In 2022, Kabir Nath had a cushy executive job at a pharmaceutical firm that developed anti-psychotic medication.
Then he got a call from a scrappy upstart with a patent on a synthetic version of psilocybin — the active ingredient in magic mushrooms. It hoped to use the compound to help those with treatment-resistant depression.
They wanted him to join as CEO. Nath, whose father died by suicide, bit on their second pitch.
“A number of people have said to me in the last couple of years: ‘You do realize what a risk that was,'” Nath told Business Insider about eventually jumping ship for what was, and still is, a drug company without FDA approval for its product.
“I was probably the first really senior executive from traditional pharma to make the move to psychedelics,” he added. “But, you know, it was the right thing to do.”
Nath’s personal risk is now magnified as Compass Pathways finishes filing its final forms ahead of what could be FDA approval as soon as next year, and then a public rollout of its psilocybin pill, called COMP360.
Compass has recently added 150 new hires to its payroll, expanded its marketing division, and moved into new office space in Jersey City in the hope it all works out. “The company is growing rapidly,” Nath said.
Though a subsidiary of Johnson and Johnson attained FDA approval with a version of ketamine for depression patients in 2019, it is by no means guaranteed that Compass, leveraging a more traditional psychedelic, will get the same approval.
Should the FDA deny Compass’ bid, investors would rush to dump their shares, likely sending the company into bankruptcy. The Jersey City office, which just received a new lime green paint job, would be untenable.
If you ask Nath, it would also be bad news for 4 million patients with depression in the US, for whom more traditional antidepressants like SSRIs don’t work.
“These are people who have been suffering from depression, and nothing’s really working,” he said.
Like other drug companies — especially those with a single product — Compass’ stock has “been on quite the adventure,” Nath said, as the company progressed through various human trials.
When markets closed on Friday, the share price hovered around $11, up $5 from last year. In 2020, when the company went public, shares went for $17.
From Haight Ashbury to Wall Street
Scott Semler for BI
Psilocybin’s journey to the forefront of medical research didn’t begin with Compass, and it hasn’t exactly gone in a straight line.
Few did more to publicize the drug than Timothy Leary, the Harvard professor turned acid dropout. In a speech at Harvard’s Cambridge campus in 1962, he told students that taking psilocybin allows people to experience an “internal rebirth,” according to the Harvard Crimson.
In time, Leary would be fired from Harvard as he, along with a measurable portion of the US population, began to experiment more heavily with psychedelic drugs. Come 1966, the Grateful Dead were spiking their Kool-Aid with acid, and a definitive subculture of long-haired, psychedelic-taking hippies had emerged.
Meanwhile, researchers were experimenting too. Studies involving LSD and psilocybin flourished during the 1960s before hitting a brick wall in 1970, when psilocybin was classified as a Schedule I substance, rendering possession illegal, even for research purposes.
Work on the drug languished for years, until 2000, when the FDA gave scientists at Johns Hopkins University permission to conduct research on psilocybin.
And more recently, psychedelics have become trendy with the tech crowd.
From Burning Man to luxury retreats, experimenting with psychedelics is now common among tech founders and executives like Elon Musk and Sam Altman, who credit the drugs with quieting their nerves, boosting productivity, and allowing them to better harness their creativity.
Research, too, has flourished.
“There was actually a biotech boom from 2018 through to about 2022,” Nath said. “In that boom, literally hundreds of psychedelic companies went public.”
In 2018, Compass’ proprietary psilocybin formulation received breakthrough therapy designation from the FDA. A few years later, it started testing the drug on people.
Nath was an executive in 2018 at Japanese pharmaceutical giant Otsuka, where he said he assembled a team to investigate whether psychedelics could become viable medicines after reading Michael Pollan’s book “How to Change Your Mind,” which explores the history and therapeutic potential of psychedelics.
COMP360
Compass isn’t selling an experience analogous to a spiritual awakening at Burning Man, though.
The drug-taking process for a patient enrolled in one of Compass’ trials is a bit different. First, a patient has to have treatment-resistant depression, which is clinically defined as depression that two or more standard drugs have failed to treat.
Then, a clinician explains the details of the process that is about to unfold. After that, they’re given the psilocybin in pill form.
Scott Semler for BI
“It’s a quiet room with a couch,” Nath said. “They’re offered a blindfold, which most patients do actually wear.”
As the patient begins to trip, a playlist of music, including classical and new age, plays softly in the background. The clinician, who Nath said could be a nurse, doctor, or therapist, sits silently in the room if the patient wants to talk, and for safety reasons.
Most of the time, though, there isn’t any talking.
“This is not psychotherapy,” Nath said. “We are not directing the patient’s experience.”
Six hours later, after some crying, laughing, and everything in between, the patient goes home.
In Compass’s most recent trial, results for which were published in September, just under half of participants who took the drug experienced at least a 50% reduction in depressive symptoms within six weeks of treatment.
Next steps
After a decade of slogging through tests, first on animals and then on humans, Compass has completed all the necessary prerequisites and is busily working to get its last papers in order.
In a statement provided to Business Insider, an FDA spokesperson was noncommittal, though.
“The FDA evaluates experimental medications, including psychedelic drugs like psilocybin, through a rigorous, evidence-based process designed to ensure that any approved treatment is safe and effective for the indicated use,” the spokesperson said.
Compass isn’t the only psychedelic drug company wading through the lengthy process of trialing a drug.
AtaiBeckley, another psychedelic drug company trading on the Nasdaq whose product is not yet approved by the FDA, is developing a version of DMT administered via nasal spray. It received breakthrough status in 2025, years behind Compass.
For Compass, though, it could face the music as soon as the first half of next year, when it expects the FDA to render its decision. The company is already getting ready.
In addition to adding 150 new hires, Nath said the company is preparing its sales force to go online and is in frequent communication with doctors and healthcare providers about operating in clinics where therapists can administer the drug to patients.
“This has the potential to be radically different, and again, the rapidity is something that they’re very excited about, and the durability,” Nath said, referring to psychiatrists.
