compass CEO Kabir Nath said “there have been a number of items related to the complexity of the trials that we're now learning along the way.” Compass based its first timeline on a phase 2b trial, plus aspects specific to the phase 3, but underestimated the pivotal study’s duration.

The biotech has found the use of multiple doses in the phase 3 trial “significantly increases the logistical complexity for sites to schedule patients and therapists as well as for patients themselves,” Nath said. The complexities “have resulted in inexperienced sites carefully managing patient flow as they become more proficient,” the CEO said.

Compass has pushed back the readout from the second study, COMP006, until the second half of 2026. Nath framed that delay in the context of the FDA’s rejection of Lykos Therapeutics’ MDMA therapy. Some of the reasons for the rejection were specific to Lykos, but Nath also noted “a high degree of scrutiny regarding unblinding, which is very relevant to our studies.”

COMP006 has three active arms. Nath said “it will be difficult for the overwhelmingly psychedelic-naive participants to determine which dose they received.” The CEO believes that “is an effective strategy to maintain blinding” but wants to ensure the strategy remains effective throughout the blinded portion of the trial. 

“We therefore made the very difficult decision to further protect the blinding of the COMP006 trial and only release data after the 26-week time point has been reached for all patients,” Nath said. “While recruitment for COMP006 has been going well so far at the sites that are up and running, we're still working through some site initiations in Europe, some of which have taken longer than projected.”

The delays have prompted a reorganization. Compass ended last year with 186 employees, 141 of whom worked in R&D. The biotech is laying off 30% of its staff, including by eliminating some senior management positions. The resulting, slimmed-down organization will focus on getting the COMP360 program over the line.

Compass is stopping all preclinical work unrelated to COMP360. The biotech is also “exploring a potential externalization” for its digital health tools. Compass has worked on digital tools for training therapists, preparing patients for therapy and helping people integrate psychedelic experiences after treatment.

The changes are intended to focus resources on COMP360. Compass ended September with $207 million and, having made the cuts, expects the money to support operations at least into 2026. The biotech said its runway would last into 2026 when it provided its second-quarter update in August.

Compass’ share price fell 16% to $5.19 in premarket trading.