Were Compass Pathways' Clinical Trial Results Really That Bad?

Compass Pathways (CMPS -0.47%) has released data for a phase 2b study of its COMP360 psilocybin treatment for depression. In this Motley Fool Live video recorded on November 15, Motley Fool contributors Keith Speights and Brian Orelli point out that the therapy helped reduce patients' depression symptoms, but the drug's effectiveness seemed to wane over time and adverse effects were seen in patients taking higher doses.

However, the company still has the potential to make improvements to the drug, and will likely have significant flexibility with the FDA in the eventual approval process since the drug is targeting treatment-resistant depression where patients have no other options.

Brian Orelli: Compass Pathways -- ticker there is CMPS -- released data last week for its COMP360 psilocybin. That's a drug that comes out of the magic mushrooms; it's a treatment for depression. The company characterized the data as positive, and I would generally agree there, but shares fell substantially. Is it just a sell-the-news buying opportunity, or is there more to the data? It looks like there was maybe an issue with [the] duration of how long the drug helped patients improve their depression symptoms.

Keith Speights: First of all, I agree with you that Compass Pathways' data was generally positive overall. The company announced that the highest dose, which was [a] 25-milligram dose of its COMP360 therapy, achieved its primary endpoint in the phase 2b study in treatment-resistant depression. The stock fell though, I think, mainly because the clinical benefit of the drug appeared to taper off and wane at the 12-week mark. Also, the higher dose had more treatment-emergent adverse events compared to the lower doses of the drug, and specifically, 12 patients reported suicidal thoughts. Again, we are talking about treatment-resistant depression, so that's not unusual, but the higher dose had more of those adverse events than lower doses did.

Probably the bigger concern for investors, though, is the question about duration. But I think it's important to note that this study involved only a single dose of COMP360. Compass Pathways could find that ongoing doses are the right approach for some individuals, and the company's looking into their data to look at some of the people and the participants in the study who didn't respond quite as well and where the duration didn't last as long. They'll do some tweaking here. I still think Compass has significant potential with COMP360. Is this a buying opportunity? I think maybe so.

Orelli: It was a little bit high-priced, I thought, on the risk-reward spectrum, considering that although the COMP360 seemed like it was going to work based on historical data for the active ingredient -- the bigger issue, I think, is how do you run a phase 3 clinical trial where the drug is psychoactive? It seems like people would know whether they've got the drug or not, don't you think?

Speights: Yes. You would think so, but it's going to be interesting to see how they design the late-stage clinical study. By the way, this drug also comes with another form of therapy. I think there's music playing, calming music and things like that. It's a combination of the therapy [of] the drug itself and then this other therapy, the environmental therapy, I guess you might call it.

Orelli: They even have books that you read while it's settling in, and the books are all supposed to be calming and the room is all like -- it's the same for every treatment area, and so that's interesting. I think the other thing is they're comparing it not to placebo but to a one-milligram dose. Maybe one milligram is enough to give you the feeling that you've taken the drug. Maybe that's the way they are going to be able to get around that with the FDA, to have an actual control group.

Speights: That would make sense. I think the FDA will give a lot of latitude to Compass Pathways here. Remember, this is treatment-resistant depression. There aren't good treatments for it, and so I think the company will have some flexibility there.