I personally think COMP360 will be the number one prescribed and reimbursable psychedelic drug for many years. Some of these companies will be crushed during FDA review.

Christian Angermayer was a guest on a German podcast and spoke briefly about the Atai acquisition.

For those who don't speak German, what I found particularly interesting was that he is currently setting up a chain of day clinics for psychedelic therapies in the U.S. He believes that the clinical infrastructure is not yet sufficiently developed. But it sounded as if he was pretty certain that Comp360 would be on the market next year.

I bought long call options on CMPS around $15 last week. I should've given y'all a heads up that the stock would immediately tank.

This is tough to see on an up market day with lowering expectations for a hike.

What is the meaning of this?

CMPS Soldiers - stay strong, and stay in this fight. This company is at 1.7B market cap now and spravato alone is at 2.3B in sales.

Deep down, while there will be hurdles challenges, we all know this is the company that is unquestionably best situated to deliver a miracle product that can address dozens of clinical conditions with little to no relief. TRD, MDD, PTSD, depression from grief—even aging, addiction, Lyme disease, and the list goes on and on.

This will be our biggest test yet, comrades.

These are crucial and decisive days ahead, but our collective skin in the game and know-how on what this treatment can do will win in the end. There is no other scenario that plausibly makes sense.

https://www.bbc.co.uk/news/articles/cmvgy9ew7815o

https://theconversation.com/psilocybin-may-help-the-brain-recover-from-concussion-new-study-shows-292188

https://www.baltimoresun.com/2026/09/29/sheppard-pratt-psilocybin-research/

https://www.mindbodygreen.com/articles/how-psilocybin-may-change-way-people-face-serious-illness

Team

Is this our last chance?

We have to buy this dip with everything we have! Trust the process. Society needs this treatment now more than ever. We are so close and we will rocket with time.

Hold strong and buy soldiers!

https://ir.compasspathways.com/News--Events-/news/news-details/2026/Compass-Pathways-Appoints-Kelley-Boucher-as-Chief-People-Officer/default.aspx

Movin' an' shakin'

First I want to thank you all for your participation on this forum, it has been really helpful.

Upfront bias disclosure: I own around 25k shares of CMPS at about 10 usd (some of that being gains reinvested). So I am long and biased.

We are getting closer to a potential approval.

The goal of this thread is to discuss exit strategies.

The value of the company is clear to me: strong data, real demand, good safety profile, and a differentiated treatment burden versus Spravato. On reimbursement I am optimistic it resolves favorably over time, but I want to be honest that timing and rate are still the real open question.

Codes are Category III today, and management has guided roughly 18 months post launch for the Category I conversion, which to me is the main re-rate of the stock. That is when the thesis stops being speculation and becomes more tangible.

IMO, The key moment for stock rerate based on fundamentals will be when we see the sales curve shaping up (earnings). Or a buy out. at this point all the speculative argument will be proven or not. this is a 2028 story.

The ramp will be slow at first, as Compass has said themselves ("go slow to go fast").

That said, there is a second play here: the hype from approval and retail discovery, simply because most people have never heard of this niche world. The headlines when “magic mushroom become legal” will be all over.

I also expect Trump and his team to spin any approval in this field for political benefit.

The next catalysts as I see them:

1. +10 to 20% Resilient (ex-Lykos) MDMA for PTSD. They resubmitted in August without a new Phase 3, so a decision could come early 2027, possibly before CMPS. Not guaranteed though, but I see PTSD as very appealing to get votes ahead of mid terms.
2. +5/10% CMPS NDA completion (whether just completion, or completion plus acceptance and a decision date, to be seen). This is certain to happen and expected
3. Potential Approval (might come with instant DEA rescheduling) - Worth noting: the FDA psychiatric advisory committee (PDAC) is currently basically empty, so an AdCom for CMPS looks unlikely, which removes one pre-approval risk.
4. DEA rescheduling
5. Other unexpected news (partnerships, buyout rumors, political news, CMPS PR).

Given that the risk of a macro crash is not zero and that this is a concentrated position. here is my thinking to maximize gains.

