Stifel Says Compass Pathways Selloff 'Significantly Overdone' After Psilocybin Trial Data

Stifel said the plunge in Compass Pathways shares was“significantly overdone” after data showed that the company's COMP360 met the primary endpoint in a Phase 3 trial for treatment-resistant depression.

Compass Pathways shares plunged 49.2% to close at $2.35 on Monday before recovering 7.2% to $2.52 in after-hours trading.

While the 3.6-point difference on the Montgomery-Åsberg depression rating scale (MADRS) was“a little lighter than expected,” the firm noted the results were“clearly positive” from a regulatory perspective.

Stifel added that the effect size was“pretty good” for a treatment-resistant population and argued that in neuropsychiatry, commercial success is not always determined by effect size alone. 

The firm maintained a 'Buy' rating on the stock and a $11 price target.

On Monday, Compass said that a single 25 mg dose of COMP360 meaningfully and statistically significantly reduced depression symptoms vs. placebo at week 6.

The p-value was less than 0.001, meaning there was less than a 0.1% chance the result was due to chance.

Compass Pathways is also conducting a second Phase 3 study evaluating the effects of two doses of COMP360 given three weeks apart. 

A second late-stage study, COMP006, is ongoing and will assess the effect of two fixed doses, which will be given three weeks apart. 

The company plans to discuss the results with the U.S. Food and Drug Administration.

Following the trial update, Evercore ISI downgraded Compass to 'In Line' from 'Outperform' and cut its price target to $6 from $11, calling the 3.6-point symptom reduction "underwhelming" and citing questions around the drug's long-term durability.

Meanwhile, H.C. Wainwright maintained a 'Buy' rating and $45 target, calling the results "a historic first for psychedelic therapy" and viewing COMP360 as a potential first-in-class option in a large, underserved market.

On Stocktwits, retail sentiment was 'extremely bullish' amid a 7,567% surge in 24-hour message volume.

One user said they were still holding Compass Pathways shares despite disappointment over the more than 50% drop following positive trial results, noting that the after-hours price action provided some relief.

Another user pointed out that a similarly weak initial reaction had occurred with Sagimet Biosciences after its Phase 3 data, but the stock recovered.

The stock has declined 43.4% so far in 2025.

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