Today, Compass Pathways (Nasdaq: CMPS) announced that they are replacing their CEO. Effective August 1st, George Goldsmith —who is also the Chairman of the company and a founder— will be replaced as Chief Executive Officer by Kabir Nath. Between August 1st and December 31st, Goldsmith will take the role of Executive Chairman to help facilitate this transition, after which he will retain his title of Chairman.
While on first glance, this may appear to be negative news for Compass —after all, a CEO being replaced does not often inspire confidence— Kabir Nath’s resume is quite impressive. Nath comes to Compass from Otsuka Pharmaceutical, a global pharma conglomerate that’s been dipping its toes into psychedelic medicines. On top of being an early investor in Compass itself, Otsuka has also partnered with Mindset Pharma and atai Life Sciences —a company that owns 20.8% of Compass.
Nath’s most recent position at Otsuka was Senior Managing Director of Global Pharmaceuticals, and before that he served as the President and CEO of Otsuka’s North America Pharmaceutical Business. Previously, Nath served on the leadership team of another global pharma company, Bristol Myers Squibb.
In short, Compass Pathways is gaining as their CEO a Big Pharma leader. Nath is a person who knows the intricacies of drug development and has a demonstrable history leading companies.
At this time, it is not clear what changes this transition will bring. As Goldsmith is staying on as Chairman, there will likely be continuity. But companies do not change their CEOs willy-nilly. Obviously, Compass believes that Nath’s experience will help guide them as they move into Phase 3 psilocybin trials —treating Treatment-Resistant Depression— in a manner of which Goldsmith was incapable.
For their part, Compass Pathways gave a very standard answer for what Nath will be doing. In the press release announcing the transition, they write that “Kabir will continue building on COMPASS’ success and advancing patient access to evidence-based technology-enabled innovative care models combining pharmacological, psychological and digital solutions.”
My initial first thought is that there is probably nothing to worry about behind the scenes here. Nath is apparently top pharma leadership talent, and Compass likely believes that while Goldsmith got the company this far, it may be better suited going the last mile under a leader with experience bringing drugs to market. The fact that Goldsmith is staying on in a leadership role leads me to believe that there was no palace coup. But if we quickly see him leave the company after his stint as Executive Chairman in early 2023, then there may be more to this story.
For his part, Kabir Nath seems ready to start in the new role. Writing in the press release, Nath says “I have a deep appreciation for the mission, scientific rigour and commitment to innovation of the COMPASS team who are developing evidence-based and accessible options for some of the world’s most serious mental health conditions…I had the good fortune of being able to establish a strong working relationship with George, his co-founder Ekaterina Malievskaia and some of the COMPASS leadership team and Board members through Otsuka’s investment in COMPASS’ Series B investment round. I have seen first-hand how their passion for this company continues shaping the future of mental health care. I am grateful for this opportunity and excited to execute COMPASS’ vision, bringing its work to the next level to achieve better health outcomes for patients.”
