COMPASS Pathways plc (CMPS)

There’s something going on here that’s for sure. This legal challenge against the patent seems to be the driving force. I’m not an expert on patents but logically what Compass is doing is taking psylocibin which it’s not possible to take in measured form in its natural state. Compass has not only found a way to make every dose measurable and exactly the same but has tested this dose in a clinical setting. That’s a huge amount of work and research. If the FDA approves the results and gives the green light it is separate to the patent. They’re not judging the validity of the patent, rather it’s efficacy. Which seems promising. The legal action is therefore putting pressure on the foundations of Compass business model which knocks on to its share price (value). Even with FDA approval this legal challenge hangs around, right. However what bugs me is why challenge a drug which has been formulated in such a way that it can be regulated and brought to market to help a lot of people? It’s not as though Compass are trying to take ownership of psylocibin as people can grow it if they want and have done for a long time. So the basis for the legal attack seems suspect to me. It doesn’t stack up. So the question has to be asked as to whether those taking legal action are funding and monetising their attack though short selling. If that’s the case sooner or later there will be a short squeeze as there isn’t much money to be made short selling anymore with the share price where it is (low). Just a hunch but this company isn’t about to go bust (as one comment mentions) and has a runway of cash to take it through FDA approval if it’s thats possible. It’s not revenue generating - of course it isn’t, it’s not got FDA approval so that’s not the problem either. The big question here is whether legal action is an Elliot style hostile money making scheme. Elliot will go after underperforming established businesses rather than pre-revenue. So question is what’s going on here and only logical answer in my mind is that the legal action is not ‘for the greater good’ as it claims to be but rather a mechanism to make hostile shorting of the stock highly lucrative at shareholders expense (in the short term at least). I will hang on to see what the FDA says and if it’s good news price could rebound and squeeze out the shorts which compounds the rebound. Think Tesla.