COMPASS Pathways plc (CMPS) Q2 2023 Earnings Call Transcript

COMPASS Pathways plc (NASDAQ:CMPS) Q2 2023 Earnings Conference Call August 3, 2023 8:00 AM ET

Company Participants

Stephen Schultz – Senior Vice President of Investor Relations

Kabir Nath – Chief Executive Officer

Guy Goodwin – Chief Medical Officer

Mike Falvey – Chief Financial Officer

Conference Call Participants

Ritu Baral – Cowen and Company, LLC

Charles Duncan – Cantor Fitzgerald

Patrick Trucchio – H.C. Wainwright & Co, LLC

Francois Brisebois – Oppenheimer & Co.

Elemer Piros – EF Hutton

Thomas Shrader – BTIG

Kyle Qian – Canaccord Genuity

Michael Okunewitch – Maxim Group LLC

Operator

Good day, ladies and gentlemen, and welcome to the COMPASS Pathways Second Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded.

I would now like to introduce your host for today’s conference, Stephen Schultz. You may begin.

Stephen Schultz

Welcome all of you, and thank you for joining us today for our second quarter 2023 results conference call. Again, my name is Steve Schultz, Senior Vice President of Investor Relations at COMPASS Pathways. And today, I’m joined by Kabir Nath, our Chief Executive Officer; Mike Falvey, our Chief Financial Officer; and Dr. Guy Goodwin, our Chief Medical Officer. This call is being recorded and will be available on the COMPASS Pathways’ Investor Relations website shortly after the conclusion of the call.

Before we begin, let me remind everyone that during the call today, the team will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. You should not place undue reliance on these forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those risks and uncertainties described under the heading Risk Factors in our quarterly report on Form 10-Q, filed with the U.S. Securities and Exchange Commission and in subsequent filings made by COMPASS with the SEC.

Additionally, these forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward statement, even if our estimates or assumptions change.

I’ll now hand the call over to Kabir Nath.

Kabir Nath

Thank you, Steve. Good day, everyone, and thank you for joining us. During this past quarter, COMPASS Pathways has continued to achieve strong results across important aspects of our business. I will cover the progress of our trials as well as commercial updates.

Guy will talk about encouraging regulatory and clinical news, and Mike will address the excellent progress we have made to extend our financial runway. Our Phase III trials in treatment-resistant depression, COMP 005 and COMP 006 are ongoing and remain on track for primary endpoint readouts in summer 2024 and mid-2025, respectively. Both studies are on track and in line with our expectations, with some patients having now progressed to Part B for both studies. 2/3 of the Comp 005 sites have been initiated.

I’ll remind you that these are the largest, most robust trials ever conducted to evaluate the use of psilocybin treatment or indeed any psychedelic drug, and the trials are designed to support an NDA submission to the FDA. We noted in the first quarter that the American Medical Association has accepted a current procedural terminology, or CPT III code for psychedelic therapies.

In the second quarter, as it happened on the last day of the quarter, the actual code language was released. As we have indicated, this language specifically provides physicians and other qualified health care professionals with a means to track the work involved in and ultimately seek reimbursement for delivering support for psychedelic treatments. We hosted a webinar on this development, which include experts from both the payer and treatment delivery communities. I hope you had a chance to watch the program, which is archived on our website in the Investors Section.

We believe the language of the CPT III tracking code is particularly well aligned with the requirements of COMP360 for the psilocybin treatment and a crucial step toward a reimbursed CPT code that covers psychological support for therapies like COMP360, subject to FDA approval. Most importantly, it’s a key step towards enabling broad and equitable access to psychedelic treatments. Without CPT codes, it will be challenging to obtain reimbursement by CMS and health plans in the U.S. for the psychological support provided during the administration of COMP360, which would result in a severe limitation of access to new and effective treatments that require in-person support.

This CPT III code is an important recent development that supports the commercial landscape into which we plan to launch COMP360. We also saw this quarter that esketamine sold under the brand name Spravato, has now achieved sales of $255 million for the first half of the year in the U.S. with quarter-over-quarter growth of roughly 30% and year-over-year growth of over 80%.

We believe that this demonstrates the level of unmet need in treatment-resistant depression. This growth is also driven by the increasing interest in mechanisms, which offer rapid treatment effect as well as the scaling of the infrastructure of interventional psychiatry facilities and other treatment centers.

