Item 1. Business
Item 1. BUSINESS
Overview
Ovid is a biopharmaceutical company that is dedicated to developing small molecule medicines for brain disorders with significant unmet need. These potential medicines targeting the central nervous system (“CNS”) are designed to potentially halt the course of brain disease by quelling neuronal hyperexcitation and alleviating the most impactful patient symptoms. We seek to address fundamental biological targets in the brain that are implicated in neuronal hyperexcitability, such as neurotransmitters and dysregulated ion channels. By mitigating excessive neuronal hyperexcitation with differentiated medicines, we believe we can unlock substantial scientific, therapeutic and commercial opportunities across a range of neurological and psychiatric conditions that have few therapeutic options today, both impacting patients’ lives and creating long-term stockholder value.
Over the last decade, scientific understanding of the underlying biology of neuronal hyperexcitability and the related pathophysiology of epilepsies, psychoses, and other brain disorders has significantly advanced. Today, the underpinnings of many monogenic epilepsies and seizure disorders are becoming better understood and can be linked to mutations in specific molecular transporters, ion channels and receptors. Additionally, science is beginning to illuminate the systemic and damaging effects of over-excitation on neuronal networks, including its relationship to cell inflammation, stress and apoptosis.
This improved understanding of the genesis and pathophysiology of disease, coupled with advances in preclinical research tools, is enhancing the predictive potential of translational research, and thereby improving the probability of successful clinical development of CNS medicines. Additionally, emerging scientific evidence suggests that hyperexcitability of neurons is implicated in a broad range of conditions well beyond seizures and psychoses. Therefore, ameliorating excessive neuronal hyperexcitability may offer therapeutic relevance and applications in a broad array of brain disorders, including certain psychiatric, neurodegenerative and neurodevelopmental conditions, and other brain traumas.
Despite the scientific advances mentioned above, the unmet need for people living with seizures, epilepsies, and psychiatric diseases remains significant. Relatively few therapeutics utilizing new mechanisms of action (“MoAs”) have been approved in recent decades, and most patients are not ‘cured’ of these conditions. Therefore, the need and opportunity for medicines that act upon fundamental biological targets that impact neuronal excitatory/inhibitory balance remain substantial.
Our vision and focus
Our vision is to create sustained long-term value by advancing a differentiated pipeline of small molecule medicines intended to culminate in a fully integrated neurotherapeutics company with multiple clinical-stage programs and commercial medicines. We believe the lack of new classes of medicine in neurology and neuropsychiatry represents both an unmet need and a significant opportunity.
Through our research and development (“R&D”) and business development strategies, we have in-licensed and clinically developed potential medicines that may offer first-in-class or best-in-class MoAs. Our programs are intended to act upon fundamental biological targets associated with neuronal hyperexcitability in a mechanistically precise fashion. It is our intent to eventually market a franchise of unique medicines that mitigate patient symptoms, such as seizures and psychoses, that stem from hyper-excited neurons. Over time, our efforts have resulted in five clinical-stage drug development programs, including two programs that advanced to late-stage trials. Our current clinical programs are indicated for the potential treatment of drug-resistant focal onset seizures (“FOS”), developmental and epileptic encephalopathies (“DEEs”), including tuberous sclerosis complex (“TSC”) seizures and infantile spasms (“IS”) , psychosis associated with Parkinson’s disease and Lewy body dementia (“LBD”), and schizophrenia. Several preclinical programs are also anticipated to be advanced for other forms of psychosis and mood disorders.
Importantly, we seek to develop medical therapies that are more efficacious and/or have ‘gentler’ profiles for patients, meaning drugs that are intended to deliver preferable safety and tolerability profiles relative to approved drugs. Improved product profiles in neurology and psychiatry are needed, given that many patients require polypharmacy regimens that create cumulative tolerability issues and drug-drug interactions, significantly impacting quality of life and adherence to therapy.
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Our near-term strategy is focused on clinical advancement of potential small molecule medicines to treat specific epilepsies and psychoses that are manifestations of neuronal excitatory/inhibitory imbalance. This cohesive scientific focus, reinforced by our deep professional experience and pipeline of differentiated assets, gives us confidence that we can succeed in our mission.
Additionally, we seek to create stockholder value by establishing multiple sources of potential revenue via clinical and commercial milestones from our pipeline, strategic collaborations and partnerships.
Unmet need and opportunity
While seizures and forms of psychosis are some of the earliest maladies documented by humanity, they remain common, and often intractable, medical conditions.
The global epilepsy and psychosis market opportunities reflect massive medical need and economic potential. Epilepsy and antipsychotic pharmacologic therapies respectively represent approximately $8 billion and $22 billion markets globally and are expected to grow. Reinforcing the scale of the commercial opportunity is the number and size of recent acquisitions of epilepsy and psychiatric medicines companies, which have been acquired for values ranging from $2.6 billion to $14.6 billion. Moreover, the regulatory environment appears increasingly amenable to new approaches in epilepsy and psychiatric conditions. For example, the U.S. Food and Drug Administration (“FDA”) has encouraged developers to seek “basket labels” for single therapeutic agents that cover more than one underlying disease, such as DEE. For the first time in 50 years, a therapeutic with a novel MoA was approved in schizophrenia in 2024.
The unmet need of people affected by seizures and psychosis is substantial. Today, managing patient symptoms commonly requires chronic drug therapy, which is not curative, and may not treat the whole disease.
Unmet need in epilepsy
Approximately 50 million people globally live with epilepsy, including an estimated three million adults and half a million children in the United States.
While modern drug discovery efforts have produced more than 30 anti-seizure medications (“ASMs”) over the last 100 years, a substantial number of epilepsy patients continue to experience breakthrough seizures that can cause enduring damage to the brain. Individuals who suffer from rare epilepsies may experience persistent refractory, or drug-resistant, seizures with rates ranging from 50% to 90%. The seizures they suffer can have a devastating impact both upon patients and their families, by triggering permanent motor, cognitive and developmental delays. Some patients with DEEs experience even greater rates of refractory seizures.
With an estimated 70% of epilepsy diagnoses occurring in people younger than 20 years of age, the need to treat seizures early and effectively is critical to mitigate worsening and permanent later-life disabilities. In the search for seizure control, approximately half of patients take a polypharmacy regimen of five or more ASMs, requiring careful management of drug side effects and interactions. The large population of patients requiring multiple drug therapies to control seizures, as well as persistent rates of breakthrough seizures, signal the urgent need for effective new medicines. For these patients, MoAs that demonstrate improved efficacy, safety and tolerability profiles are optimal, as they may be more easily incorporated into existing treatment regimens.
