Compass Therapeutics, Inc. (NASDAQ:CMPX) is a clinical-stage, oncology-focused biopharmaceutical company developing proprietary antibody-based therapeutics to treat multiple human diseases. The company's scientific focus is on the relationship between angiogenesis, the immune system, and tumor growth. Compass' pipeline of novel product candidates is designed to target multiple critical biological pathways required for an effective anti-tumor response.

Business Overview

Compass Therapeutics is currently advancing three product candidates in the clinical stage of development: CTX-009, CTX-471, and CTX-8371.

CTX-009

is an investigational bispecific antibody that is designed to simultaneously block DLL4 and VEGF-A signaling pathways, which are critical to angiogenesis and tumor vascularization. Preclinical and early clinical data of CTX-009 as a monotherapy and in combination with chemotherapy suggest that blockade of both pathways provides robust anti-tumor activity across several solid tumors, including colorectal, gastric, cholangiocarcinoma, pancreatic and non-small cell lung cancer.

The company is currently conducting a Phase 2 monotherapy clinical trial of CTX-009 in patients with metastatic colorectal cancer who have received two or three prior systemic therapies. Additionally, Compass is conducting a randomized Phase 2/3 trial for CTX-009 in combination with paclitaxel in adult patients with unresectable, advanced, metastatic or recurrent biliary tract cancers who have received one prior systemic chemotherapy regimen.

CTX-471

, Compass' monoclonal antibody product candidate, is a fully human, IgG4 monoclonal antibody that is an agonist of CD137, a key co-stimulatory receptor on immune cells. Binding of CTX-471 to CD137 has been observed to lead to ligand-stimulated activation of T-cells and NK cells, resulting in extensive reprogramming of the tumor microenvironment. Compass is currently evaluating CTX-471 in a Phase 1b clinical trial in combination with pembrolizumab in patients with advanced solid tumors.

Compass' third clinical-stage product candidate,

CTX-8371

, is a bispecific antibody that binds to both PD-1 and PD-L1, the targets of well-known and widely used checkpoint inhibitor antibodies. Preclinical studies have demonstrated that CTX-8371 has the ability to outperform PD-1, PD-L1, and combinations of the two to activate T-cells in in vitro assays. An IND for CTX-8371 was accepted and cleared by the FDA in October 2023, and the first patient was dosed in April 2024.

Financials

For the fiscal year ended December 31, 2023, Compass Therapeutics reported an annual net loss of $42.5 million, with no revenue generated. The company's annual operating cash flow was -$40.6 million, and its annual free cash flow was -$40.6 million.

In the first quarter of 2024, Compass reported a net loss of $10.8 million, with no revenue generated. The company's operating cash flow for the quarter was -$13.9 million, and its free cash flow was also -$13.9 million.

As of March 31, 2024, Compass Therapeutics had $156 million in cash, cash equivalents, and marketable securities, which the company believes will enable it to fund its operating expenses and capital expenditure requirements into late 2026.

Liquidity

Compass Therapeutics has funded its operations primarily with proceeds from the sale of its equity securities. Through March 31, 2024, the company has received $430 million in gross proceeds from the sale of equity securities.

In the first quarter of 2024, Compass sold 9,790,577 shares of common stock through its at-the-market (ATM) agreement with Jefferies LLC, raising $18.1 million in gross proceeds and $17.6 million in net proceeds. The company believes that its existing cash, cash equivalents, and marketable securities will enable it to fund its operating expenses and capital expenditure requirements into late 2026.

Risks and Challenges

As a clinical-stage biopharmaceutical company, Compass Therapeutics faces several risks and challenges, including the successful development and eventual commercialization of its product candidates, the ability to obtain necessary regulatory approvals, the potential for competition from other therapies, and the need to continue raising capital to fund its operations.

The company's ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of its treatments and any future product candidates. Compass Therapeutics is also subject to risks and uncertainties common to companies in the biotechnology and pharmaceutical industries, such as the rapid change in technology and substantial competition from other companies.

Outlook

Compass Therapeutics has not provided any specific financial guidance or outlook for the future. However, the company's management has stated that its existing cash resources will enable it to fund its operating expenses and capital expenditure requirements into late 2026, which includes the advancement of its three clinical-stage product candidates.

The company's future funding requirements will depend on many factors, including the scope, timing, and results of its ongoing and planned clinical trials, as well as the costs of manufacturing its product candidates and preparing for potential commercialization. Compass Therapeutics may need to raise additional capital through equity or debt financings, collaborations, or other strategic arrangements to support its continued research and development efforts.

Conclusion

Compass Therapeutics is a promising oncology-focused biopharmaceutical company with a diverse pipeline of novel antibody-based therapeutics targeting critical pathways in tumor growth and the immune system. The company's lead product candidate, CTX-009, has shown promising results in early clinical trials, and Compass is actively advancing it in Phase 2 and Phase 2/3 trials for colorectal cancer and biliary tract cancer, respectively.

With a strong cash position and a focus on developing innovative therapies, Compass Therapeutics is well-positioned to continue its clinical development efforts and potentially bring much-needed new treatment options to cancer patients. However, as a clinical-stage company, Compass faces the inherent risks and challenges associated with drug development, including the need for additional capital to fund its operations. Investors should closely monitor the company's progress and clinical data as it advances its pipeline.