Why Compass Pathways Shares Are Slumping More Than 22% Tuesday

Compass Pathways (NASDAQ: CMPS) saw its shares drop more than 22% on Tuesday. The biotech stock, which focuses on mental health treatment, closed at $43.06 on Monday, opened at $40.65 on Tuesday and fell as low as $30.52 in midday trading. The stock, which is down more than 6.5% for the year, has been as high as $61.69 and as low as $28.58 over the past 52 weeks.

Two announcements by the company weighed on the stock price, though ironically, both were mostly positive.

The first was related to its lead therapy for treatment-resistant depression. The company, which had its IPO last year, said its phase IIB clinical trial of its COMP360 psilocybin therapy for depression showed that at its highest dosage (25mg), COMP360 found a reduction in depressive symptoms after three weeks. The drug's primary ingredient, psilocybin, is the active molecule in so-called psychedelic magic mushrooms.

Source Fool.com