These are the types of facilities that we believe would be able to deliver COMP360 treatment, if approved. Also in this quarter, the U.S. Patent Trial and Appeal Board reaffirm decisions to uphold two key patents, the 257 and 259 patents, which cover the COMP360 crystalline psilocybin polymorph A. Intellectual property is a key element of our overall commercial protection for COMP360 and central to our work in developing innovative treatments for therapeutic areas of significant unmet medical need. We were pleased with this decision as it marks the conclusion of what had been outstanding challenges to these patents.

I’ll now hand over to Guy to update you on regulatory and clinical news during the quarter. Guy?

Guy Goodwin

Thank you, Kabir. In the past quarter, the FDA issued draft guidance on the development of psychedelic medicines to address the unique features of this class of treatment. We are pleased that this guidance is well aligned with the COMP360 Phase III program design and includes many of the points that we have discussed with the agency. We believe this guidance is an important validation that FDA is supportive of a robust and appropriate development path for novel psychedelic-based treatment like COMP360. A particular note in the FDA guidance is the use of psychotherapy where the agency cautions such interventions may complicate the assessment of clinical trials.

I will note that COMP360 treatment is not designed to utilize psychotherapy but instead, psychological support, which primarily focuses on safeguarding patients. In fact, we think it is inappropriate to refer to psilocybin treatment as psychedelic-assisted psychotherapy as commonly occurs.

Regulators generally evaluate and approve investigational drug candidates based on quality, safety and efficacy. They have not historically evaluated or regulated psychotherapy. Our approach is clear to achieve regulatory approval, the drug effect needs to be established unambiguously in clinical trials, which is only possible with any psychological support is applied in a consistent way and is not an alternative treatment itself.

A recent opinion piece we published with academic colleagues in the American Journal of Psychiatry goes into more detail about the important distinction. The evidence we have seen from rigorous studies of psilocybin treatment to date leaves us to believe that the potential therapeutic effect of psilocybin treatment comes primarily from the drug itself, while psychological support is essential for safeguarding patients before, during and after administration.

Psychological support is not independent psychotherapy as commonly understood. The intense psychedelic states associated with psilocybin are incompatible with simultaneous evidence-based psychotherapy.

Turning to our clinical studies. In July, the Journal of Neuropsychopharmacology published our data from an open-label study that suggested that the use of selective serotonin reuptake inhibitors or SSRI antidepressant does not interfere with the potential therapeutic effect of COMP360. As we have remarked previously, this finding, if confirmed, may prove to have important implications for the eventual real-world use of COMP360, because it could offer patients potentially greater choice in how far they withdraw from other drugs before treatment with COMP360 in the future.

Beyond treatment-resistant depression, our Phase II studies in PTSD and anorexia nervosa continue to progress well with PTSD data expected this year. It is still too early to provide a readout guidance for the anorexia nervosa study, which is now making much better progress after amendment to our protocol. We will update you regarding timing on future calls.

Looking beyond our sponsored trial to investigator-initiated study, we continue to see encouraging data emerge. For example, a study of cancer patients with depression who received a single dose of COMP360 psilocybin treatment was presented at this year’s ASCO meeting, and a study demonstrating the potential for COMP360 psilocybin treatment in female patients with anorexia nervosa was published in Nature Medicine.

These data support the robust knowledge base that COMPASS is developing around our COMP360 treatment. Moreover, this preliminary research can be an important step in finding new and better options for patients with difficult-to-treat conditions.

I will now hand the call to Mike for the financial overview. Mike?

Mike Falvey

Thank you, Guy. I’ll now recap the highlights of our second quarter financial results. Comparing this year to last year, for the second quarter 2023, net loss was $28.3 million or $0.62 per share, including non-cash share-based compensation of $4.6 million compared to net loss of $21 million or $0.50 per share, including non-cash share-based compensation of $3.2 million for second quarter 2022.

The R&D expenses increased to $19.8 million in second quarter 2023 compared with $15.9 million in the second quarter of last year. G&A expenses increased to $12.8 million in second quarter 2023 compared to $11.3 million in second quarter 2022.

