Why COMPASS Pathways Mushroomed Almost 20% Today

What happened

Shares of biotech start-up COMPASS Pathways (NASDAQ: CMPS) weren't doing much of anything during this trading day until around 2:30 p.m., when they shot up 17%. Shares then settled back to close up 12% on the day.

Credit the popularity of CNBC for the move, as chairman, co-founder, and chief executive officer (CEO) George Goldsmith was on to tell his company's story, causing the jump.

So what

The company went public one month ago with an initial public offering (IPO) priced at $17 per share, and closed today's session at $38.39 after today's move. CEO Goldsmith went on CNBC this afternoon to discuss the company's psychoactive treatment for depression.

psychedelic mushrooms against a black background

Image source: Getty Images.

He discussed the company's approach to transforming mental healthcare, using psilocybin, the active ingredient in psychedelic, or "magic" mushrooms.

Now what

The company is currently in Phase 2b of its clinical trials, where the efficacy of the treatment is tested. Goldsmith also noted that the treatment has received breakthrough therapy designation from the U.S. Food & Drug Administration (FDA), allowing it to expedite the development and review of the therapy.

In addition to the U.S., the UK-based company is doing clinical trials in eight other countries. The company expects to complete and report on its Phase 2b trials at the end of 2021, Goldsmith said in the interview.

COMPASS initially plans to use its psilocybin therapy for patients with treatment-resistant depression, anxiety, addiction and other mental illnesses. The treatment combines the use of the psychoactive substance with trained therapist psychological support.

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