Unmet need in psychosis and mood disorders
Current standards of care in psychosis rely largely on modulation of dopaminergic and serotonergic pathways. While these approaches provide benefit for some patients, they often fail to adequately control symptoms and carry tolerability burdens. We believe potassium-chloride cotransporter 2 (“KCC2”) modulation represents a differentiated, upstream mechanism designed to restore physiologic inhibitory tone and reestablish network stability, with the potential to improve both efficacy and safety outcomes.
While Ovid’s KCC2 direct activator portfolio has potential applications across a range of psychoses and mood disorders, the focus for our first oral program is psychosis associated with Parkinson’s disease and LBD. These populations share a common pathological link, which is intraneuronal accumulation of alpha-synuclein, which leads to neurodegeneration.
Today, there are more than 4.3 million people globally living with psychosis associated with Parkinson’s disease and LBD. In the United States LBD is the second most common dementia (psychoses affect 80% of the LBD population), affecting 1.5 million Americans, and psychosis associated with Parkinson’s disease impacts approximately another one
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million Americans. These progressive syndromes are characterized clinically by movement disorders, cognitive impairment, sleep dysregulation and autonomic instability. Changes in perception are common, manifesting in visual illusions, misperceptions of visual stimuli, and hallucinations, which can impact health and quality of life.
These conditions lead to high morbidity, mortality and healthcare costs. Psychosis in these populations is also a high risk factor for hospitalization and nursing home placement. Atypical antipsychotics are contraindicated for psychosis associated with Parkinson’s disease and LBD as they may worsen motor features, their anti-dopaminergic pharmacology is untenable in Parkinson’s disease, and many carry a black box warning for mortality.
The current standard of care for psychosis related to Parkinson’s disease is Nuplazid® (pimavanserin), to which only a small proportion of patients fully respond.
Differentiated potential first-in-class or best-in-class programs
The science underlying the discovery and development of new drugs for the brain has changed fundamentally over the last decade. We believe that major developments in the understanding of the biology of these diseases now make it possible to address key areas of unmet need, including many neurological and psychiatric disorders, offering significant therapeutic potential.
We are specifically cultivating a pipeline of potential first-in-class or potential best-in-class MoAs to treat the underlying causes of neuronal imbalance which can lead to manifestations such as seizures, psychosis, schizophrenia, and mood disorders. Collectively, our differentiated pipeline has produced multiple potential value-creating drug programs. Several of these therapeutic development programs — OV329, OV4071 and other KCC2 activators — aim to affect signaling and enzymatic pathways that modulate hyperexcitability of neurons.
Through our scientific expertise and strategic business development, we have performed translational research and in-licensed compounds to build a robust development pipeline of potential medicines, including:
• OV329, a highly potent next-generation GABA-aminotransferase inhibitor (“GABA-AT”). OV329 is intended to deliver preferable seizure reduction, safety profile and dosing relative to prior medicines in the class, which have known safety challenges. OV329 is an oral therapy intended to optimally regulate GABA, the inhibitory neurotransmitter. We announced the results of the OV329 Phase 1 study which evaluated safety, tolerability, and pharmacokinetics (“PK”), as well as biomarkers that offer insight into target engagement, pharmacodynamic (“PD”), and clinical effects. OV329 demonstrated a favorable safety profile in healthy subjects and was well-tolerated with no serious adverse events (“SAEs”) reported. Biomarker data suggest encouraging directional signs of target engagement and clinical effects as measured by magnetic resonance spectrometry (“MRS”) and transcranial magnetic stimulation (“TMS”). These indicate signs of increased GABAergic activity consistent with the intended mechanism of action by inhibiting GABA-AT.
◦ New data from an additional OV329 Phase 1 cohort shows continued differentiated safety and tolerability profile:
▪ 7 mg SAD and MAD cohort (n=11) shows all adverse events reported as unrelated, mild and transient, no SAEs and continued clean ocular safety profile, with a predictable PK effect
▪ Regulatory discussions underway in support of planned Phase 2 patient studies
◦ Launching additive studies to expand OV329 into TSC and IS, areas where GABA-AT inhibition has been shown as a validated mechanism and OV329 potentially offers a differentiated safety profile in comparison to current standard of care, enabling earlier and longer use
• In TSC, POC safety and signal-finding study to initiate as early as Q4 2026
• In IS, infant formulation and enabling studies are ongoing
• Studies are going to be run in parallel to FOS program
• KCC2 library, a portfolio of potential first-in-class direct activators of potassium-chloride cotransporter 2. KCC2 is a fundamental biological target, solely expressed in the CNS, that enables synaptic inhibition. KCC2 dysregulation has been implicated in a broad range of neuropathologies. We are actively advancing multiple unique drug development programs that emerged from our KCC2 direct activator library containing more than 100 molecules. We were the first to report data in humans from a KCC2 direct activator from our intravenous (IV) program, OV350, a first-in-human KCC2 direct activator. Results of the Phase 1 first-in-human study of OV350 showed no treatment-related laboratory findings, no safety findings, and no treatment-related SAEs. The PK were
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as predicted, and will inform dosing strategies for future KCC2 development programs. These data support development of the Company’s oral direct activator programs, which are the focus of future development efforts. The KCC2 direct activator pipeline includes OV4071 and other undisclosed molecules. Each program has potential distinct therapeutic and potency characteristics as demonstrated in varying phenotypic screens and animal disease models, reflecting multiple therapeutic opportunities and optionality for co-development. The portfolio is being evaluated for a range of therapeutic indications that have symptoms associated with psychoses and mood disorders.
• OV4071, a first-in-human oral KCC2 direct activator approved for clinical trial initiation. OV4071 is the most advanced program in the KCC2 library. We intend to initiate a Phase 1 clinical study in the second quarter of 2026 following receipt of Human Research Ethics Committee (HREC) approval and acknowledgement of our Clinical Trial Notification (CTN) from the Therapeutic Goods Administration (TGA ). The Phase 1 clinical trial will study multiple dose levels in an ascending single and multiple dose trial.
◦ As part of the OV4071 clinical development plan, Ovid intends to conduct a ketamine challenge study in mid-2026 to further characterize potential PD effects and establish proof-of-mechanism.
• Collectively, these development programs and other KCC2 direct activators in preclinical studies are expected to generate a range of value-creating milestones for investors in the near- and mid-term.
