The pharmaceutical executive Kabir Nath left a secure position at a traditional drug company in 2022 to take the helm of Compass Pathways, a firm holding a patent on a synthetic formulation of psilocybin aimed at treatment-resistant depression. Nath, whose father died by suicide, accepted the offer on a second pitch, becoming one of the earliest senior executives from traditional pharma to transition into the psychedelic drug sector. That personal and professional gamble now approaches a critical juncture as the company finishes assembling its final paperwork ahead of a potential Food and Drug Administration decision as early as next year.
The stakes for the Jersey City-based company are substantial. Compass has recently expanded its payroll with 150 new hires, scaled up its marketing division, and established new office space equipped with a lime green interior design. However, the commercial future of its flagship product, a psilocybin pill designated COMP360, hinges entirely on regulatory approval. While a Johnson & Johnson subsidiary secured FDA approval for a ketamine-derived depression treatment in 2019, regulatory clearance for a traditional psychedelic remains uncertain. A denial from federal regulators would likely trigger a rapid sell-off by investors and drive the company toward bankruptcy, leaving its newly established offices untenable.
According to Nath, a negative outcome would also affect an estimated 4 million patients across the United States suffering from depression who have found no relief through conventional medications such as selective serotonin reuptake inhibitors. Like many single-product biotechnology firms, Compass stock has experienced significant volatility through successive clinical trials. When markets closed on a recent Friday, shares traded near $11, marking an increase of $5 from the previous year, though still below the $17 public offering price in 2020.
The path of psilocybin from counterculture experimentation to regulated medical research spans decades. Public awareness surged in the 1960s largely through figures such as Harvard professor Timothy Leary, who famously urged students in a 1962 Cambridge campus speech to experience an internal rebirth through the substance. Leary’s subsequent departure from the university coincided with widespread recreational use across the United States. Academic research into psychedelics flourished during the same decade before halting abruptly in 1970, when psilocybin was classified as a Schedule I controlled substance, rendering possession illegal even for scientific inquiry. Academic work remained stalled until 2000, when federal regulators granted researchers at Johns Hopkins University permission to resume psilocybin studies. More recently, psychedelic experimentation gained popularity within technology circles, with various industry leaders attributing personal creativity and stress relief to the practice, alongside a broader biotech boom between 2018 and 2022 that saw hundreds of psychedelic enterprises go public.
Compass received breakthrough therapy designation for its proprietary psilocybin formulation from the FDA in 2018, the same year Nath led a team at Otsuka investigating potential psychedelic medicines after reading Michael Pollan’s book exploring the history and therapeutic potential of psychedelics. The clinical administration process for COMP360 differs markedly from recreational use. Patients must first meet the clinical definition of treatment-resistant depression, meaning at least two standard medications have failed to produce results. A clinician then explains the procedure before administering the pill in a controlled environment.
The treatment setting consists of a quiet room furnished with a couch, where patients are typically offered a blindfold. Soft background music featuring classical and new age compositions plays while a clinician—comprising a nurse, doctor, or therapist—remains in the room for safety and conversational availability, though minimal talking occurs during the six-hour session. Nath emphasizes that the procedure is not psychotherapy and clinicians do not direct the patient’s internal experience. Following the session, patients return home.
In Compass’s most recent clinical trial, results published in September indicated that slightly under half of participating patients achieved at least a 50% reduction in depressive symptoms within six weeks of treatment. Having completed animal and human trials spanning a decade, the company is finalizing its submissions.
An FDA spokesperson stated that the agency evaluates experimental medications, including psychedelic drugs, through a rigorous, evidence-based process to ensure treatments are safe and effective for their indicated uses. Compass is not alone in the regulatory pipeline; competitor AtaiBeckley trades on the Nasdaq while developing a nasal spray formulation of DMT that earned breakthrough status in 2025.
With an FDA decision anticipated as soon as the first half of next year, Compass is preparing its sales infrastructure and communicating with healthcare providers regarding clinical administration models. Psychiatrists have expressed enthusiasm regarding the potential rapidity and durability of the treatment.
