When a company is developing a novel therapy, sometimes good news takes an unusual form. For Compass Pathways, (NASDAQ: CMPS) whose COMP360 program aims to address treatment-resistant depression (TRD) with a combination of psilocybin and clinician-led psychological support, that's doubly true.

So when it reported some unexpected and positive data from an exploratory phase 2 clinical study on July 17, it's no surprise its shares jumped more than 6%. Let's take a moment to digest what the study found, and why it's yet another green flag for this biotech's future.

Psychedelic therapies for treatment-resistant depression like COMP360 don't work via precisely the same biological mechanisms as first-line antidepressant medications, which are selective serotonin reuptake inhibitors (SSRIs). That's part of the reason why they may be a more effective treatment. But it's also a bit of a problem. 

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Source Fool.com