Compass Pathways' Phase 3 Psilocybin Readout Raises Efficacy Questions Despite Meeting Primary Endpoint

In a long-anticipated clinical milestone for the psychedelics space, Compass Pathways reported topline results from a pivotal Phase 3 study of its proprietary psilocybin formulation, COMP360, in treatment-resistant depression (TRD). While the study met its primary endpoint, the magnitude of benefit and lack of detailed secondary outcomes left markets underwhelmed, sending shares tumbling by nearly 50% in early trading.

The U.K.-based biotech enrolled 258 TRD patients, administering a single dose of COMP360 or placebo in a double-blind design, followed by psychological support. At six weeks, the psilocybin arm demonstrated a statistically significant 3.6-point reduction on the MADRS scale relative to placebo, a result Compass positioned as both clinically meaningful and a validation of its development approach.

However, in an environment of growing competition and increasing investor scrutiny, the response was tepid. Analysts and key opinion leaders flagged the relatively modest separation from placebo, particularly in contrast to earlier Phase 2 data showing approximately a 6-point difference, and noted the absence of crucial secondary metrics such as remission and response rates.

RBC Capital Markets analyst Leonid Timashev noted that in the absence of durability data or functional endpoints, a 3.6-point delta on MADRS may not be enough to drive investor confidence or payer differentiation. Futhermore, clinicians in their outreach indicated that a 4-point margin would be a minimum threshold of interest, with 5 points or more seen as indicative of a compelling treatment effect.

This tempered enthusiasm may also reflect expectations shaped by recent competitors. GH Research, for example, reported promising results in an 81-patient trial of inhaled mebufotenin, a psilocybin analogue, showing nearly a 16-point placebo-adjusted reduction on the same scale at day eight. While direct comparisons are fraught due to protocol and timing differences, the contrast points towards a key challenge for Compass: demonstrating that COMP360 offers both efficacy and convenience superior to current alternatives.

GH’s trial employed a titrated dose and evaluated outcomes at an earlier timepoint, which may have limited placebo response and enhanced effect size. These nuances matter, particularly in psychiatric trials where expectation effects are notoriously difficult to control.

From a safety perspective, Compass reported no new signals, with its independent data monitoring committee confirming a consistent safety profile and no clinically meaningful imbalance in suicidality between treatment arms, a critical consideration in TRD populations.

Still, commercial viability remains an open question. Johnson & Johnson’s Spravato (esketamine), an intranasal therapy for TRD approved in 2019, generated over $1 billion in sales last year, largely driven by a broader label and entrenched payer relationships. Compass, by contrast, is navigating an uncharted reimbursement landscape for psychedelic-assisted therapy, with questions remaining around scalability, infrastructure requirements, and healthcare provider training.

Evercore ISI analyst Gavin Clark-Gartner downgraded the stock following the announcement, characterizing the outcome as insufficiently convincing. "With clinical and commercial question marks, the second [Phase 3 study] will remain a ‘show me’ story for investors in an increasingly competitive landscape,” he wrote. Those results, evaluating longer-term outcomes over a 26-week horizon, are expected in the second half of next year. Until then, Compass must contend not only with a skeptical market but with a rapidly evolving field that continues to challenge traditional notions of drug development in mental health.