Perhaps it was an old urban myth, but everyone used to say that if the cops bust you with mushrooms, just dump them on the floor of your car. As long as they’re not in baggies, you’re cool. We’ve not sure if that’s sound advice or not, but soon it may be a moot point. That’s because mushrooms – and psychedelics in general – are quickly becoming recognized for their therapeutic powers.
In last year’s piece on 7 Psychedelic Therapy Companies Addressing Mental Health, we briefly covered a company called Compass Pathways (CMPS) that’s looking to create psilocybin therapeutics. Given the significant level of interest we’ve seen from investors surrounding this topic, we’re going to take a closer look at Compass Pathways stock.
About Compass Pathways Stock
Founded in 2016, Compass Pathways is located on the outskirts of Karl Pilkington’s stomping grounds – Manchester, England – where the company managed to raise just over $116 million in funding from around a dozen investors including Peter Thiel before going public. All that money has being put towards developing “a proprietary, high-purity polymorphic crystalline formulation of psilocybin,” and then turning it into a therapeutic that can address a severe form of depression known as treatment-resistant depression (TRD).
ATAI Sciences and Compass Pathways
In our recent piece on The Psychedelic Therapy Company Treating Mental Health, we talked about how ATAI Sciences acts as a holding company with all kinds of ventures afoot in the area of psychedelic therapeutics. One of the founders of ATAI, Lars Christian Wilde, is also a co-founder of Compass. The most recent SEC filing document – a 424b4 filed in September of 2020 – talks about how ATAI owns 23.43% of Compass Pathways. It also goes on to say:
In addition, our Chief Executive Officer, Co-Founder and Chairman of our board of directors, George Goldsmith, and our Chief Innovation Officer, Co-Founder and Director, Ekaterina Malievskaia, who are married, together hold a 7.4% equity interest in ATAI, and our President, Chief Business Officer and Co-Founder, Lars Christian Wilde, who was a Co-Founder of ATAI, may in the future receive up to a 5% equity interest in ATAI.
Credit: Compass Pathways 424b
There are a few governance red flags here. The first concerns companies where the CEO also holds the position of Chairman of the Board of Directors (BoD). Since the BoD is typically the CEO’s boss, it’s like discussing your employee’s performance review with your boss while said employee is sitting in the room listening and commenting. The second concern is the conflict of interest in having two key members of management in a marital relationship. Any HR policy would frown on this practice for the same reason they don’t let the management team fly on the same flight.
At any rate, let’s assume they’re appropriately managing…