I’ll now turn to analysis of our current second quarter results compared to the prior first quarter results. Our current quarter financial results reflect our continued success in advancing our Phase III trial in treatment-resistant depression and encouraging progress in expanding our cash runway. In line with our expectations, cash used in operations in the second quarter was $24.8 million in the middle of the guidance range we provided last quarter.

In this quarter, net loss was $28.3 million or $0.62 per share compared with a net loss of $24.2 million or $0.57 per share for the prior quarter. These results include non-cash share-based compensation of $4.6 million in this quarter and $4.1 million in the prior quarter. R&D expenses were $19.8 million in this quarter compared with $19 million in the prior quarter. The increase was mainly due to external development expenses related to our Phase III program. Other expenses also increased. G&A expenses were consistent in both quarters at $12.8 million.

Turning to our balance sheet. Cash increased by $31.1 million in the second quarter of 2023 and as financing activities generated $55.9 million. At the end of June, we concluded a potential $50 million debt facility with Hercules Capital and drew down $28.8 million net of issuance costs. Earlier in the quarter, we raised an additional $26.9 million from the sale of shares under our ATM facility. This financing activity was offset by net cash used in operating activities of $24.8 million. Regarding third quarter financial guidance, we expect two factors to create an unusually low range for cash used in operations, which we expect will return to a more conventional level in the fourth quarter and beyond.

We expect the third quarter net cash used in operating activities to be between minus $2 million and positive $18 million. First, we have completed contracts with our vendors, reflecting the final Phase III trial design. As a result, we will be able to reduce the balance of our prepaid cost, which will reduce our cash used in operations in the third quarter by close to $10 million. Second, we are expecting to receive our estimated $14 million 2022 UK, R&D tax credit in the third quarter. The low end of our guidance reflects the receipt of these funds in Q3, and the top end of the guidance reflects the funds being delayed until Q4.

Turning to full-year financial guidance. We are narrowing the range for cash used in operations to be between $80 million and $90 million. We have narrowed our full year range as a result of improved clarity around the scale and timing of expected Phase III costs and continued spending discipline in light of continued market uncertainty.

COMPASS continues to maintain a strong financial position with cash and cash equivalents of $148.2 million at June 30, 2023, compared with $143.2 million at December 31, 2022. We have recognized long-term debt on our balance sheet for the first time as a result of the debt facility to Hercules Capital, which we initiated in the second quarter. We continue to view our strong balance sheet as an important strategic asset, which we plan to manage carefully as we invest to advance these promising potential treatment while at the same time continuing to create value for our shareholders.

Thank you, and I’ll now turn the call back to Kabir.

Kabir Nath

Thanks, Mike. We’re pleased with our ongoing progress and continue to be conscious of the importance and responsibility of our leadership in the development of investigational psychedelic treatments, which we believe represents the next generation of mental health therapeutic options.

Importantly, our Phase III program in treatment-resistant depression is our clear focus and is progressing on track and in line with our expectations. As we moved through the clinical program and as we observe the commercial rollout of Spravato, we’re encouraged by an increasingly supportive alignment in the treatment network infrastructure that’s developed significantly since the Spravato launch.

We believe that this reflects a treatment paradigm that is here to stay, and we would expect much of this infrastructure relevant to COMP360 as well. In closing, I want to offer a heartfelt thank you to one of our co-founders, Dr. Ekaterina Malievskaia, who recently stepped down from her executive role as Chief Innovation Officer. Together with George Goldsmith and Lars Wilde, Katya co-founded COMPASS Pathways in 2017, determined to bring much needed innovation to the field of mental health care.

Katya leaves an indelible mark on the company she helped found. COMPASS today reflects both the rigor and precision one would expect from a scientist and the compassion for and commitment to patients that one would expect from a physician. That influence extends well beyond our company to the field of psychedelic medicine and mental health care. We’re closer to meaningful breakthroughs in care for patients, thanks to her work.

We’re pleased that we’ll continue to benefit from her experience and insights as she remains on the COMPASS Board of Directors. And I know that I speak on behalf of the entire COMPASS team in thanking her for her extraordinary vision, leadership and encouragement.

Thank you once again for your participation in today’s call. We’ll now turn to Q&A. So I will hand this call back to the operator.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question comes from Ritu Baral with TD Cowen. Your line is open.

