First Psychedelic Drug Stock Hits $1 Billion In Debut After Upsized IPO

Compass Pathways (CMPS) jumped in its first day of trading on Friday, making it the first psychedelic drug company to go public on a big U.S. exchange.

Shares surged 70.6% to close at 29.00 in the stock market today, lifting the market cap to about $1 billion. The debut comes a day after Compass Pathways announced an upsized pricing for its IPO. It has backing from billionaire investor and PayPal (PYPL) cofounder Peter Thiel.

The London-based company, which is researching a therapy using the main ingredient in hallucinogenic mushrooms, said in a release late Thursday that its IPO priced at $17 a share. That was up from initial expectations for $14-$16 announced earlier in the week, putting the valuation at about $544 million.

Compass said it sold 7.5 million American Depositary Shares in the offering, for total proceeds of $127.5 million. That was also above the 6.7 million planned. Each of the 7.5 million American Depositary Shares represented 7.5 ordinary shares in the offering.

The company has also granted the underwriters of its IPO a 30-day option to buy an additional 1,125,000 American Depositary Shares, up from 1,005,000 initially.

Compass, in a filing on Monday, said would have around 34 million shares outstanding after the offering, or 35 million if the underwriters fully exercise the option.


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