R&D strategy: Differentiated MoAs to precisely target the causes of neuronal hyperexcitability
Our R&D strategy is dedicated to designing medicines that can ameliorate excessive neuronal excitation and return neurons to a state of homeostasis, or electrophysiological “balance.” Many factors can contribute to neuronal hyperexcitability, including those that are intrinsic or extrinsic to the cell. Extrinsic factors can include an imbalance or dysfunction of neurotransmitters, traumas, and infections. Other factors are intrinsic to the neuron (e.g., genetic conditions or the disruption of neuronal metabolism). Whatever its origin, electrophysiological imbalance and resultant neuronal hyperexcitability manifests in a range of debilitating symptoms, including seizures and psychiatric symptoms such as psychosis, behavioral, mood disorders and more. Such symptoms are prevalent across a range of diagnoses, including: epilepsies, neurodegenerative diseases and neurodevelopmental disorders. Therefore, drugging targets that lead to excessive neuronal excitation may have widespread therapeutic utility.
While some drug development companies focus exclusively on a single biological target or MoA, we believe that multiple MoAs will be necessary to effectively treat the heterogeneous causes of hyperexcitability. Accordingly, our pipeline seeks to curate and develop a unique set of molecules that can be effective as monotherapies and within the context of polypharmacy regimens. We believe this approach will create a differentiated and leading epilepsy and psychosis franchise.
Core tenets of our approach include a focus on:
• Small molecule compounds. Ovid’s pipeline consists of small molecule programs that can potentially be delivered orally, by subcutaneous or intramuscular injection, or intravenously. The compounds we seek to develop are mechanistically designed to activate or modulate specific biological targets. We plan to take advantage of the versatility small molecules have to offer in terms of manufacturing, chemistry and dosing, with the ultimate goal of delivering medicines that can be easily taken by patients for chronic conditions.
• Target validation and indication selection. Our therapeutic development programs focus on precise MoAs for biological targets that are confirmed to be relevant in excessive neuronal excitation with established relevance to hyperexcitability through in vitro and in vivo animal models. Prior to advancing our drug candidates from nonclinical evaluation into clinical trials, we apply a systematic approach to de-risk molecules using emerging tools, phenotypic screens and animal disease biology models. Additionally, we prioritize targets that are either uniquely (1) expressed in the CNS, such as KCC2 cotransporters, or are (2) over-expressed in a pathological state, such as GABA-AT.
• Prioritization of the total drug profile. We strive to develop drug candidates that deliver therapeutic efficacy while maintaining safe and well-tolerated side effect profiles. Our preclinical and toxicology work seeks to screen for and respectively avert drug or dose dependent effects, such as sedation or drug-drug interactions, that could impact patient tolerability.
Business development strategy: Pipeline built through disciplined business development and enhanced with academic collaborations
Ovid has primarily built our pipeline through strategic business development. We identify molecules with untapped potential value and seek to in-license or enter into collaborative agreements to secure such assets and advance
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clinical development. This strategy directs our efforts where we excel in creating value and shaping translational and clinical stage development. An integral part of our process is establishing collaborations with academic research centers to support translational expertise for our programs.
The multiple programs in our diversified pipeline provide optionality to pursue out-bound business development to expand our opportunities. As the pipeline progresses, we may endeavor to partner the development of our compounds in non-core indications or extend regional market rights outside the United States. We believe that we are well-positioned to execute on our business development strategy due to the extensive experience and networks of our management team. Collectively, our senior management has transacted hundreds of in-licensing deals and collaborations.
We continue to enhance and expand our pipeline via two complementary strategies: (1) internal R&D efforts in collaboration with external leaders in the field and academic collaborators; and (2) business development activities to partner with collaborators that have promising programs or assets in our chosen therapeutic areas.
Clinical development approach
We take a scientifically driven and evidence-based approach to translation and clinical development of our programs. We are building our portfolio based on the existence of known biological rationales that are associated with targets, and which can be evaluated using validated biomarkers and clear endpoints that are meaningful to patients, clinicians and regulators. Our early clinical development efforts focus on time- and cost-efficient trials that address key questions critical to de-risking future development.
Our approach is driven by the following scientific principles:
• Clinically translatable preclinical models inform indication selection . Recent advances in genetics and artificial intelligence enable us to employ predictive in vitro and in vivo models of specific brain diseases and symptoms. We believe these predictive disease biology models will allow us to evaluate and observe a drug candidate’s potential phenotypic and therapeutic activity prior to initiation of human trials.
• Sentinel indications. Our drug development approach generally pursues rare, resistant conditions as initial “sentinel” indications. Pursuing rare, resistant conditions can enable us to demonstrate rapid proof-of-concept (“POC”) for our compounds while potentially exploring efficient regulatory pathways and incentives. Case studies of the life cycle management for prior ASMs suggest that demonstration of refractory seizure reduction is often indicative of therapeutic effect in more common and tractable seizure types. Similarly, many ASMs were later proven to have clinical efficacy in other neurological conditions.
• Biomarker strategies for early PD and clinical insight. Whenever possible we integrate biomarker strategies beginning early in translational and clinical development to help identify whether our programs are achieving target engagement and having a PD effect on clinical parameters that are relevant to disease processes and manifestations. Such biomarkers can help identify whether we are achieving biologically active doses to inform patient studies. Using such biomarkers may provide early POC in clinical development and, in turn, guide capital allocation toward projects with a higher probability of later stage success.
• Meaningful endpoints and scales. We focus on clear, observable endpoints that are meaningful to patients, caregivers, clinicians and regulators. Our clinical development experts have extensive experience identifying and using validated scales and designing scales to measure symptoms that are common among seizure and psychiatric disorders, such as cognitive declines, movement deficiencies, hallucinations and behavioral manifestations. These skills support our ability to develop medicines that may provide clinical benefit across multiple aspects of patient health.
• Motivated and accessible patient populations. We seek to develop medicines for disorders with motivated and accessible patient populations. Patients and caregivers affected by intractable brain disorders have increasing access to diagnostics and genetic testing. Additionally, many are social media users, through which they learn new insights about their conditions and share relevant information and experiences. We conduct patient community outreach and activities to inform our clinical design, educate patients about trial opportunities and support efficient study enrollment.
Fit-for-purpose infrastructure
We have built a highly specialized, efficient, and focused infrastructure that supports our chosen areas of neurotherapeutics development. This infrastructure spans the critical domains of R&D and market access strategy. The scale and design of the organization reflects the needs of our pipeline programs and our status as a publicly-traded company.
We have recruited a team of 23 professionals, many with deep subject matter expertise in seizures and neurological conditions. This includes physicians, academic scientists, and commercial and biopharmaceutical industry leaders. We have three individuals with MD degrees and eight professionals with PhD degrees specializing in the sciences.
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Our operational leaders have extensive experience developing, formulating, manufacturing, regulatory controls and implementing market access strategies for leading neurological medicines. In total, our team’s collective professional experience has resulted in the successful development or commercial launch of more than 25 medicines, including many CNS products. Over time, we have built upon our core strength in the clinical development of medicines for anti-seizure and genetic neurodevelopmental conditions and expanded into adjacent therapeutic areas of drug development in the CNS where strong mechanistic evidence exists.
