Compass Pathways, a UK-based depression medicine developer backed by pharmaceutical group Otsuka Pharmaceuticals’ McQuade Center for Strategic Research and Development, went public in an IPO worth more than $127m on Friday.
The company issued 7.5 million American Depositary Shares (ADSs) priced at $17, having initially planned to sell 6.7 million shares within a range of $14 to $16.
The company has listed on the Nasdaq Global Select Market and currently has a market cap of more than $986m. Its shares climbed steadily on the first day of trading and closed at $29.
Founded in 2016, Compass Pathways is working on a treatment that relies on synthetic psilocybin – a proprietary formulation of the psychedelic compound that occurs naturally in magic mushrooms – to treat mental health conditions in conjunction with psychological support.
The company’s lead asset, Comp360, is currently undergoing an international phase 2b trial for treatment-resistant depression.
It has allocated the proceeds to clinical trials and therapist training related to Comp360, as well as R&D efforts into using Comp360 for other indications and furthering the team’s understanding of psilocybin.
The money will also support general business development activities, which may include strategic acquisitions, and working capital.
McQuade Center participated in an $80m series B round in April 2020 that also included biotech company builder Atai Life Sciences, Founders Fund, Able Partners, Camden Partners Nexus, Perceptive Advisors, Skyviews Life Science and Soleus Capital.
Compass had secured approximately $31.5m in a series A round in late 2018 from Principia, Subversive Capital, Thiel Capital and undisclosed funds, family offices and private investors. Thiel and Atai had already injected seed financing at an undisclosed date.
Atai is Compass’ largest shareholder, with a 23.1% stake post-IPO (down from 29%). McQuade’s 5.8% stake has dropped to 4.7%.
Other notable shareholders include chief executive George Goldsmith and chief innovation officer Ekaterina Malievskaia (13.2% post-IPO each), and Peter Thiel (6% post-IPO).
Cowen, Evercore ISI and Berenberg are the joint book-running managers, while Canaccord Genuity is the lead manager and HC Wainwright is the co-manager for the offering. They have been granted a 30-day option to purchase up to an additional 1.12 million ADSs.
