Compass prices up to $285M private placement financing

COMPASS Pathways has entered into a securities purchase agreement with a select group of healthcare specialist investors for the private placement of 16,076,750 American Depositary Shares representing 16,076,750 ordinary shares, and warrants to purchase up to 16,076,750 ADSs at a purchase price of approximately $7.78 per ADS and accompanying Warrant to purchase one ADS. Each Warrant will have an exercise price of $9.93 per ADS, representing a 30% premium to the last sale price. The financing is expected to close on August 18, 2023, subject to customary closing conditions. The transaction is being led by TCGX and Aisling Capital with participation from new and existing institutional investors, including Vivo Capital, RA Capital, Surveyor Capital, Paradigm BioCapital Advisors LP, Soleus Capital, Armistice Capital, Logos Capital, PFM Health Sciences and Laurion Capital Management, among others. COMPASS will receive approximately $125 million in gross proceeds, before deducting placement agent commissions and offering expenses, from the private placement of ADSs and accompanying Warrants, and up to an additional approximately $160 million in gross proceeds if the Warrants are fully exercised for cash. The Warrants will be exercisable at the election of the investors for a three-year period. The private placement is being conducted in accordance with applicable rules of the Nasdaq Stock Market and was priced to satisfy the “Minimum Price” requirement. COMPASS intends to use the net proceeds from the proposed financing to fund its pivotal phase 3 clinical program in treatment-resistant depression, its commercial planning and preparation efforts, its on-going phase 2 trials in anorexia nervosa and post-traumatic stress disorder, its development of digital technologies to complement and augment its therapies and its discovery and preclinical research, as well as for general and administrative expenses, working capital and other general corporate purposes. The aggregate proceeds from this proposed financing, combined with current cash and cash equivalents, are expected to be sufficient to fund the current operating plan into late 2025. Morgan Stanley and TD Cowen are acting as the placement agents for the private placement.