Ovid pipeline
Our efforts have already brought drug candidates from POC into late-stage patient clinical trials. Today, we are one of the few companies that has researched and developed three distinct MoAs to target seizures and we believe we are the only company that holds a portfolio of direct activators of KCC2. We believe this pipeline of potential first-in-class or best-in-class mechanisms differentiates us and provides the foundation for a productive franchise of small molecule neurotherapeutics for epilepsies, psychoses, schizophrenia and mood disorders.
The following table (Figure 1) sets forth our drug candidate programs and their development status, respective MoAs, and anticipated near-term milestones.
Figure 1. Ovid Therapeutics Pipeline
OV329 - A next-generation GABA-AT inhibitor
OV329 is a clinical-stage, next-generation GABA-AT inhibitor that we are developing for the treatment of adult and pediatric DREs. OV329 represents a potential best-in-class GABA-AT inhibitor and was designed to supplant vigabatrin (“VGB”), which is an approved therapeutic globally for the treatment of infantile spasms. VGB was a first-generation medicine that demonstrated substantial seizure reduction; however, its clinical and commercial use was limited by lack of a therapeutic window. Specifically, VGB was proven to generate deleterious and irreversible ocular effects in some patients, including retinal degradation and irreversible vision loss that led to significant post-market restrictions and monitoring.
We believe OV329 to be an improved GABA-AT inhibitor with a different chemical structure, potency, binding, PK and PD profile as compared to VGB. OV329 has been shown to deliver increased potency and efficacy in the target binding site. In preclinical research it was demonstrated to be 100-fold more potent than VGB. An oral formulation of OV329 was assessed in a Phase 1 study with multiple biomarkers to measure clinical effect and target engagement, in addition to evaluating safety, tolerability and PK. Following the successful completion of the initial cohorts, we are conducting additional higher dose cohorts of OV329 evaluating safety, tolerability and PK. We believe that OV329 has the potential to be a therapeutic option for adult DREs, including FOS, and DEEs, including TSC and IS. The data from the Phase 1 study support advancing OV329 into a Phase 2 trial.
A benefit of our OV329 program is that it acts upon a validated drug target for seizures. Specifically, it works by substantially reducing the activity of GABA-AT, a key enzyme responsible for the degradation of the brain’s major inhibitory neurotransmitter, GABA. OV329 leads to increased concentrations of GABA by inhibiting its metabolism.
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Given that epilepsy is characterized by excessive neuronal excitation, the increased levels of GABA may suppress this excitatory signaling and thus reduce seizures.
OV329 profile
Based upon preclinical data supporting OV329, we believe it has the potential to provide (in comparison to VGB) greater seizure reduction efficacy, improved tolerability and safety profiles without sedation, and lower dosing in comparison to existing therapeutics.
To support OV329’s anti-convulsant profile, nine animal seizure models have demonstrated its seizure reducing effects (see Figure 2 below). These findings from both chronic and acute seizure models provide additional confidence about the therapeutic potential of OV329 in humans. The PD profile of OV329 is differentiated from VGB. Preclinical research has shown that OV329 induces phasic (synaptic) and tonic (extra-synaptic) inhibition of GABA-AT. This produced more GABA in the synapse and environmental milieu, potentially contributing to more durable inhibitory effects.
Figure 2. Nine preclinical animal models reaffirm OV329 seizure reduction activity, including resistant seizure models
OV329 safety profile
To date, OV329 has been well tolerated in humans in our Phase 1 study. There have been no treatment-related serious adverse events reported, and only mild and transient treatment-related adverse events reported, such as headache. Additionally, to characterize OV329’s potential safety profile relative to VGB, our preclinical efforts sought to extensively study safety and tolerability, including any potential ocular changes.
We have demonstrated that the tissue clearance of OV329 is rapid, which when coupled with its potency and irreversible binding, leads us to believe that the accumulation in the back of the eye does not occur as it does with VGB, which has a longer half-life.
We presented results at the American Epilepsy Society meeting of a head-to-head animal study evaluating whether OV329 could be found to accumulate in mouse retinas and brains, as has been previously shown to occur with VGB. The preferential accumulation of VGB in the eye is thought to be a contributing factor in VGB’s ocular toxicity. The findings (summarized in Figure 3 below), were that OV329 cleared and remained undetectable in the retinas, eyes, and brains of mice after 48 hours of continuous exposure via a sub-cutaneous osmotic pump, suggesting a lack of accumulation. In contrast, ocular accumulation of VGB was confirmed within this period. These results replicate previously published findings that indicate VGB preferentially and rapidly accumulates within mouse tissue and plasma, including retina, visual cortex, and brain at sub-therapeutic doses (70 mg/kg). In contrast, a therapeutic dose of OV329 in animals (5 mg/kg) did not show signs of ocular accumulation in the same study design.
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Figure 3. OV329 clears brain and eye tissue rapidly and does not accumulate like VGB
1 Tsai, J., et al. (2024). Evaluation of the Potential Accumulation of OV329 in the Brain, Retina, and Eye Following Continuous Infusion . Poster
presented at the 2024 Epilepsy Pipeline Conference
These results complement previously presented studies which showed that therapeutic doses of OV329 (3 mg/kg) did not result in retinal tissue pathology at 45 days in Sprague-Dawley rats, an animal model that investigates structural and functional ocular toxicity (see Figure 4). In contrast, VGB did show retinal cell degradation at the therapeutic dose in animals of 300 mg/kg at 45 days.
We applied a clinically translatable rodent model of albino Sprague-Dawley rats to determine if any ocular changes could be observed associated with the predicted therapeutic doses of OV329 and VGB, as compared to placebo. This rodent model is an accepted proxy by the FDA for the ocular effects seen in humans treated with VGB. Figure 4 (below) demonstrates the results of our research.
After 45 days of dosing with the therapeutic dose of VGB and an expected therapeutic dose of OV329 (3 mg/kg), the model showed no ocular effect in animals taking OV329, whereas disruption in retinal cells was seen in animals taking the therapeutic dose of VGB (300 mg/kg). In this short-term model, OV329’s ocular profile appears similar to placebo, and no disruption to the retina was seen at the anticipated therapeutic dose. These models must be confirmed in human studies, though they lead us to believe that OV329 may offer significant seizure reduction benefit with a therapeutic window not provided by VGB.