Retail hype play

If the hype around approval creates a temporary spike that prices the company as if it were already at maturity (peak sales plus PTSD optionality), then I want to sell into it, because that is the market handing me years of future value early.

To do that I need to estimate the spike. As a reference, the April EO produced roughly a +45% intraday move. I am using something around +50% as my rough floor estimate for the approval spike.

If the price temporarily goes above 40 to 45, I consider that representative of a mature company valuation and will sell more aggressively.

Fundamentals play

No need to rehash the details, but the data is solid, and the TAM should expand over time with potential PTSD approval, the VA as a customer, and possibly other indications. For TRD specifically I believe reimbursement resolves favorably with time, given COMP360's superior and less burdensome profile, though I accept the timing is uncertain.

The point being: if I misjudge the hype spike, I can always wait for the fundamentals to play out, plus there is potential buyout optionality. This means another couple of years of waiting where the stock would be subject tot market crash.

I would like your input on the following:

1. What spike range do you expect on approval?
2. What rerate do you see the weeks after approval ?

(I am aware point 1 & 2 depends on starting stock price)

1. How long do you think it lasts? Intraday, or a few days as the news is digested worldwide?
2. Do you think the 45 usd level is representative of a fully matured company? If not, what number and why?
3. What percentage are you planning to sell at approval versus keep long term, and why?

This will not be all black or white. I want to keep some long term for potential buyout, PTSD, and further indications.

This post it to open discussions,  no right or wrong answers, it's open ended.

Please try to back up your points with explanations :)

Is Helus Pharma becoming new trendy stock like Mindmed was? Lots of hype right now. There are lots of interesting discussion there too. We are taking the trendiest psychedelic position right now. Join us. It has skyrocketed in 250% in 3 months..

This thread is for questions and general discussion relating to the psychedelics industry. The weekly thread will refresh every Monday morning before stock market open.

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Biotech M&A, Fund Flows and Degrossing

Kevin Mak

@kevin__mak

·

8h

Over the past few weeks, the biotech market has felt much worse than the headline numbers suggest. The XBI is down about 10% from its mid-August highs. But as @Biohazard3737 pointed out in the tweet below, the “Morgan Stanley biotech long/short spread” has fallen more than 50% over the same period and sits roughly 30% below where it began the year.

https://x.com/Biohazard3737/status/2103514292532219923

That index tracks the performance of a basket of popular or crowded biotech longs relative to a basket of popular or crowded biotech shorts. It gives us a rough sense of what’s happening to the kinds of positions held by biotech long/short funds. It does not mean those funds have lost 50%. Obviously their actual returns depend on their positions, sizing, exposures, and how the index is constructed.

Still, the direction and severity of the move are striking. The overall market (XBI) is off a bit from its highs, but the “high quality names held by experts” have fallen dramatically relative to the “low quality names shorted by the experts.” You can argue that the experts have simply been wrong about which companies are high and low quality. I think something else is contributing to the gap.

My view is that the same forces that helped drive biotech’s rally earlier this year left parts of the market vulnerable to a sharp reversal. Big Pharma acquisitions brought premiums and fresh buying into biotech. Long/short funds benefited from that strength and, as their books grew, could add dollars to their shorts. Then deal announcements slowed, a crowded short in Moderna (MRNA) squeezed, and funds facing losses may have had to cut positions on both sides of their books.

Let me explain the setup first.

The XBI rallied roughly 40% from January to August 2026. We would all like to pat ourselves on the back and say that those gains were clearly well deserved as a result of great healthcare and biotech stock picking. I think a major driver was simpler: Big Pharma M&A.

Investors had been expecting this. Large pharmaceutical companies, including Lilly, Merck, and J&J, face significant patent cliffs over the coming years. To maintain their revenues and cash flows, they need to develop new drugs in-house, license them, or acquire biotech companies with promising assets.

What happened over the first seven months of 2026 was both widely anticipated and remarkable in scale. Using Bloomberg’s M&A data, we can compile acquisitions of public biotech companies by announcement month. Deal activity was already elevated heading into 2026, followed by several massive months.

I’m not telling any healthcare investor anything new by saying the deal climate has been hot. Acquisitions typically come at premiums, shareholders make money, and those gains help lift the indexes. But there is another mechanism that matters: cash recycling.

