Compass Pathways weakness ‘significantly overdone,’ says Stifel

Stifel acknowledges that the 3.6 point MADRS delta between drug-vs-placebo for COMP360 was “a little lighter than expected,” but argues that the magnitude of the stock reaction is “significantly overdone” after Compass Pathways (CMPS) announced top-line data meeting the primary endpoint in the Phase 3 COMP005 trial. The COMP360 data represents “a clearly positive result from a regulatory perspective,” and the effect-size is “actually pretty good for a treatment-resistant population,” according to the analyst, who adds that it is “simply not clear” that effect size is a major driver of commercial success in neuropsychiatry. The firm has a Buy rating and $11 price target on Compass shares, which are down $2.15, or 46%, to $2.48 in Monday afternoon trading.