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Figure 4. No ocular changes seen in rodents treated with expected therapeutic dose of OV329 (3 mg/kg)
Human studies and biomarker strategy
We announced topline results of our Phase 1 trial of OV329 in the third quarter of 2025 and presented these data at the 2025 American Epilepsy Society Meeting. The Phase 1 trial evaluated PK profile, safety, tolerability and target engagement associated with escalating doses of OV329 in healthy volunteers. Two surrogate biomarkers, TMS and MRS, were included as exploratory biomarkers in the study to measure a corollary for clinical biological effect and target engagement. Biomarker data suggest encouraging directional signs of target engagement and clinical effects as measured by the utilized biomarkers. These findings indicate signs of increased GABAergic activity consistent with the intended mechanism of action by inhibiting GABA-aminotransferase. Previous studies have reported that MRS measurement of GABA concentration levels increase following treatment with GABA-AT inhibitors, which has been shown to correlate with seizure reduction efficacy in existing GABA-AT inhibitor programs. These metrics coupled with safety, data and pharmacokinetic data may inform mid- to late-stage development of the program. OV329 will be further studied for the potential treatment of DREs, including FOS.
We announced that we will be pursuing additional POC studies in TSC and IS, which will be run in parallel to our program in FOS. OV329 has the potential to have differentiated safety profile as compared to current standard of care; enabling earlier and longer use. Our confidence in these programs comes from validated novel MOA, which offers the transformative potential to alter the course of disease. These additional indications open a large opportunity for OV329, as it has a differentiated safety and tolerability profile, along with robust target engagement and potential flexibility of use with no anticipated titration and no drug-drug interactions. Preclinical data support OV329’s potential efficacy with compelling anti-convulsant effects in a mouse model of infantile spasm, and in animal models of focal seizures. Importantly, we have a robust body of clinical and preclinical data demonstrating that OV329 does not accumulate in the retina, greatly improving upon the ophthalmic risk associated with VGB.
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OV329 Development Timelines
With the addition of TSC and IS, we have expanded an additional path to registration, and have also supplemented a catalyst-rich pipeline that potentially unlocks the full value of OV329.
KCC2 direct activator portfolio
In late 2021, we in-licensed a portfolio of more than 100 molecules from AstraZeneca AB (“AstraZeneca”), which are direct activators of KCC2. Since that time, we have extensively characterized the library for bioavailability, formulation amenability and therapeutic potential. As a result, we now have three unique programs that we intend to successively progress into human clinical studies. These include OV4071 and other undisclosed programs. Based upon our phenotype screens, disease model studies, and published evidence, we believe this portfolio offers broad therapeutic potential in a range of brain disorders and symptoms including psychosis, schizophrenia, other behavior and mood disorders, and seizures. This may include neurodegenerative and neurodevelopmental diseases that exhibit the above mentioned symptoms. Given the broad therapeutic relevance of KCC2 in many brain disorders, it is our desire to unlock the full value of KCC2 for stockholders and patients.
KCC2: A fundamental target in the CNS
KCC2 is a fundamental biological target expressed exclusively in the CNS and is central to maintaining synaptic inhibition. Hundreds of publications link KCC2 dysregulation directly or indirectly to various medical conditions and symptoms associated with excessive neuronal excitation. KCC2 is an ion cotransporter that regulates chloride extrusion in neurons. A functioning chloride gradient is essential to GABA being inhibitory in neuronal synapses. By directly activating KCC2, our development programs seek to restore GABAergic inhibition and bring hyper-excited neurons into homeostasis.
We believe that our KCC2 portfolio represents the only small molecule library within the broad biopharmaceutical industry that directly activates this unique ion cotransporter. Other companies have attempted to activate KCC2; to our knowledge, no others have been successful. However, some may potentiate the cotransporter, which will likely have different clinical effects.
KCC2 direct activator library
Our KCC2 direct activator portfolio includes two programs in active characterization and development, which we believe are suitable for pharmaceutical development. We have characterized and translated multiple candidates from the KCC2 portfolio for development in epilepsy as well as other possible neurological conditions associated with psychiatric, neurodegeneration and neurodevelopmental disorders. Phenotypic screens and confirmatory animal disease models suggest that our programs, including: OV4071 and other undisclosed molecules, have potential therapeutic properties associated with antipsychotic, anxiolytic and anticonvulsant response. We have also determined that the unique molecules in the library are amenable to a range of formulations, including intravenous, oral and intramuscular injections.
Over the next three years, we anticipate filing regulatory submissions for human trials annually for successive programs emerging from our KCC2 portfolio. As noted above, these programs represent opportunities for in-house
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development, co-development or out-licensing. The library of early-stage small molecules that target KCC2, including OV4071, are included in a pending composition-of-matter application that was filed globally and, if issued, will expire in 2041 excluding any potential regulatory extensions.
OV4071
In 2025, we completed first-in-human studies of OV350 IV, for which topline data results were announced in the fourth quarter. The data demonstrate a favorable safety profile, no treatment-related SAEs, and indicate central activity and spectral power consistent with expected physiological effects of KCC2 modulation aligned with potential drug exposure in the brain. In 2025, we elected to prioritize and direct our capital resources to accelerate chronic (oral) formulations of our oral direct activator programs, including OV4071. Accordingly, we do not intend to advance OV350 further in the clinic. We believe the results from OV350 support the advancement of our portfolio of KCC2 direct activators, including OV4071. We intend to initiate a Phase 1 clinical study of OV4071 in the second quarter of 2026 following receipt of HREC approval and acknowledgment of our CTN from the TGA. The Phase 1 clinical trial will study multiple dose levels in as ascending single and multiple dose trial.
As noted above, these conditions have deep unmet patient need and are underserved by the current standard of care. Furthermore, in vivo POC studies have established that restoring KCC2 activity reduced psychotic behaviors in animals (see Figure 5 below). Preclinical mechanistic studies have also demonstrated that OV4071 was well-tolerated and did not induce sedation.
Figure 5. OV350 demonstrates antipsychotic effects in schizophrenia model
License and Collaboration Agreements
Research Collaboration and Equity Investment in Gensaic (2022)
Under the terms of an equity agreement, we invested a total of $5.1 million in exchange for convertible preferred stock in Gensaic, Inc. (“Gensaic”). Dr. Jeremy M. Levin, our Executive Chairman, is a director of Gensaic. We also entered into a collaboration agreement with Gensaic (the “Gensaic Collaboration Agreement”) to potentially develop up to three genetic medicines for neurological indications of interest to us, harnessing Gensaic’s proprietary tissue-selective intracellular delivery platform. Gensaic retains full rights to its platform technology. We will have commercial rights to license and develop any resulting therapies and delivery technologies that emerge from this collaboration subject to agreed-upon terms. We also retained rights to invest in future equity financing rounds. In January 2026, the Gensaic Collaboration Agreement was amended to allow for identification of a new research project target in order to utilize the remaining prepaid funds from the original agreement, with additional immaterial provisions to the agreed-upon terms.
