Compass's psilocybin trial is yet another blow to the psychedelic market

Compass Pathways’ psilocybin-based depression treatment showed a statistically significant benefit over placebo, but investors dumped the stock after underwhelming data.

Why it matters: The results are a milestone for psychedelic medicine, yet they raise doubts about Compass’ competitiveness in an increasingly crowded market for treatment-resistant depression.

Backstory: Compass tested its proprietary psilocybin in a 258-person trial. Patients showed a 3.6-point improvement over placebo on a standard 60-point depression scale. Experts found no major safety concerns, but the company’s shares dropped nearly 50% on the news.

Big picture: Investors had hoped for at least a 5-point difference — halfway between Compass’ result and earlier studies showing 6-point improvements. Without key details like response or remission rates, questions linger about the drug’s lasting impact and market edge.

Yes, but: GH Research, a rival, recently posted far stronger data — a 16-point drop — from its inhaled psychedelic drug in a smaller trial.

What’s next: Some analysts still see Compass’ results as “clinically meaningful,” noting potential convenience over Spravato, a ketamine-based treatment from J&J. Compass plans to release 26-week follow-up data next year.