Morgan Stanley on Compass Pathways (CMPS): 'we view today’s update as incrementally encouraging'
Morgan Stanley analyst Judah C. Frommer reiterated an Overweight rating and $16.00 price target on Compass Pathways (NASDAQ: CMPS).
The analyst comments "The FDA announced this morning "a series of regulatory actions to support the development of serotonin-2A agonists and related products" (see here) following its Executive Order from earlier this week (see here). While the EO focused on accelerating access for serious mental illness broadly, today’s update centers on the issuance of Commissioner’s National Priority Vouchers (CNPV) for three psychedelic programs. Importantly, while the announcement itself did not identify specific recipients, Compass Pathways announced shortly after (see here) that they received a CNPV for COMP360 in TRD and were also granted rolling NDA submission/review. Beyond the CNPV vouchers, the FDA highlighted additional supportive actions (e.g., allowing a noribogaine IND to proceed and forthcoming clinical guidance), collectively signaling a more coordinated regulatory push to advance psychedelic therapies. These updates track with the regulatory backdrop we highlighted as likely supportive into 2026 for CMPS stock (see here). From a program perspective, the CNPV framework is intended to accelerate development and review through enhanced FDA interaction and shortened review timelines, while maintaining standard safety and efficacy thresholds. With rolling NDA submission confirmed for COMP360 in TRD - which management has previously guided could wrap up following 26-week Ph3 COMP006 data in early 3Q - we believe approval in TRD for COMP360 could be granted by as early as YE26 for which mgmt. have noted commercial readiness. Taken together, we view today’s update as incrementally encouraging on the heels of the earlier EO, providing greater visibility into FDA's stance on COMP360 and underscoring de-risking of review and potential approval timelines."
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Shares of Compass Pathways closed at $9.15 yesterday.