Compass Pathways initiated with an Outperform at RBC Capital

RBC Capital initiated coverage of Compass Pathways with an Outperform rating and $23 price target. A number of academic studies have shown clinically meaningful mood benefits for patients taking psilocybin, including in both cancer patients and more typical major depressive disorder, or MDD, patients, notes the analyst, who says Compass’ own studies have confirmed the efficacy of 25 mg psilocybin. Citing “increasing evidence that the psychedelic mechanism is effective in mood disorders,” the firm sees a high likelihood of a positive Phase 3 readout in Q4 and believes the recent cooling of the psychedelic space has created “a particularly attractive buying opportunity,” the analyst tells investors.