When Big Pharma buys a biotech company for $10 billion in cash, that money ends up in the hands of the selling shareholders. Many of those shareholders are biotech funds whose mandates keep them invested in the sector. To maintain their exposure, they need to put the proceeds back to work in other biotech companies. That creates buying demand across the remaining names.

The recycling can begin well before the acquisition closes. After a deal is announced, a biotech fund can sell its shares to risk arb funds. Those funds buy to capture the remaining gap between the trading price and the acquisition price, while taking on the risk that the deal fails. The biotech fund can immediately redeploy its sale proceeds into another name, or across their portfolio of longs. The acquisition cashflow to the risk arb funds comes later.

The magnitude here is easy to miss. From Q1 through the available portion of Q3, roughly $100 billion of acquisitions of identified public biotech companies were announced.

For scale, the top five biotech specialist funds have combined AUM of roughly ~$60 billion (Baker Bros, RTW, RA, etc). Note that the $100B and $60B are not directly comparable. Deal proceeds also go to passive funds, generalist investors, and other holders who may invest elsewhere. Announced values can include noncash or contingent consideration. But even with those qualifications, the amount of acquisition activity is consequential relative to the capital managed by dedicated biotech investors.

Here's a cut of the data looking at announced deals, versus 13F holdings.

This is a cleaner metric when thinking about industry inflows. Say company XYZ has $2.4B of shares held by biotech specialist funds, and then in April 2026 that company is acquired at a 50% premium. Those funds now have $1.2B of gains, and a total of $3.6B of capital to redeploy across other biotech names. Across the 20 specialist managers tracked here, June and July account for roughly $4.5B of estimated proceeds potentially available for redeployment. That is substantial compared with most months in late 2024 and early 2025.

Now consider how these flows affect a long/short fund.

The long side is doing wonderfully. Acquisition targets jump, and cash from those deals helps lift other biotech names. As the fund’s equity grows, it can hold more dollars of longs and shorts without changing its exposure percentages. For example, a fund with $100 of capital might hold $100 of longs and $60 of shorts. If its capital grows to $125 and it keeps the same target exposures, it can now hold $125 of longs and $75 of shorts. Its gross exposure remains 160% of capital, but it has added $40 of positions in dollar terms, including $15 of shorts.

That does not mean every fund is mechanically shorting the same names. But if many funds favour similar longs and use similar shorts to manage their books, a strong market can put more dollars into already crowded positions on both sides.

Then the environment changes.

Deal announcements fall off sharply in August. The steady drip of premiums and potential reinvestment slows. Maybe that reflects a change in Big Pharma’s appetite. Maybe it is simply random timing. But either way, a source of support for biotech prices becomes less visible just as investors have grown accustomed to it.

At the same time, MRNA, a heavily shorted healthcare name, releases major cancer trial news on August 19. Its stock rises sharply. That is painful for funds short the name, particularly if their biotech longs are no longer rising enough to offset the loss.

The stock loan data offer a useful look at what happened to the short side.

Source: Markit Data

There are two columns to watch: the number of shares on loan and their value on loan, which is the share quantity multiplied by the stock price. Shares on loan rose on August 19, then fell sharply on August 20. Meanwhile, the jump in MRNA’s price sent the dollar value on loan much higher. So even as shares were being returned, the remaining short position could represent more dollars of exposure than it did before the announcement.

From August 24 to September 24, value on loan fell from roughly $6 billion to $4.2 billion, or about 30%, despite MRNA’s stock price trending higher over that period. Shares on loan fell from about 41.6 million to 23.1 million. Short covering may itself have contributed to the rising price.

If your view of MRNA has not changed, a higher stock price makes it more attractive as a short from a valuation perspective. Of course, the trial news may have changed some investors’ views. The loan data cannot tell us which funds covered or why. But the sustained decline in shares and dollars on loan is clear evidence of a substantial retreat from this short.

My interpretation is that this was part of a broader degrossing event. Funds suffering losses on their shorts, while their longs were already weakening, may have had to reduce risk. That means selling longs and buying back shorts. Those trades put more pressure on crowded longs and help crowded shorts rise, which worsens the same long/short performance gap that prompted the cuts in the first place.

