Compass Pathways co-founders exit to pursue ‘broader goals’

Compass Pathways plc (Nasdaq: CMPS) saw its stock price slip more than 12% on news that that its co-founders, George Goldsmith and Ekaterina Malievskaia, resigned from the company’s board of directors, effective today.

The resignations come as the company progresses through late-stage clinical development and prepares for potential commercialization of its proprietary psilocybin formulation, COMP360.

In a LinkedIn post, Goldsmith reflected on his eight-year journey with the firm.

“It’s been a privilege to contribute to developing breakthrough therapies in mental health,” Goldsmith wrote. “Moving forward, I’m dedicating myself to innovating the broader mental health care ecosystem. I believe in the power of public-private collaboration to drive significant change.”

“George and Katya’s departure is a natural progression as we have evolved from a founder-led to a phase 3 biotech, and we are grateful for everything they have contributed since founding Compass,” Chris Williams, chief communications officer for Compass, told Green Market Report on Friday.

In an 8-K filing earlier this week, Compass also stated, “Neither Mr. Goldsmith’s nor Dr. Malievskaia’s decision to resign was the result of any disagreement with the Company on any matter relating to the operations, policies or practices of the Company.”

“Everyone has a story, and too often this story includes the shortcomings of existing treatments and the pain and frustration of navigating the system,” Malievskaia said in a separate news release Thursday.

“I step down from the board convinced that the company is in good hands and on the right track financially, in its programs, and in preparation for a potential commercial launch to bring treatments to those in need. Innovation in mental health care remains as important to me as it was ten years ago, and I plan to continue to apply my experience and knowledge to the field.”

Goldsmith and Malievskaia, who co-founded the company in 2016, led Compass Pathways through several significant milestones, including securing special designations from the U.S. Food and Drug Administration and U.K. authorities for COMP360. They also helped oversee the largest study of psilocybin ever conducted, with results published in the New England Journal of Medicine, setting the stage for its ongoing phase 3 program.

The company in that span of time also raised significant funds through financing rounds and a successful IPO on NASDAQ, as well as established key partnerships with academic and health care institutions.

Compass is currently focusing its efforts on phase 3 clinical trials of its synthetic psilocybin treatment (COMP360) for treatment-resistant depression, as well as phase 2 trials for post-traumatic stress disorder and anorexia nervosa.

In a joint note to the Compass team shared on Goldsmith’s LinkedIn post, the two expressed their belief that the company has achieved “escape velocity” under the leadership of CEO Kabir Nath and is “well on its way” to move its clinical trials along and prepare for potential commercialization.

“Founders and entrepreneurs are wired to start things, transforming ideas into organisations with ambition and momentum,” they noted. “We’ve done that with Compass. We’ve also realised that our overarching goal to transform mental health care requires more than a new treatment modality — and more than any single organisation can achieve.”

David Norton, a former Johnson & Johnson executive and current lead independent director on the Compass board, will serve as interim chair while the company searches for a permanent replacement.

“It is time to turn my attention to the next phase of making this vision a reality for patients, providers and health systems independent of any particular treatment modality,” Goldsmith said.

The co-founders are both major shareholders of the company. Earlier this month, Goldsmith sold a chunk of shares in the company on two consecutive days (March 12 and March 13), according to filings. Goldsmith sold the shares automatically through a pre-set trading plan, designed to prevent insider trading accusations. The sales totaled around $704,000.

Goldsmith still holds a large number (4,069,630) of shares, though. Malievskaia sold a similar number of shares indirectly at the same time. However, despite being married and having a joint trading plan, they both claim in filings that they don’t have control over each other’s shares in the company.