COMPASS Pathways plc, a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health, announced that the Company has entered into a term loan agreement with Hercules Capital, for up to $50 million.
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Kabir Nath, COMPASS Pathways Chief Executive Officer said, “COMPASS is pleased to partner with Hercules for this source of non-dilutive financing to support our COMP360 phase 3 program in treatment-resistant depression, with initial data expected in the summer of 2024. Together with proceeds from our ATM facility reported in May, this facility further strengthens our balance sheet and lengthens our cash runway. Most importantly, this supports our plans to deliver new options to patients suffering with treatment-resistant depression as soon as possible.”
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Under the terms of the agreement, COMPASS drew an initial $30 million at closing on June 30, 2023. An additional $20 million becomes available in two tranches of up to $10 million each. The first of these tranches is available the earlier of (a) 30 days following achievement of certain performance milestones and (b) until December 15, 2024. The second tranche is available during the interest-only period, subject to the lender’s approval. Even if such tranches become available, the Company is under no obligation to draw funds in the future. Additional details of the loan agreement are filed with the Securities and Exchange Commission on a Current Report on Form 8-K filed on July 5, 2023.
“Hercules is pleased to enter into a strategic relationship with COMPASS Pathways as it advances its clinical stage programs,” stated Bryan Jadot, Senior Managing Director and Life Sciences Group Head at Hercules Capital.
Armentum Partners acted as the Company’s exclusive financial advisor on this transaction. Legal counsel was provided by Goodwin Procter and Morrison Foerster.
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