Compass raises $80M to take magic mushroom drug toward phase 3

magic mushroom
Psilocybe semilanceata, a type of magic mushroom (Arp/CC BY-SA 3.0)

Compass Pathways has raised $80 million to prepare its psilocybin therapy for phase 3 development. The London-based biotech is advancing the drug, the active ingredient in magic mushrooms, for use in people with treatment-resistant depression.

Psilocybin was studied in the 1960s, but research ground to a halt over the following decades. Teams at academic centers including the University of California, Los Angeles, New York University, Johns Hopkins University, Imperial College London and the University of Zurich helped resurrect interest in psilocybin in recent years, overcoming constraints on the study of the molecule to generate evidence of its effectiveness in hard-to-treat patients.

Compass has picked up the baton from those researchers, raising a £25 million ($31 million) series A and generating data from healthy volunteers on the safety of psilocybin therapy. With the end of a phase 2b on the horizon, Compass has raised money for the next chapter in its story.

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The series B will enable Compass to run several trials that will inform the design of the phase 3, such as a long-term follow-up to the phase 2b. Through the studies, Compass aims to understand details such as how psilocybin interacts with selective serotonin reuptake inhibitors and other depression drugs, thereby gaining a clearer picture of the role the therapy could play in its core indication.

As a Schedule I drug, psilocybin is subject to restrictions. However, having worked through logistical issues such as shipping the drug to sites in the phase 2b, Compass co-founder Lars Wilde doesn’t expect the move into phase 3 to pose particular difficulties. Compass will use the resources and knowledge built up for the phase 2b to ease the transition into the larger study. 

“We actually have over 20 sites that all recruit very well. We're well positioned to recycle those sites for our phase 3 program. The only other challenge is to train therapists in the treatment modality. That has gone very well to date. We have trained over 70 therapists. That shouldn't be a hurdle to scaling up the trials,” Wilde, president and chief business officer of Compass, said.

The series B will support work to improve the therapist training program. Therapists already undergo a digital training program before participating in “intense, in-person training,” Wilde said. The money will enable Compass to improve its training program ahead of the phase 3. 

Patients undergo a digital preparation program, too. Compass also plans to add a digital tool to help patients “integrate the experience,” Wilde said, reflecting the role self-generated, post-treatment ideas and insights play in psilocybin therapy and the potential for technology to help scale the approach.

Compass’ preparations for phase 3 are continuing around COVID-19 and associated lockdowns, but the pandemic has affected the phase 2b. With many of Compass’ partners stopping some activities, the biotech halted enrollment in the study last month. 

“It's a bit unfortunate because the study was going extremely well in terms of recruitment, but the good thing is we have an amazing backlog of patients waiting to be enrolled into the study who have been prescreened already. As soon as the world opens up again, we'll be ready to go and resume the activities in the 2b program,” Wilde said. Compass had aimed to finish the trial by the end of 2020. 

Compass is advancing the clinical program while also working on earlier-stage projects. The biotech initially focused on psilocybin therapy in the belief it could leverage existing knowledge of the drug to quickly get a new product to patients with treatment-resistant depression. 

That has made Compass almost synonymous with psilocybin therapy. Yet, Wilde sees the company as “relatively treatment agnostic,” a position that could become more apparent to people outside the biotech as details of the fruits of its earlier-stage work become public.

"While psilocybin is a great starting point … we think that based on the learnings that we have generated in our preclinical and mechanistic work we will be able to develop even better medications,” Wilde said.

Compass has partnered with academic centers, primarily in the U.S., to form a virtual drug discovery center focused on finding and advancing such medications. The biotech’s London-based preclinical team, part of a 50-person company based across the U.K. and U.S., is coordinating the drug discovery work. Compass will use some of the series B funds to grow its headcount.    

Existing investor ATAI Life Sciences was joined by new backers including the McQuade Center for Strategic Research and Development, Founders Fund, Able Partners, Camden Partners Nexus, Perceptive Advisors, Skyviews Life Science and Soleus Capital in the series B.

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