Unidentified Analyst

This is Athena on for Ritu. To start off, I know in the 8-K, you issued today that ATAI has requested that COMPASS registered their shares. Could you provide any color on that request? And I have a follow-up question after this one. Thanks.

Kabir Nath

Thanks, Athena. It’s Kabir. Just checking, you can hear me clearly.

Unidentified Analyst

Yes.

Kabir Nath

So our understanding is that for ATAI, this is a matter of regular corporate housekeeping.

Unidentified Analyst

Got it. And my next question goes back to the CPT code. Is there a Level 1 code that exists as a maybe a good comparison for how you see the new CPT codes maturing into? We understand from KOLs that they often use some existing codes to cover ketamine administration. What are those? And what do they reimburse that?

Kabir Nath

Thank you for the question. So yes, certainly, if we look at the history of ketamine prescribing or indeed esketamine, once Janssen launched Spravato because no specific codes were applied for or approved for those, it is absolutely the case that providers have had to make two with existing codes. And I can’t give you the specific details of which codes they use, but we’re happy to follow up with that in more detail in the future. I think what’s important to note is that us, we recognize that what we are doing is unique. The six to eight hour support required for psilocybin, demanded that we actually do seek approval for as we now have received a new code.

And as you’ll be aware, this CPT III code provides for on an hourly basis, the tracking of the support that’s required for psychedelic medications. And therefore, we’re confident that this code will apply very much to us for the future but also potentially for other products that would require similar extended support, such as MDMA, if that would be approved for MDMA-assisted therapy.

Important to note, though, that the preparation and integration sessions that are also required for COMP360 psilocybin treatment will also be covered by existing codes. They will be covered by existing psychotherapy codes.

Unidentified Analyst

Got it. Thank you. I’ll hop back in the queue.

Kabir Nath

Thanks, Athena.

Operator

Thank you. Our next question comes from Charles Duncan with Cantor. Your line is open.

Charles Duncan

Hey. Good morning. Thanks for taking our question early, and congrats on the progress in the quarter, Kabir and team. I basically had three quick questions on the ongoing COMP 005 and 006 trials. I’ll just rattle them off quickly, and you can take them in order, if you want. The first is, are you seeing any, call it, rate limiter in terms of SSRI use and weaning off that in terms of enrollment in those trials.

The second is for Part B progression, are you seeing any differences in the option for retreatment thus far? I know it’s probably early, you probably don’t have a lot of patients, but differences between the two trials. And third question quickly is for Part C, you probably aren’t quite there yet, but have you had any patients enrolled in Part C? Or are you near to enrolling patients in Part C having gotten through week 26 of Part B? Thanks.

Kabir Nath

Thanks, Charles. So I’ll start and if Guy has any color to add, I’ll ask him to jump in. So no, I mean, it’s been very clear in our protocol, both in IIb and Phase III that washout is required. These are monotherapy trials. So far, we’re not seeing any experience that’s very different from what we saw in IIb. Obviously, for some patients, this is a significant issue, and we saw that in Part IIb, and we will see it in Part III as part of the prescreening and the screening, but it remains the fact that these are monotherapy trials and again, so far, the experience is consistent from our last trial to this one.

In terms of Part B and Part C, the numbers are not where I’m in a position to give you an answer on those at this stage. I would just go back to what I said, we’re on track, in line with our expectations with group. Guy, anything to add on?

Guy Goodwin

I don’t think so…

Kabir Nath

Okay. Thank you. Thanks, Charles.

Charles Duncan

Thank you.

Operator

Thank you. Our next question comes from Patrick Trucchio with H.C. Wainwright. Your line is open.

Patrick Trucchio

Thanks and good morning and congrats on all the progress. So several studies have been published recently as noted in today’s press release, I’m wondering if you could talk about the level of interest or acceptance in psilocybin therapy, specifically among neuropsych key opinion leaders and clinical trial investigators and how these views have changed, if at all? And how do you view this evolution of use progressing as we get closer to that Phase III readout next year?

Kabir Nath

Thanks, Patrick. I will pass that to Guy.

Guy Goodwin

Thanks, Patrick. I think there’s been a consolidation rather than a change. I think people are a bit clearer now about what’s actually required. We’ve worked pretty hard to emphasize our innovation and our forward-looking in this field and to also emphasize that our reliance is on data. And I think that’s respected. And I think that’s one of the ways we get progress. And of course, that speed is what we really want in terms of getting this to patients as soon as possible. I mean clearly, there’s no immediate possibility that the clinicians of the kind you describing can use the treatment. So it remains for most of them a little hypothetical, but the interest is still there.