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Royalties Associated with Marinus Out-License Agreement (2022)
In March 2022, we entered into an exclusive patent license agreement with Marinus Pharmaceuticals, Inc. (“Marinus”) (“Marinus License Agreement”). Under the Marinus License Agreement, we granted Marinus an exclusive, non-transferable (except as expressly provided therein), royalty-bearing right and license under certain Ovid patents relating to ganaxolone to develop, make, have made, commercialize, promote, distribute, sell, offer for sale and import licensed products in the territory (which consists of the United States, the European Economic Area, United Kingdom and Switzerland) for the treatment of CDKL5 deficiency disorder. Following the date of regulatory approval by the FDA of the first licensed product in the territory, which was received on March 18, 2022, Marinus issued, at the Company’s option, 123,255 shares of Marinus common stock, par value $0.001 per share. The Marinus License Agreement also provided for payment of royalties from Marinus to us in single digits on net sales of each such licensed product sold. In January 2025, Marinus was acquired by Immedica Pharma, S.A. (“Immedica”). In June 2025, we entered into an amendment to the Marinus License Agreement and received $7.0 million in cash to replace ongoing royalty payment obligations on sales of ganaxolone, as well as the right to add additional patents to the licensed portfolio within the following six months. In December 2025, the right to add additional patents to the licensed portfolio lapsed without any additions.
Exclusive In-Licensing Agreement with AstraZeneca (2021)
In December 2021, we entered into an exclusive license agreement (“AstraZeneca Exclusive License Agreement”) with AstraZeneca. Under the terms of the AstraZeneca Exclusive License Agreement, we have obtained worldwide rights to a portfolio of early-stage, small molecule compounds targeting the KCC2 transporter, including our lead compound, OV4071. In exchange for an upfront payment of $5.0 million in cash and $7.3 million in shares of our common stock to AstraZeneca, we are responsible for using commercially reasonable efforts to carry out all future development and commercialization of KCC2 transporter activators in epilepsies and potentially other neuropathic conditions. We are obligated to pay AstraZeneca potential clinical development milestones of up to $8.0 million, regulatory milestones of up to $45.0 million and total commercial milestones of up to $150.0 million, as well as tiered royalty payments ranging from the single digits up to ten percent on net sales. At the time of proof of clinical efficacy, AstraZeneca will have the right of first negotiation to opt in to co-develop and co-commercialize KCC2 transporter activators with Ovid. The license option will continue until the expiration of all relevant royalty terms.
Northwestern University License for OV329 (2016)
In December 2016, we entered into a license agreement (“Northwestern Agreement”) with Northwestern University (“Northwestern”), pursuant to which Northwestern granted us an exclusive, worldwide license to patent rights in certain inventions (“Northwestern Patent Rights”) which relate to a specific compound (OV329) and related methods of use for such compound, along with certain know-how related to the practice of the inventions claimed in the Northwestern Patent Rights. Under the Northwestern Agreement, we were granted exclusive rights to research, develop, manufacture and commercialize products utilizing the Northwestern Patent Rights for all uses, other than cancer.
Upon entry into the Northwestern Agreement, we paid an upfront non-creditable one-time license issuance fee of $75,000, and we are required to pay an annual license maintenance fee of $20,000, which will be creditable against any royalties payable to Northwestern following first commercial sale of licensed products under the agreement. We are responsible for all ongoing costs of filing, prosecuting and maintaining the Northwestern Patent Rights, but we also have the right to control such activities using our own patent counsel. In consideration for the rights granted to us under the Northwestern Agreement, we are required to pay to Northwestern up to an aggregate of $5.3 million upon the achievement of certain development and regulatory milestones for the first product covered by the Northwestern Patent Rights, and, upon commercialization of any such products, will be required to pay to Northwestern a tiered royalty on net sales of such products by Ovid, its affiliates or sublicensees, at percentages in the low to mid-single-digits, subject to standard reductions and offsets. Our royalty obligations continue on a product-by-product and country-by-country basis until the later of the expiration of the last-to-expire valid claim in a licensed patent covering the applicable product in such country and ten years following the first commercial sale of such product in such country. If Ovid sublicenses a Northwestern Patent Right, it will be obligated to pay to Northwestern a specified percentage of sublicense revenue received by us, ranging from the high single-digits to the low-teens.
The Northwestern Agreement requires that we use commercially reasonable efforts to develop and commercialize at least one product that is covered by the Northwestern Patent Rights. Unless earlier terminated, the Northwestern Agreement will remain in force until the expiration of our payment obligations thereunder. We have the right to terminate the agreement for any reason upon prior written notice or for an uncured material breach by Northwestern. Northwestern may terminate the agreement for our uncured material breach or insolvency.
License Agreement with H. Lundbeck A/S (2015)
In March 2015, we entered into a license agreement with H. Lundbeck A/S (“Lundbeck”), which we subsequently amended in May 2019, and July 2020 (collectively, the “Lundbeck Agreement”). As part of the Lundbeck Agreement, we obtained from Lundbeck an exclusive (subject to certain reserved non-commercial rights), worldwide license to develop,
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manufacture and commercialize OV101, also known as gaboxadol. We subsequently closed our OV101 (gaboxadol) program in Angelman syndrome in early 2021.
Sales and Marketing
Given our stage of development, we have not yet established commercial and distribution infrastructures. However, we do have internal market access and commercial capabilities that inform our pipeline strategy and execution. As our pipeline assets advance in the clinic, we intend to build focused capabilities to commercialize our programs. In markets for which commercialization may be less capital efficient for us, we may selectively pursue strategic collaborations with third parties in order to maximize the commercial potential of our drug candidates.
Manufacturing and Supply
We currently outsource all manufacturing, and intend to continue utilizing collaborators and contract manufacturers for the foreseeable future. However, members of our management have broad experience in manufacturing, which we believe may provide a competitive advantage.
Competition
The fields of epilepsy, including FOS and DEEs such as TSC and IS, and psychiatric medicines are highly fragmented. There is no one direct competitor, though there are others in the field of epilepsy who market to similar indications as we may explore. Those include: UCB, Jazz Pharmaceuticals plc, SK Biopharmaceuticals Inc., Harmony Biosciences, and Xenon Pharmaceuticals, Inc. These are our most direct competitors with respect to OV329. Our KCC2 programs are potentially intended for the treatment of psychosis associated with Parkinson’s disease and LBD, schizophrenia, and mood disorders. The only existing medicine indicated for psychosis associated with Parkinson’s disease and LBD is marketed by Acadia Pharmaceuticals Inc. We are aware of one other company seeking to develop KCC2 potentiators, which is Axonis Therapeutics, Inc.
