# Compass Pathways Financial Model Clinical-stage biotech developing psilocybin therapy for treatment-resistant depression (TRD), seeking regulatory approval in EU, US, and Canada. - Canonical: https://finamodel.com/startups/compass-pathways - Excel download: https://finamodel.com/startup-models/compass-pathways.xlsx - Category: Biotech/Pharma - Model type: Biotech rNPV - Funding round: Series B - Funding: $80M - Founded: 2021 - Geography: EU (EMA), US (FDA), Canada; future: Asia (PMDA). Clinical sites in 22 cities across EU, US, and Canada [DECK, slide 14]. - Customer: B2B2C ## About the company Compass Pathways develops psilocybin therapy for treatment-resistant depression, combining an oral capsule with one to three supported sessions, a digital preparation platform, and trained therapists. The company received FDA Breakthrough Therapy Designation in 2018 and had EMA scientific advice and SME qualification. The therapy is intended for delivery through clinics and hospitals, with value-based reimbursement from public or private payors after approval. Compass targets contribution margins above 50% for itself and clinic partners, while the digital preparation tool may be licensed or bundled; no price, royalty, or launch revenue is disclosed. Compass was pre-revenue with a £25 million Series A and a 216-patient Phase IIb study across Europe, the U.S., and Canada. The model should stage trial burn, regulatory probability, launch timing, treatment capacity, reimbursement, clinic economics, and cash runway. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition - Core product: Psilocybin therapy for TRD - oral psilocybin capsule administered in 1–3 sessions (~10–12 hours total therapy regime), supported by a digital preparation platform and trained therapists. - FDA "Breakthrough Therapy Designation" received October 2018 for TRD. - EMA scientific advice and SME programme qualification secured. - Value claims vs. existing antidepressants: faster/more durable remission, superior efficacy, no daily adherence burden, reduced healthcare resource utilisation, lower hospitalisations. - Phase IIb dose-finding study (216 patients) underway across EU, US, Canada; primary endpoint at Week 3. - Target launch: 2022 (EU/US). ## Market - Global depression prevalence: 320m people; 100m with TRD. - Affected population grew 18% in 2005–2015. - Annual economic cost of depression (EU + US combined): £300bn total, £125bn direct, £40bn prescriptions. - EU-28: £140bn total, £50bn direct costs (outpatient £27bn, inpatient £13bn, prescriptions £10bn). - US: £160bn total, £75bn direct (outpatient £31bn, inpatient £14bn, prescriptions £30bn). - TAM (addressable market for psilocybin in TRD): - MDD yearly prevalence: 78m patients (US + EU28 + Japan). - TRD addressable share: 18–26% of MDD patients (50% diagnosed; 50–75% fail two treatment lines). - Direct medical cost per TRD patient per year: £10–15k. - Implied TAM: £140–200bn per year (assumes ubiquitous access). - Broader CNS pipeline TAM (long-run): Anxiety (275m), Chronic Pain (130m), Alcohol Dependence (120m), BDD (115m), Eating Disorders (70m), OCD (50m). - Global mental health cost forecast: $16 trillion by 2030. - Competitive revenue benchmarks (global peak sales): Esketamine est. £1.5bn, Zoloft £1.8bn (2005), Cymbalta £3.3bn (2013), Abilify £5.2bn (2017), CBT >£5.3bn/yr US only. ## Revenue model - Primary channel: Sell psilocybin therapy (drug + training + quality management system) to healthcare delivery points (clinics, hospitals). - Reimbursement model: Outcome-based / value-based reimbursement from payors (government/private insurers) once approved. - Secondary revenue avenue: Technology platform (digital preparation tool licensed or bundled with therapy). - Contribution margin target: >50% for COMPASS and clinic partners at launch. - No disclosed royalty or licensing revenue model in deck. ## Traction & metrics - Pre-revenue; in Phase IIb clinical trial as of January 2019. - Series A raised: £25m, September 2018. - Phase IIb: 216 patients enrolled across 13 EU sites and 9 US/Canada sites. - Phase II/IIa external trial results (third-party, not COMPASS-run): - Imperial College London (Carhart-Harris 2016): 12 TRD patients; 63% response at 1 week, 47% at 5 weeks, 32% medication-free at 1 year. - Johns Hopkins (Griffiths 2016): 51 patients; 92% antidepressant response at 5 weeks, 79% at 6 months. - NYU (Ross 2016): 29 patients; 60–80% antidepressant response at 6 months. - >70% of patients rank psilocybin therapy among top 5 most meaningful experiences of their lives. - Sage Therapeutics comparator: $5.5bn market cap as of Jan 2018 post Phase II/III results; IPO at £98m; Phase II uplift +£1.7bn, Phase III uplift +£1.6bn. ## Unit economics - Contribution margin: >50% stated for COMPASS and clinic partners combined at launch. - Per-episode therapy cost (psilocybin): Pricing TBD; therapy regime is 1–3 sessions / 10–12 hours (vs. ECT at £20–24k, TMS at £9–11k). - Direct medical cost per TRD patient per year: £10–15k (payors' current spend) - implied price ceiling / value anchor. ## Competition / moat Competitive landscape: - SSRI/SNRI (first-line): Low efficacy for TRD, cheap (£200–600/episode), fully reimbursed. - Atypical antipsychotic augmentation: Medium efficacy, £1,785–1,985, reimbursed. - CBT: Medium efficacy, £2,000–2,200, reimbursed. - Esketamine (Janssen, in development): High efficacy (uncertain), £2,200–2,600, not yet reimbursed; mixed Phase III results; intranasal, administered in clinic, twice-weekly then weekly dosing. FDA BTD obtained 2013. - Ketamine (off-label): High short-term efficacy, £4,200–6,300, not reimbursed, 12-day regime. - TMS: Medium-low efficacy, £9–11k, not reimbursed. - ECT: High short-term efficacy, £20–24k, partially reimbursed; invasive. Moat: - IP: Four independent patent families filed (UK/PCT/US, Oct 2018); NCE status; data exclusivity 8–11 years EU, 5–7.5 years US. - FDA Breakthrough Therapy Designation (Oct 2018) - reduces trial burden vs. non-BTD: ~1 pivotal trial vs. 2; 4.9-year IND-to-approval vs. 12 years. - EMA scientific advice and SME status. - Proprietary digital preparation platform and therapist training programme. - KOL / academic network: Prof David Nutt (Imperial), Prof Guy Goodwin (Oxford PI), Prof Alan Schatzberg (Stanford), Prof A.J. Rush (UT Southwestern/Duke-NUS). ## Team & funding ask / use of funds Team leads: - George Goldsmith - Executive Chairman & Co-Founder (Tapestry Networks, TomorrowLab@McKinsey). - Ekaterina Malievskaia, MD - CSO & Co-Founder. - Lars Wilde - COO & Co-Founder (SpringLane, BCG, Waterland PE). - Hans Eriksson, MD PhD - CMO (Lundbeck, AstraZeneca). - Marco Mohwinckel - CCO part-time (Janssen, WebMD). - Joe Heinen - CFO part-time (Goldman Sachs). - Sue Stansfield, PhD - Clinical Trials Director (30 years: Pfizer, Janssen, GSK, PPD). Series A investors include: ATAI Life Sciences (Christian Angermayer), Peter Thiel (Thiel Capital), Mike Novogratz (Galaxy Investment Partners), Thomas Insel MD (former NIMH director), Indus Capital Partners, Sir Michael Hintze (CQS). Funding: - Series A: £25m raised September 2018. - Use of funds: Phase IIb completion through H2 2020; Phase III preparation; digital technology platform development. --- ## Recommended financial model - **Archetype + why:** Pre-revenue clinical-stage biotech rNPV / probability-adjusted DCF model. COMPASS has no revenue and will not generate revenue until 2022 at the earliest (conditional on Phase IIb success → Phase III → regulatory approval). The right model is a risk-adjusted net present value (rNPV) model that: (a) projects R&D spend (opex burn) through each trial phase, (b) applies trial success probability at each phase gate, (c) models peak commercial revenues post-approval, and (d) discounts back at an appropriate biotech WACC. Secondary output: 13-week / 24-month cash burn runway model to size next fundraise. - **Forecast horizon & granularity:** - Clinical phase (2019–2022): Quarterly cash burn, milestone-gated. No revenue. - Commercial phase (2022–2032): Annual P&L and cash flow. Revenues start 2022 (EU), 2023 (US). 