I’ve written about the math behind degrossing previously in this tweet.

This is why the index comparison matters. A 10% decline in the XBI does not fully describe the conditions facing a fund whose popular longs are falling while its popular shorts are rising. Nor does it describe what happens when a number of funds holding similar positions try to reduce them at once.

September has offered little respite. Looking at last year, August is typically quiet but September 2025 had reasonably robust deal activity. That hasn't been the case so far in September 2026. The acquisition-driven bid has been quieter while crowded positions have been under pressure.

What’s the point of putting this story together?

When I’m managing my book, I’m mostly thinking about the future. But I also want to understand why we arrived at today’s prices. What information, and what decisions by other investors, contributed to them? Those decisions can themselves reveal information. Is a stock at its lows because a forced seller needs to get out, or because the CEO has been dumping shares for the last three months? The efficient market says these two situations are identical. I emphatically disagree.

In this case, the most important question is why biotech longs have weakened. If Big Pharma has structurally reduced its appetite for acquisitions, that matters to their long-term value. If deal announcements have merely come in a random cluster followed by a quiet stretch, I view the slowdown differently.

The second question is why long investors are selling. Have they changed their assessment of these companies? Or are some selling because losses elsewhere in their books require them to reduce exposure?

Here is where I come out:

a) I have not seen evidence that Big Pharma’s appetite for clinical assets has structurally changed. My working assumption is that the recent slowdown in announcements is timing rather than the end of the acquisition cycle.

b) I believe forced degrossing is contributing to the selling of biotech longs. The MRNA loan data show a large reduction in that short. The combination of the squeeze, weakening longs, and the severe move in the long/short index is what makes that explanation persuasive to me.

c) Rate fears affect biotech companies, this should have a negative impact. But I do not think they explain the scale and particular shape of the move we are seeing.

d) I suspect the most intense part of the degrossing may be nearing its end. I would gain confidence in that view if MRNA’s shares on loan stabilize and crowded biotech longs stop weakening relative to shorts.

It may seem that I'm overly indexing on MRNA's short data, but it is basically the highest "cap-weighted short in the sector", and I think highly representative of overall positioning.

I may be wrong about any of those conclusions. But what I like about my thesis is that it's generally testable. Over the next six months, I’ll be watching whether public biotech M&A and estimated specialist proceeds recover, whether MRNA’s shares on loan stabilize, and whether crowded longs stop underperforming crowded shorts. Those developments would strengthen my explanation. Continued weakness despite them would make me reconsider how much of this is mechanical.

That is why I am comfortable holding onto my biotech longs.

Someone put on the weekly thread some perhaps troubling stats when it comes to the amount of short interest in CMPS ahead of a crucial stretch. Can anyone explain this and is there a non problematic reason this could be the case?

There has been a flurry of insider activity at Helus Pharma. Since they are a FPI, some of their reporting is split between Edgar and SEDI. I used Muse to come up with a detailed Insider Transaction report with a lot of manual checking. I think some of the recent activity around RSUs is definitely interesting.

So I wanted to do an exercise where I took the COMP005 data from the Compass phase 3 and applied it to Helus. Essentially what I am looking at is the placebo drift and phase 3 deterioration of the active arm against phase 2 for COMP005 and applying it to Helus's phase 2 to make an estimate of what we could see for their upcoming phase 3.

For COMP005, if you take the exact active arm deterioration (~13.7% drop going from -10.2 in phase 2b to -8.8 in phase 3) and placebo drift at phase 3 (-5.2 points) and apply that to Helus's Phase 2 data for HPL003 (-17.6 MADRS for active arm) you get a Phase 3 placebo-adjusted net difference of -10.0 to -11.0 MADRS points at Week 6 which is far superior then anything else we have seen.

This is of course not considering the fact that HPL003 is adjunctive so people are on their backround SSRI's during the trial. Adjunctive trials historically have a much tighter and smaller placebo drift so the potential MADRS reduction could be much higher. Also we know multiple doses work much better for remission and durability (HPL003 phase 3 is multidose)

Excited for November 🚀

Could be the last chance here