Drug development is highly competitive and subject to rapid and significant technological advancements. Our ability to compete will significantly depend upon our ability to complete necessary clinical trials and regulatory approval processes, and effectively market any drug that we may successfully develop. Our current and potential future competitors include pharmaceutical and biotechnology companies, academic institutions and government agencies. The primary competitive factors that will affect the commercial success of any drug candidate for which we may receive marketing approval include efficacy, safety and tolerability profile, dosing convenience, price, coverage and reimbursement. Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of drug candidates, as well as in obtaining regulatory approvals of those drug candidates in the United States and in other regions.
Our current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing. Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a small number of our competitors.
Accordingly, our competitors may be more successful than us in obtaining regulatory approval for therapies and in achieving widespread market acceptance of their drugs. It is also possible that the development of a cure or more effective treatment method for the disorders we are targeting by a competitor could render our current or future drug candidates non-competitive or obsolete or reduce the demand for our drug candidates before we can recover our development and commercialization expenses.
Intellectual Property
Our commercial success depends in part on our ability to obtain and maintain proprietary protection for our current and future drug candidates, novel discoveries, product development technologies and know-how, to operate without infringing on the proprietary rights of others, and to prevent others from infringing upon our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing or in-licensing U.S. and foreign patents and patent applications related to technology, inventions and improvements that are important to the development and implementation of our business. We also rely on trademarks, trade secrets, copyright protection, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position.
While we seek broad coverage under our existing patent applications, there is always a risk that an alteration to the product or process may provide sufficient basis for a competitor to avoid infringement claims. In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued and courts can reinterpret patent scope after issuance. Moreover, many jurisdictions, including the United States, permit third parties to challenge issued patents in administrative proceedings, which may result in further narrowing or even cancellation of patent claims. We cannot
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provide assurance that any patents will be issued from our pending or future applications or that any potentially issued patents will adequately protect our intellectual property.
We exclusively licensed a portfolio of issued U.S. and international patents from Lundbeck directed to polymorphic forms of OV101 and their preparation and methods of manufacturing OV101. We have also filed, and own, multiple patent families directed to methods of treatment and formulations with OV101. Subsequently, we have licensed much of this portfolio to Healx Ltd, and are not further developing OV101.
OV329 was in-licensed from Northwestern. OV329’s composition of matter patent expires in 2036, excluding regulatory extensions. We have also filed, and own, multiple patent families involving the synthesis of OV329 and methods of treatment with OV329.
A library of early-stage small molecules that target KCC2 was in-licensed from AstraZeneca. The molecules are included in a pending composition-of-matter application that was filed globally and, if issued, will expire in 2041, excluding any potential regulatory extensions. We have also filed, and own, multiple patent families directed to methods of treatment with KCC2 direct activation.
We continue to expand our intellectual property portfolio to protect our library of potential development candidates. Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, utility patents issued for applications filed in the United States are granted a term of 20 years from the earliest effective filing date of a non-provisional patent application. In addition, in certain instances, a patent term can be extended to recapture a portion of the U.S. Patent and Trademark Office (the “USPTO”) delay in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDA component, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective filing date. The actual protection afforded by a patent may vary on a product-by-product basis, from country to country and can depend upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.
Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our employees and consultants and any potential commercial partners and collaborators, as well as invention assignment agreements with our employees. We also have or intend to implement confidentiality agreements or invention assignment agreements with our selected consultants and any potential commercial partners. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party. These agreements may be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, or our drugs or processes, obtain licenses or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future drugs may have an adverse impact on us. Since patent applications in the United States and certain other jurisdictions are maintained in secrecy for 18 months or potentially longer, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain of the priority of inventions covered by pending patent applications. Moreover, we may have to participate in Interference, Derivation, Ex Parte Reexamination, Post-Grant Review, Inter Partes Review or Opposition proceedings, brought by third parties or declared by the USPTO.
Government Regulation
The FDA and regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs such as those we are developing. These agencies and other federal, state and local entities regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of drugs and drug candidates.
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U.S. Government Regulation
In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending New Drug Applications ( “ NDAs ” ), withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.
The process required by the FDA before a drug product may be marketed in the United States generally involves the following:
• completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s Good Laboratory Practice ( “ GLP ” ) regulations;
• submission to the FDA of an IND, which must become effective before human clinical trials may begin;
• approval by an independent institutional review board ( “ IRB ” ) at each clinical site before each trial may be initiated;
• performance of adequate and well-controlled human clinical trials in accordance with current Good Clinical Practice ( “c GCP ” ) requirements to establish the safety and efficacy of the proposed drug product for each indication;
• submission to the FDA of an NDA;
• satisfactory completion of an FDA advisory committee review, if applicable;
• satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current Good Manufacturing Practice ( “ cGMP ” ), requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity, and;
• FDA review and approval of the NDA.
Preclinical Studies
Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy. An IND sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some preclinical testing may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.
Clinical Trials
Clinical trials involve the administration of the investigational new drug to human patients under the supervision of qualified investigators in accordance with cGCP requirements, which include the requirement that all research patients provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution. Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health ( “ NIH ” ) for public dissemination on their website www.clinicaltrials.gov.
Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined:
• Phase 1 clinical trial: The drug is initially introduced into healthy human volunteers, or patients without the targeted disease or condition, and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness.
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• Phase 2 clinical trial: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases or conditions and to determine dosage tolerance and optimal dosage.
• Phase 3 clinical trial: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA, and more frequently if serious adverse events are observed. Each of Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.
Marketing Approval
Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee. Under the Prescription Drug User Fee Act ( “ PDUFA ” ) guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission. This review typically takes twelve months from the date the NDA is submitted to the FDA because the FDA has approximately two months to make a “filing” decision.
The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accepting an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.
In addition, under the Pediatric Research Equity Act of 2003, as amended and reauthorized, certain research must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.
The FDA also may require submission of a risk evaluation and mitigation strategy ( “ REMS ” ) plan to ensure that the benefits of the drug outweigh its risks. A REMS plan could include medication guides, physician communication plans, assessment plans, or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.
The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with cGCP requirements.
After evaluating the application and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific
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conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing in order for the FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.
Even if the FDA approves a product, it may limit the approved indications for use of the product, require that particular contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.
Orphan Drug Act
Under the Orphan Drug Act of 1983, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the name of the sponsor, identity of the drug and its potential orphan use are disclosed publicly by the FDA. The orphan drug designation does not shorten the duration of the regulatory review or approval process, but does provide certain advantages, such as a waiver of PDUFA fees, enhanced access to FDA staff and potential waiver of pediatric research requirements.
If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA, or an abbreviated NDA (“ANDA”), to market a drug with the same active moiety for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the application user fee. A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
Post-Approval Requirements
Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.