And I think as we move forward with this greater evidence around the prevalence of TRD, the unmet need that is clearly there. I think that’s been an important change really just in the last year or two with really quite influential reviews that have highlighted that change. And I think that underlines more than anything, the increased use of Spravato.

Patrick Trucchio

Can you talk a little bit more about the PTAB decision and the commentary around outstanding challenges to COMP360 patents? Specifically, I’d like to know how we should think about the durability of COMP360 IP, particularly against future potential challenges following the PTAB decision.

Kabir Nath

Yes. So Patrick, I mean, to be clear, what the PTAB decision does is it’s uphold the validity of our patent and it exhausts all the remaining lines of challenge or review against these patents. From our perspective, that clearly does increase our confidence that these are robust patents that we will be able to defend in the future in our commercial world, but we’ve always believed that these are robust patents that give us significant protection based on the extensive work we did to arrive on final day.

Patrick Trucchio

Great. Thank you so much.

Operator

Thank you. Our next question comes from Francois Brisebois with Oppenheimer. Your line is open.

Francois Brisebois

Hi. Thanks for taking the questions. Just to start here. I was just wondering, can you talk about your comfort with these trials kind of being the last potential trials in order to submit just based around the fact that – you do have a washout period and the SSRS situation. Is this something that’s evolving? Or are people comfortable with the monotherapy in the washout?

Kabir Nath

So I’ll start. One thing to know, and we did note, I mean it’s a small study, but we did actually publish during this quarter a paper of 19 patients on psilocybin on a background of SSRIs, and we saw no diminution of effect. So it adds an important piece of data, as Guy noted, which needs to be confirmed on a larger scale.

I think it’s clear from the point of view of really demonstrating the efficacy and safety of COMP360, but monotherapy is the right way to study it. What we’ve also commented in the past, though, is as you look at the design of Part B and Part C, there will be data in patients who have gone back on antidepressant who subsequently take COMP360, and to your question, we recognize that, that may reflect some of what happens in the real world. Guy?

Guy Goodwin

Yes. I think just on the point of view, the question also related earlier to the difficulties that it poses having to withdraw people. It is worth remembering that the Phase II study had exactly the same approach, and that was successful and particularly in the latter part of that study, really had an accelerating recruitment rate. So I think we remain comfortable that’s the right way to go in view of the theoretical need to demonstrate efficacy without a background of other drugs.

Francois Brisebois

Do you – on that note, do you see a difference here in terms of the monotherapy approach for TRD versus MDD when by definition, patients with TRD have failed multiple approaches? Or is this TRD and MDD are probably going to be taken in a similar context here?

Guy Goodwin

That’s a good question for which I don’t think we yet have an answer. The answer will really be based on our future experience, particularly in the second and third phases of our trials and in the 006 where there will be two treatments mean the issue of whether there will be a need for continuing treatment, I think, at the moment is open. The differences between MDD and TRD essentially reflect the fact that MDD is an easier condition to treat. There is no unmet need and that there are treatments already available. The difference obviously with TRD is it’s harder to treat and people have exhausted often the obvious treatments for MDD.

Francois Brisebois

Okay. Great. And just maybe for those less familiar here, can you just touch on the – we talked about Spravato and esketamine kind of take off here and how things are going in the correlation with you guys. Can you just maybe help us understand the compare and contrast, especially the differences here with your approach versus Spravato.

Kabir Nath

So clearly, for esketamine, it is a somewhat associated drug and the requirement is for a monitoring period after the self-administration of the drug. Clearly, with psilocybin, what we require is psychological support during the administration of the drug, which is a six to eight-hour session. However, the similarities and the reason we refer to this as demonstrating the growth of the infrastructure that’s getting to the infrastructure and it does require for esketamine, a dedicated space. It does require the place for the patient to be, it requires some time up of provider resources. And not only that, I think from a provider or an infrastructure perspective, but also a very important point that the acceptance of a rapidly acting novel mechanism in this space is also very important to us. So I think that’s where we would leave it for now.

Guy Goodwin

I think I would just add, of course, the number of visits required from the patient is really substantial in the case of ketamine or esketamine, whereas at the moment, we’re looking at one, we’re tapped trialing one or two visits for the treatment with COMP360.

Francois Brisebois

That’s very helpful. Thank you.

Operator

Thank you. Our next question comes from Elemer Piros with EFH. Your line is open.

Elemer Piros

Yes. Good afternoon, good morning. Can you hear me?

Kabir Nath

Yes, we can Elemer.

Elemer Piros

Yes. Thank you. Just wanted to confirm a couple of things about the PTSD study, Kabir. Is this a single dose that you administer to patients?

Kabir Nath

Yes, it is, Elemer.

Elemer Piros

Yes. And is there a similar psychological support that is provided in preparation during the administration and maybe one follow-up session similarly to your TRD study.

Kabir Nath

The design is very similar to the TRD study. We are obviously interested in the experience both of the patients and the therapist with this very different condition, but our psychological support is intended to be pretty generic and of course, as we’ve explained at some length, it is essentially about safety and safeguarding and it doesn’t really deal with different psychopathologies.

Elemer Piros

Yes. So Guy, if I remember correctly, the FDA sort of lumped together in their draft guidance psychological support and psychotherapy or they may have used the term “and”, do you think that there is an onus on you to demonstrate that there is no significant effect – therapeutic effect, clinical benefit from the support component?

Guy Goodwin

I think we’re under – I think we have an obligation to demonstrate the effects we observe are primarily attributed to the drug. I think we do that by using multiple dosage of regime, which was present in Phase II and we’ll also be in 006. And we think that, that comparison between one dose and another is the key to efficacy. It is, of course, crucial that the psychological support is equivalent in the two cases, both before, during and after the administration of the drug. And we think that our procedures for monitoring that are going to ensure that we can demonstrate, that we are indeed delivering psychological support, which is consistent in all those phases of the treatment.

I think what the FDA has asked further for that is rather difficult and suggesting factorial designs and various variations in the therapist. We think that’s difficult and will be of great interest if the academic sector wants to take that up and we will be interested in the results when they do.

Elemer Piros

Yes. And I was just wondering how accurate perhaps clinicaltrials.gov is at the moment. I see 11 and 15 U.S. sites as markets are recruiting, probably there is some overlap between the two Phase III studies. Is this roughly accurate as a snapshot of the current situation?

Kabir Nath

Certainly, as we said, on 005, more than 2/3 of sites have now been initiated, and I’d remind you that 005 is a U.S.-only trial. 006 is clearly a global trial. We have U.S. sites up and running at the moment, yes.

Elemer Piros

And what would be the rate limiting step to engage the European sites there?

Kabir Nath

We’re getting approvals. And so that process is well underway. We do have approvals in some other countries already outside the states, but that process is well underway. And again, it’s exactly in line with our expectation for the recruitment of 006.

Elemer Piros

I see. Thank you so much for taking my questions.

Kabir Nath

Thanks, Elemer.

Operator

Thank you. Our next question comes from Tom Shrader with BTIG. Your line is open.

Thomas Shrader

Thanks for taking the questions. I was going to follow on [indiscernible] and PTSD. How large is this opportunity? Who are the patients? Are they mostly military and do a lot of them also have a diagnosis of depression? And what I’m kind of getting at is, do you see this as a separate indication? Or would this be a subset of patients where the approach – depressed patients – where the approach was particularly appropriate? And is the hope here to get into the VA system, where it might be an attractive option. Thanks.

Guy Goodwin

Yes. So if I can take that. I mean currently, it’s not orientated specifically to the VA system. And that obviously is a great – of interest to us in the future. At the moment, we’re interested in the experience, the feasibility of doing these studies in this new indication. And we will know, obviously, after we completed this simple study, whether it is feasible. I think you can see it in two ways. In fact, it is a separate indication potentially but also it’s an important comorbidity.

We have an IIS, which will soon be reporting from California, which has recruited from the VA system, patients with treatment-resistant depression, we anticipate there will be a great deal of comorbidity with PTSD in that group. So to answer your question, we’re interested in both conditions, both PTSD independently, which is what we’re studying in London and New York and we’re interested in TRD with comorbid PTSD which, of course, is highly relevant to the VA population.

Thomas Shrader

Got it. Thank you.

Operator

Thank you. Our next question comes from Kyle Qian with Canaccord Genuity. Your line is open.

Kyle Qian

This is Kyle speaking for Sumant Kulkarni, two from us. How close are you watching the potential for Biogen and Sage’s zuranolone that might get approved later this week? We’re asking because there could be some relevance to the use of psychedelic therapeutics in depression as an approval there could pave the way for more episodic treatments for the depression versus chronic treatment.

Kabir Nath

Thanks, Kyle. So yes, I completely agree with you. If zuranolone, in fact, approved for MDD. And I know there’s a lot of debate in the community around how likely that it is. Absolutely. I mean it is an interesting paradigm of a rapid acting with episodic retreatment on demand as it were on relapse, we would absolutely be observing that with interest to see what sort of acceptance that have, how stage – end up positioning here. So yes, we are well aware of that.

Kyle Qian

Okay. Great. And then one more. Will the knowledge that COMP360 and that MDMA for PTSD have several differences in the respective programs. What are the types of results that COMP360 might need to achieve on the cap side for COMP360 to be competitive? And what would you need to see in your ongoing Phase II that might give you more confidence to proceed into Phase III?

Guy Goodwin

Well, [Caps 5] is our end point or one of our endpoints in that study. So we’ll have some idea of how to power any subsequent study. Clearly, the relative efficacy is best establishing a head-to-head comparison, and we’re a long way from doing that, I suspect. So I think we will simply have to take it as it comes. We remain very interested in the indication, but it’s a little premature to – just trying to think, how we would compare with MAPS. So there’s also quite an important difference in the demands for therapists time and indeed for the patient time between the two approaches, so is going to be a highly pragmatic comparison if and when it gets made.

Kyle Qian

Okay. Great.

Operator

Thank you. Our next question comes from Jason McCarthy with Maxim Group. Your line is open.

Michael Okunewitch

This is Michael Okunewitch on the line for Jason McCarthy. Thank you for taking my questions, today. So I guess to start off, I’d just like to see if you could provide a bit of commentary on why you think we’re seeing some stronger tracks in terms of Spravato? Is this owing largely to greater acceptance of interventional approaches, the maturing delivery infrastructure or the maturing reimbursement environment? I’d just like to see if I can get your take on that.

Kabir Nath

I think all three, will be frankly the answer. And I think a couple of things. All of those are relevant. Growth of infrastructure, increasing acceptance by psychiatrists and other health care providers as well as, I think, what is a broadly favorable reimbursement landscape for Spravato.

I think the other element though is that acceptance is actually driven by the results that people are seeing and the fact that results typically seem to be stronger than they perhaps were in the clinical trial. So what was seen as marginal efficacy in the trial has actually translated into better results in the real world and greater stickiness that’s the additional factor, I would add.

Guy Goodwin

I think the clinical experience certainly that I had with esketamine in the past is just the speed of response and the completeness of the response. That is very, very striking to clinicians. And I think one scene, you don’t really forget it. And I think that’s the impact. [Indiscernible] don’t really capture it. When you see the patients live, you get a sense of their recovery and their joy to be relieved of their symptoms. That’s very special, and that drives the uptake of these fast-acting drugs.

Michael Okunewitch

All right. Yes. Thank you for that. And then just one more kind of a housekeeping question, and I’ll hop back in the queue. I’d just like to see if you could remind us how much remains on your ATM?

Mike Falvey

Sure. So the full ATM was $150 million. And since inception, we raised about $28 million. So that would be about $122 remaining.

Michael Okunewitch

All right. Thank you for that. And congratulations on the progress this quarter.

Kabir Nath

Thanks, Mike.

Mike Falvey

Thank you.

Operator

Thank you. There are no further questions. I’d like to turn the call back over to management for any closing remarks.

Kabir Nath

Thanks very much. So thank you, everyone, for your participation on today’s call. As you heard and came through the question, this has been a strong quarter for us. Excellent progress in terms of the Phase III trials being underway, a fair amount of interesting new clinical data being published. Also, the significant moves we have made to extend our financial runway through both the use of the ATM and signing the debt facility with Hercules. So we’re in a strong position going forward with a strong balance sheet, and we’ll look forward to reporting back to you on continued progress in the next quarter.

Thanks very much all for your time today.

Operator

Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.