10-year commercial forecast captures data exclusivity window. - rNPV valuation date: Current (Jan 2019); discount back from peak sales year (~2026–2028). - **Key drivers & assumptions:** *Trial & regulatory:* - Phase IIb success probability: 60% (CNS BTD historical precedent; early signals strong but TRD is a high-hurdle endpoint) - Phase III success probability: 55% (BTD reduces trial size; esketamine mixed Phase III sets cautious prior) - Combined PoS (IIb × III × approval): ~33% - Phase IIb cost & timeline: 216 patients, completion H2 2020; cost £15–20m (typical mid-size Phase II CNS; funded by current £25m Series A) - Phase III cost: £60–90m (1 EU pivotal + 1 US study; ~400–600 patients; estimated from BTD trial parameters in slide 10) - Phase IV / post-approval: £10–15m p.a. *Market penetration:* - TRD addressable patients (US + EU28 + Japan): 78m MDD × 18–26% TRD rate × 50% diagnosed = ~7–10m patients - Market penetration year 1 post-launch: 0.5–1% of addressable patients (specialised channel, limited clinic capacity at launch) - Peak penetration (year 5–7): 3–5% of addressable patients (consistent with esketamine/Abilify benchmarks of £1.5–5.2bn peak sales) - Ramp: linear over 5 years from launch *Pricing & margins:* - ASP per treatment episode: £3,000–5,000 (positioned below esketamine at £2,200–2,600 per episode but for fewer sessions; value anchor is £10–15k payor cost per patient per year; target contribution margin >50%) - COGS (drug + training + QMS support): 40–50% of ASP → gross margin 50–60% - Operating expenses post-approval: 30–40% of revenue (sales force, medical affairs, platform), declining with scale *Data exclusivity / competition:* - Revenue cliff (generic entry): EU Year 10–11, US Year 5–7.5 post-approval - Generic erosion: 50% revenue decline in year 1 post-exclusivity, 80% by year 3 *Valuation:* - Discount rate (WACC): 15–20% (clinical-stage biotech; high binary risk) - Terminal value: minimal / excluded given generics cliff; or 5x EBITDA at exclusivity expiry - Comparable valuation: Sage Therapeutics IPO at £98m pre-Phase II; +£1.7bn on Phase II; +£1.6bn on Phase III; peak market cap $5.5bn - use as sanity check on rNPV output - **Scenarios (Base / Bull / Bear - which variables flex):** - **Base:** PoS IIb 60% / PoS III 55%; ASP £4k; penetration 3% at peak; launch 2022. - **Bull:** PoS IIb 75% / PoS III 65%; ASP £5k; penetration 5% at peak; accelerated BTD approval 2021; out-licensing deal adds royalty stream. - **Bear:** Phase IIb fails or is inconclusive (PoS 35%); ASP £2.5k (payor pushback); penetration 1.5%; delayed Phase III (launch 2024); esketamine gains market share first. - **Required sheets / outputs:** 1. **Assumptions** - all drivers in one place, colour-coded vs.. 2. **Clinical P&L / Burn** - quarterly R&D opex, headcount, SG&A, cash runway 2019–2022; milestone gates. 3. **Commercial P&L** - annual IS from 2022: revenue (patients × price), COGS, gross profit, opex, EBIT, NOPAT. 4. **Cash Flow** - operating + investing CF; fundraise tranches; ending cash. 5. **rNPV Waterfall** - probability-weight each phase; discount peak revenues; sum to enterprise value. 6. **Scenario / Sensitivity** - 2-way table: PoS × ASP; PoS × penetration rate. 7. **Comps** - Sage Therapeutics, Janssen esketamine, GW Pharma (psychoactive precedent) as valuation sanity check. 8. **Dashboard** - KPI summary: cash runway, rNPV base, peak revenue, peak EBIT margin, valuation range. ## Frequently asked questions ### Is the Compass Pathways financial model free? Yes. The Compass Pathways model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.