The FDA may impose a number of post-approval requirements as a condition of approval of a marketing authorization. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.
In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies and are subject to periodic unannounced inspections by the FDA and state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.
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Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:
• restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
• fines, warning letters or holds on post-approval clinical trials;
• refusal of the FDA to approve related pending applications or supplements to approved applications, or suspension or revocation of product approvals;
• product seizure or detention, or refusal to permit the import or export of products; or
• injunctions or the imposition of civil or criminal penalties.
The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.
Coverage and Reimbursement
Sales of our drug candidates, if approved, will depend, in part, on the extent to which such products will be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly limiting coverage or reducing reimbursements for medical products and services. In addition, the U.S. government, state legislatures, and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. For example, the United States Department of Health and Human Services (“HHS”) imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis. In addition, HHS has been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven years and single-source biologics that have been on the market for at least 11 years covered under Medicare as part of the Medicare Drug Price Negotiation Program. Each year up to 20 products will be selected by HHS for the Medicare Drug Price Negotiation Program. Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize any product candidates for which we receive approval, which could have an adverse effect on our operating results and our overall financial condition. Third-party payors decide which therapies they will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. Further, no uniform policy for coverage and reimbursement exists in the United States. Therefore, decisions regarding the extent of coverage and amount of reimbursement to be provided for any drug candidates that we develop will be made on a payor-by-payor basis. Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed. The position on a payor’s list of covered drugs, or formulary, generally determines the copayment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and financial results. Decreases in third-party reimbursement for our drug candidates or a decision by a third-party payor to not cover our drug candidates could reduce physician usage of our drug candidates, once approved, and have a material adverse effect on our sales, results of operations and financial condition. Coverage policies and third-party payor reimbursement rates may change at any time. Therefore, even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future.
Other Healthcare Laws
Because of our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors, we will also be subject to healthcare regulation and enforcement by the federal government and the state and foreign governments in which we will conduct our business, including clinical research, proposed sales, marketing and educational programs.
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The U.S. laws that may affect our ability to operate, among others, include: the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), which created federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors and knowing and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services, and governs the conduct of “covered entities,” including certain healthcare providers, health plans and healthcare clearinghouses, as well as their respective “business associates,” including their covered subcontractors, that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to certain electronic healthcare transactions and protecting the security and privacy of protected health information; certain state laws governing the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; the federal Anti-Kickback Statute, which prohibits, among other things, individuals or entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs; federal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other third-party payors that are false or fraudulent; federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; the Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to HHS information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members.
In addition, many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under Medicare, Medicaid and other state programs. Additionally, to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws.
Failure to comply with these laws, where applicable, can result in the imposition of significant penalties, including civil, criminal, and administrative penalties; damages, disgorgement, monetary fines, exclusion from participation in Medicare, Medicaid and other federal or state healthcare programs, imprisonment, and integrity oversight and reporting obligations.
Healthcare Reform
Current and future legislative proposals to further reform healthcare or reduce healthcare costs may result in lower reimbursement for our products. The cost containment measures that payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could significantly reduce our revenues from the sale of our products.
For example, implementation of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively the Affordable Care Act (“PPACA”), has substantially changed healthcare financing and delivery. Since its enactment there have been executive, judicial and congressional challenges to certain aspects of the PPACA. For example, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which narrowed access to PPACA marketplace exchange enrollment and declined to extend the PPACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired PPACA subsidies. In the United States, we expect that additional federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at HHS, the FDA, the United States Centers for Medicare & Medicaid Services (“CMS”) and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. For example, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a
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direct-to-consumer platform, U.S. patients in the United States and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs; (2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products; (3) imposing tariffs on imported pharmaceutical products; and (4) as part of the Make America Healthy Again (“MAHA”) Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. Additionally, the current administration recently called on Congress to enact "The Great Healthcare Plan," to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager (“PBM”) payment methodologies, among other things. These actions and policies may significantly reduce drug prices in the United States, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks. In June 2024, in Loper Bright Enterprises v. Raimondo, the United States Supreme Court greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program.
These and other reform initiatives may, among other things, result in modifications to the aforementioned laws and/or the implementation of new laws affecting the healthcare industry.
Human Capital Management
As of December 31, 2025, we had 23 full-time employees, the majority of whom were primarily engaged in research and development activities, including three individuals with MD degrees and eight professionals with PhD degrees specializing in the sciences. Many of these professionals have extensive epilepsy and neurology experience. In total, within our management team, we have colleagues who worked to shape the development or commercialization of a number of important marketed neurology drugs and ASMs, including: Zolgensma, Ztalmy, Fintepla, Brineura, Gilenya, Tysabri and Tecfidera.
We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees. We emphasize a number of measures and objectives in managing our human capital assets, including, among others: employee engagement, development and training, talent acquisition and retention, employee wellness, diversity and inclusion, and compensation, benefits and equity.
We believe that developing a diverse and inclusive culture is central to continuing to attract and retain the top talent necessary to deliver on our growth strategy. As such, we are investing in a work environment in which our employees feel inspired, included and enjoy a strong sense of belonging.
We value our employees’ curiosity to translate scientific discoveries into innovative medicines and their courage and perseverance to overcome obstacles and operate with a sense of purpose and urgency on behalf of patients. Grounded in these guiding principles, we believe we have developed a collaborative and highly engaged environment where our colleagues feel respected and valued, and can contribute to their fullest potential.
We maintain equity incentive plans that are designed to attract, retain and motivate selected employees, consultants and directors through the granting of equity-based compensation awards and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
In addition, our governance is overseen by an independent board of directors who provide and complement our expertise to execute the strategy and performance of our company. Among our board of directors, five out of seven members are independent. Collectively, our board of directors provides insight and expertise in areas of importance to the performance and growth of our enterprise, including experience as: senior operators of public companies; financial, transactional and oversight experience at public companies; proven biopharmaceutical experience; research and regulatory acumen in drug development; and corporate governance.
Facilities
We lease the space for our principal executive offices, located in Hudson Yards, New York City. In 2022, we formally instituted hybrid work policies. Our office facilities have received LEED Platinum certification.
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Corporate and Other Information
We were incorporated in Delaware in April 2014. Our principal executive offices are located at 441 Ninth Avenue, 14th Floor, New York, New York 10001 and our telephone number is (646) 661-7661. Our corporate website address is www.ovidrx.com. Information contained on or accessible through our website is not a part of this Annual Report on Form 10-K, and the inclusion of our website address in this Annual Report is an inactive textual reference only.
We file electronically with the Securities and Exchange Commission (“SEC”) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We make these filings available on our website (www.ovidrx.com) under “Investors,” free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC.