ovid-20231231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 10-K

_________________________________

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2023

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File Number: 001-38085

__________________________________

Ovid Therapeutics Inc.

(Exact name of Registrant as specified in its charter)

__________________________________

Delaware

2834

46-5270895

(State or Other Jurisdiction of

Incorporation or Organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

441 Ninth Avenue, 14th Floor

New York, New York 10001

(646) 661-7661

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

OVID

The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

_____________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:


Large Accelerated Filer	o	Accelerated Filer	o
Non-accelerated Filer	x	Smaller Reporting Company	x
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x

As of June 30, 2023, the last day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately $191.1 million based on the closing price of the registrant’s common stock on June 30, 2023. The calculation excludes shares of the registrant’s common stock held by current executive officers, directors and stockholders that the registrant has concluded are affiliates of the registrant. This determination of affiliate status is not a determination for other purposes.

As of March 5, 2024, there were 70,709,857 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for its 2024 Annual Meeting of Stockholders, which the registrant intends to file pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K.

TABLE OF CONTENTS


		Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		1

	PART I
Item 1.	Business	3
Item 1A.	Risk Factors	25
Item 1B.	Unresolved Staff Comments	60
Item 1C.	C ybersecurity	60
Item 2.	Properties	61
Item 3.	Legal Proceedings	61
Item 4.	Mine Safety Disclosures	61

	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	62
Item 6.	[Reserved]	63

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	63
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 8.	Financial Statements and Supplementary Data	71
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	71
Item 9A.	Controls and Procedures	71
Item 9B.	Other Information	71
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	71
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	72
Item 11.	Executive Compensation	72
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	72
Item 13.	Certain Relationships and Related Transactions, and Director Independence	72
Item 14.	Principal Accountant Fees and Services	72

	PART IV
Item 15.	Exhibit and Financial Statement Schedules	73
Item 16.	Form 10-K Summary	76

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of this Annual Report on Form 10-K. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” or the negative or plural of those terms, and similar expressions.

Forward-looking statements include, but are not limited to, statements about:

•our ability to identify additional novel compounds with significant commercial potential to acquire or in-license;

•our ability to successfully acquire or in-license additional drug candidates on reasonable terms;

•our estimates regarding expenses, future revenue, including any royalty or milestone payments, capital requirements and needs for additional financing;

•our ability to obtain regulatory approval of our current and future drug candidates;

•our expectations regarding the timing of clinical trials and potential regulatory filings;

•our expectations regarding the potential market size and the rate and degree of market acceptance of such drug candidates;

•our ability to fund our working capital requirements;

•the implementation of our business model and strategic plans for our business and drug candidates;

•developments or disputes concerning our intellectual property or other proprietary rights;

•our ability to maintain and establish collaborations or obtain additional funding;

•our expectations regarding government and third-party payor coverage and reimbursement;

•our ability to compete in the markets we serve;

•the impact of government laws and regulations;

•developments relating to our competitors and our industry;

•the impact of geopolitical tensions, including war or the perception that hostilities may be imminent, adverse global economic conditions, terrorism, natural disasters or public health crises on our operations, research and development and clinical trials and potential disruption in the operations and business of third parties and collaborators with whom we conduct business; and

•the factors that may impact our financial results.

Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1A, “Risk Factors,” herein and for the reasons described elsewhere in this Annual Report on Form 10-K. Any forward-looking statement in this Annual Report on Form 10-K reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs and consumer products, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources and

we have not independently verified the data from third party sources. In some cases, we do not expressly refer to the sources from which these data are derived.

In this Annual Report on Form 10-K, unless otherwise stated or as the context otherwise requires, references to “Ovid,” “the Company,” “we,” “us,” “our” and similar references refer to Ovid Therapeutics Inc. and its wholly owned subsidiary. This Annual Report on Form 10-K also contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

PART I

Item 1. BUSINESS

Overview

Ovid is a biopharmaceutical company that is dedicated to meaningfully improving the lives of people affected by certain epilepsies and brain conditions with seizure symptoms. We believe that addressing these disorders represents a substantial scientific, medical and commercial opportunity. Over the last decade, scientific understanding of the underlying biology of neuronal hyperexcitability and the related pathophysiology of epilepsy and many neurological disorders has improved. This understanding of disease, coupled with advances in preclinical research tools, is improving the predictive potential of translational research, and thereby, may increase the probability of successful clinical development of anti-seizure medicines (“ASMs”). Emerging science also indicates that addressing the underlying causes of hyperexcitability may have therapeutic applications in broad neurological disease well beyond epilepsy.

The large global epilepsy market opportunity reflects significant unmet medical need and economic potential. Epilepsy therapeutics today represent an approximately $8 billion market globally. Evidence supporting the opportunity includes the number of recent acquisitions of epilepsy assets and companies, several of which have been acquired for values greater than $1.0 billion. The unmet need of people affected by seizures remains significant. Approximately three million Americans live with epilepsies today and approximately 50 million people suffer from epilepsy worldwide.

We have proven capabilities and expertise in the successful clinical development of ASMs. We have applied our knowledge to build a differentiated pipeline of medicines with potential first-in-class or best-in-class drug mechanisms of action (“MoA”) to treat epilepsies and brain disorders with seizure symptoms. Our pipeline has produced three programs with potential first-in-class MoAs, and one program with a potential best-in-class MoA. Currently, three of these programs are in clinical trials in humans. The fourth is in preclinical studies and is anticipated to advance into human safety studies in 2024. An overview of these programs includes:

•Soticlestat, a novel cholesterol 24 hydroxylase (“CH24”) inhibitor, which is currently being evaluated in two pivotal Phase 3 trials for Dravet syndrome and Lennox-Gastaut syndrome by Takeda Company Limited (“Takeda”). Takeda purchased our rights to soticlestat, and is conducting the pivotal trials. We maintain a significant financial interest in the potential approval and commercialization of soticlestat via potential regulatory and commercial milestones of up to $660.0 million and net sales-based royalty payments from low double digits up to 20%. We sold a 13% stake in the royalty, regulatory and commercial milestone payments that we are eligible to receive from Takeda to Ligand Pharmaceuticals Incorporated for $30.0 million.

•OV888 (GV101), a highly selective inhibitor of rho associated coiled-coil containing protein kinase 2 (“ROCK2”), which is being developed as a potential first-in-class medicine to treat cerebral cavernous malformations (“CCM”), of which seizures are among common symptoms. OV888 (GV101) is completing a Phase 1 double-blind, multiple-ascending dose trial and is expected to initiate its Phase 2 program in 2024. A higher dose cohort has been added to the Phase 1 trial and no serious adverse events have been observed.

•OV329, a highly potent next-generation GABA-aminotransferase inhibitor (“GABA-AT”), that is thought to potentially deliver preferable seizure reduction and dosing relative to prior medicines in the class. An oral formulation of OV329 is currently being evaluated in a Phase 1 study that uses biomarkers for efficacy and target engagement. An intravenous formulation of OV329 is also in development for acute seizures and is expected to enter human safety studies in 2025.

•OV350, a potential first-in-class direct activator of the central nervous system (“CNS”), specific K-Cl co-transporter (“KCC2”) and is the most advanced of a unique portfolio of drugs leads which are direct KCC2 activator compounds. Oral and intravenous (“IV”) formulations of several of these compounds have been prepared and have demonstrated activity in multiple preclinical disease models. We expect to file the first investigational new drug application (“IND”) from this portfolio in 2024. We believe this portfolio has the potential to deliver multiple INDs over the years to come.

Collectively, these development programs are anticipated to create a range of value-creating milestones in the near- and mid-term for investors.

The Opportunity: Epilepsies and Neurological Disorders

Although it is one of the earliest known maladies documented by humanity four millennia ago, epilepsy remains a common, and often intractable, medical diagnosis. Approximately 50 million people globally experience epilepsy, including an estimated three million adults living with epilepsy in the United States.

While modern drug discovery efforts have produced more than 30 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 forms of refractory epilepsies may experience persistent seizure rates ranging from 50 - 90%. The seizures they suffer can have a devastating impact both upon patients and their families, by triggering permanent motor, cognitive and developmental delays, as well as epileptogenesis, which is a cascade of seizures begetting more seizures. Some patients with developmental epileptic encephalopathies experience even greater rates of refractory seizures that are resistant to drug therapy.

With an estimated 70% of epilepsy diagnoses occurring in people less 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, and persistent rates of breakthrough seizures, signal the urgent need for effective new medicines. For these patients, new mechanisms of action that demonstrate improved efficacy, safety and tolerability profiles are optimal, as they may be more easily incorporated into existing treatment regimens without the fear of drug-to-drug interactions (“DDIs”).

Scientific progress, including the availability of genetic testing, improved radiographic scanning tools, and more accurate means of measuring non-seizure symptoms are illuminating the underpinning seizure disorders. The great unmet medical need and scientific advancements have set the stage for a potential era of neurotherapeutics, which we believe will be led by ASMs.

The Ovid Strategy

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 means that key areas of unmet need, including many epilepsies and seizure disorders, are now addressable and offer significant medical potential. Our team has proven expertise in understanding MoAs that underlie seizures and shaping potential therapies to treat rare epilepsies and disorders with seizures. Specifically, we have built a pipeline focused on treating the extrinsic or intrinsic causes of neuronal hyperexcitability. This know-how affords us an ability to build Ovid in a manner focused on delivering successive, novel medicines for epilepsies and seizure-related neurological conditions.

Our strategy is to create sustainable, long-term value by advancing an exciting and differentiated pipeline of small molecules that culminates in a fully integrated neurotherapeutics company with multiple commercial medicines and clinical stage programs. Over time, we intend to seek to expand our current pipeline of predominantly ASMs to include additional franchises of neurology programs via focused clinical development and business development activities. This corporate strategy is underpinned by specific research and development, financial and business development strategies. In addition, our Company seeks to protect shareholder value by creating multiple sources of potential revenue via clinical and commercial milestones from our pipeline, strategic collaborations and partnerships.

Our approach to building an epilepsy franchise has already resulted in success, namely the development and subsequent repurchase of our rights to soticlestat by Takeda. In 2017, we in-licensed a 50% stake in soticlestat for $26.0 million, and further invested $57.0 million in designing and executing soticlestat’s early and mid-stage clinical trials. In 2021, following encouraging Phase 2 findings, which we delivered six months ahead of schedule, we entered into a Royalty, License and Termination Agreement (“RLT Agreement”) through which we sold back our rights to soticlestat to Takeda. The RLT Agreement provided us with $196.0 million paid in Q1 2021 and, if soticlestat is approved and successfully commercialized, we are eligible to receive up to $660.0 million in sales and regulatory milestone payments and low double-digits up to 20% of potential net sales-based tiered royalty payments. The RLT Agreement provides us with a potential stream of non-dilutive capital. The funds received from this transaction have enabled us to invest in and secure what we believe is a world-leading pipeline during a period when we believe the cost of capital would have been unduly expensive. In 2023, we sold a 13% stake in the royalty, regulatory and commercial milestone payments that we are eligible to receive under the RLT Agreement to Ligand Pharmaceuticals Incorporated (“Ligand”) for $30.0 million.

Our near-term strategy is focused on building a franchise of potential small molecule medicines to treat certain epilepsies and conditions with seizure symptoms. In alignment with this focus, in 2023, we made the decision to both out-

license and halt certain non-core activities, including several preclinical genetic medicines programs. For additional information see the section below under the heading “Genetic Research Programs.” We simultaneously streamlined our organization and reduced headcount related mostly to the genetic programs.

Expert Team and Fit-for-Purpose Infrastructure

We have built a highly specialized, efficient, and focused infrastructure that supports us in our chosen area of neurotherapeutics development. This infrastructure spans the critical domains of research and development, commercial and market access strategy. Importantly, it positions us to be a potential partner of choice for leading biopharmaceutical companies who wish to pursue valuable drug candidates and research platforms in neurology.

We have recruited a team of professionals with deep subject-matter expertise in seizures and neurological conditions. This includes epileptologists, physicians, academic scientists, commercial and biopharmaceutical industry leaders. In total, we have five individuals with M.D. degrees and 13 professionals with Ph.D. degrees specializing in the sciences. Our operational and commercial leaders have extensive experience fostering market access and sales for leading neurological medicines. In total, our team’s collective professional experience has involved the successful development or commercial launch of more than 25 CNS medicines, including several epilepsy products.

Our cohesive focus in epilepsies and conditions with seizure symptoms, clear strategy reinforced by our professional experience and pipeline of differentiated assets, gives us confidence we can succeed in our mission.

Research & Development Strategy: Potential First-In-Class or Best-in-Class Mechanism of Action

Our research and development strategy is focused on designing medicines that can ameliorate neuronal hyperexcitability and return neurons to a state of homeostasis, or “electrophysiological balance.” Many factors can contribute to neuronal hyperexcitability including those extrinsic to the cell such as anatomical abnormalities, trauma, and even infectious disease. Other factors are intrinsic to the neuron (for example, genetic conditions or the disruption of neuronal metabolism) and others (for example lack of stimulus of the GABA receptor) are caused by imbalances outside the surface of the neuron. Whatever its origin, imbalance of electrophysiological homeostasis and resultant neuronal hyperexcitability manifests in a range of debilitating neurological conditions, including seizures and epilepsies.

Treatment of epilepsy and seizures today often requires multiple medicines. Whereas some epilepsy developers expressly focus on one biological target, we believe that until a definitive cure for epilepsy is discovered, multiple MoAs will be needed to successfully treat the heterogeneous causes of seizures. Accordingly, our pipeline seeks to curate and develop a unique set of compounds that can be effective by itself and/or can provide the necessary intervention to impact multiple mechanisms. We believe this approach has the potential to provide the basis of a modern differentiated and leading epilepsy franchise. Core tenets of our approach include a focus on:

•Small molecule compounds. Ovid’s pipeline is comprised of small molecule programs that can potentially be delivered as a pill, injection, or intravenously. Recent advances in synthetic methodology, formulation technology, generative artificial intelligence and biology target research have unlocked more opportunities for innovative and creative medicines. The compounds we seek to develop are brain-permeable and are designed to modulate specific biological targets. We seek to take advantage of the versatility small molecules have to offer in terms of manufacturing, chemistry, and dosing to potentially deliver novel and next-generation medicines that will make meaningful improvements in the lives of patients.

•Unique biological targets implicated in neuronal regulation. There is compelling evidence that the novel targets we pursue directly or indirectly modulate hyperexcitability. These targets are associated with regulating inherent intracellular excitatory/inhibitory balance within neurons.

•Differentiated potential first-in-class or best-in-class mechanisms of action. We cultivate a pipeline of potential first-in-class or potential best-in-class MoAs to intercept and mitigate the underlying cause of seizures or brain disease. Collectively, our differentiated pipeline has produced four active potential value-creating drug programs. Several of these therapeutic development programs (soticlestat, OV888 (GV101) and OV329) seek to affect metabolic, signaling, and enzymatic pathways to modulate extrinsic causes of hyperexcitability, thereby restoring neural balance. In essence, they seek to change the environment surrounding the neuron. Our KCC2 mechanisms of action act on the intrinsic excitability of the neuron.

•Sentinel indication clinical development. Our drug development approach generally pursues rare, resistant conditions as initial “sentinel” indications. Pursuing rare acute conditions can enable us to demonstrate the rapid proof-of-concept (“POC”) for our compounds, while additionally 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. Simply put, effective therapeutic outcomes in highly pharmaco-resistant indications often bodes well for treating broader neuropathologies.

•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. As noted above, for neurology patients and clinicians who must regularly manage side effects associated with polypharmacy regimens, it is preferable to have medicines that are well tolerated and exhibit few DDIs. In addition, we strive to impact the broader symptomatology of disease, including for example, the measurement of behavior and communication change.

As the field of ASM advances, we believe connections may be established between the root cause of hyperexcitability and other neurological conditions affecting larger populations. These include neuropsychiatric and neuro degenerative disorders and pain. However, our strategy focuses initially on evaluating our investigational medicines for pathways and targets impacting rare brain conditions. If effective in rare disease, our intent is to explore expanding on that success to broader conditions of the brain for which the MoA may hold therapeutic relevance. Accordingly, in the future, we expect to be able to extend our knowledge and drug programs to other neurological conditions. This approach is supported by research indicating that more than ten ASMs are used in treatment of other (non-epilepsy) neurological diseases today.

Scientifically Driven

We take a scientifically driven approach to identify promising drug candidates for our pipeline. 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/or clear endpoints, for study in clinical trials. As we advance our drug candidates through nonclinical and clinical evaluation, we apply a systematic approach for de-risking compounds using emerging tools, animal models and trial designs. This paradigm is continuously informed and refined with emerging scientific and clinical insights to strengthen and de-risk development for prospective programs and trials.

Specifically, our approach is driven by the following scientific principles:

•Pursuit of validated and emerging targets. We are building a pipeline of therapeutic development programs representing distinct MoAs, including validated and emerging biological targets in epilepsy and neurovascular disorders such as CCMs. We seek to target biological pathways or genes for which POC has already been established via in vitro or animal models. Additionally, we prioritize targets that are either uniquely (1) expressed in the CNS, such as: CH24 and KCC2 co-transporters or (2) over-expressed in a pathological state, such as ROCK and GABA-AT.

•Blood brain barrier (“BBB”) penetration. The brain is one of the most difficult organs in the body to treat, in part due to the challenge of penetrating the BBB. Ovid’s drug development programs include potential small molecule therapies that demonstrate penetration of the BBB.

•Clinically translatable preclinical models. Recent advances in genetics enable us to employ predictive in vitro and in vivo genetic models of specific brain diseases. We believe these predictive models will allow us to evaluate and observe a drug candidate’s potential activity prior to initiation of human trials. Applying these models, we believe we will be able to select the most relevant indication and seizure endpoints for our studies and increase the potential for clinical success.

•Clear primary endpoints and scales. We primarily focus on disorders that are characterized by epilepsy-related symptoms and seizures. Many seizure types afford clear observable endpoints and biomarkers that help capture and measure evidence of the clinical impact of our drug candidates. Our team of development experts has extensive experience designing scales to measure other symptoms that are common among seizure-disorders, such as cognitive declines, movement deficiencies and behavioral manifestations. These skills support our desire and ability to develop medicines that may provide a clinical benefit across multiple aspects of patient health.

•Trial design enables early observation of proof-of-concept. By employing surrogate biomarkers and endpoints that are highly relevant and designed to detect meaningful clinical benefits, we anticipate that many of our studies may provide early POC in clinical development, thereby directing the use of our capital to projects with higher probability of later-stage success.

•Motivated and accessible patient populations. We are targeting our programs for disorders with motivated and accessible patient populations. We believe that the patients and caregivers affected by epilepsies and brain disorders have increasing access to diagnostics and genetic testing. Additionally, many are avid users of social media, through which they learn new insights about their conditions and share relevant information and experiences. We conduct patient disease community outreach and activities on digital platforms to efficiently identify new patients for our clinical trials, raise disease awareness and help connect with patients and caregivers.

Pipeline Enhanced by Academic Collaborations and Disciplined Business Development

To support our strategy we continue to enhance and expand our pipeline via two complementary efforts: (1) internal research and development efforts in collaboration with external leaders in the field and academic collaborators; and (2) business development activities to partner assets that have promising potential in and outside our chosen therapeutic areas.

Ovid conducts focused internal drug discovery, which helps us maintain lower costs for laboratory facilities. We identify compounds with what we believe is untapped value sitting in other organizations’ pipelines and look to in-license or enter into collaborative agreements to secure such assets and advance clinical development. This strategy directs our efforts where we excel at creating value, which is specifically shaping translational and clinical-stage development in our therapeutic area. An integral part of our process is establishing collaborations with academic research centers to support translational expertise for our programs, including the Stephen Moss Lab of Neuropharmacology at Tufts University.

The multiple programs in our diversified pipeline create optionality to pursue disciplined 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.

Patient-Focused

Ovid is developing product candidates that we hope will create new possibilities and more good days for people living with rare epilepsies and brain conditions. For example, we believe that our therapeutic candidates may be able to meaningfully reduce harmful seizures, mitigate burdensome symptoms, and potentially slow down the underlying progression of disease.

Patient communities are critical to informing every aspect of our approach. Each disorder for which we are developing potential neurotherapeutics is a condition that carries serious risk of morbidity and requires extensive and specialized involvement from the patients’ families, caregivers, physicians and from patient advocacy groups.

Our strategy is enhanced by the following patient-focused principles:

•pursue under-addressed rare conditions that can be evaluated via scaled clinical trials;

•develop close relationships with patient communities, caregivers, families, disease foundations and key opinion leaders, to better understand the history of these disorders, raise awareness, identify patients and facilitate enrollment of clinical trials;

•identify clinically meaningful endpoints, including seizures, symptoms, and cognitive and behavioral scales that are based on input from the patient communities and their physicians and caregivers; and

•develop digital capabilities to be deeply informed and engaged with the patient communities we serve.

Financial Strategy

We are focused on delivering long-term value for shareholders. Our financial strategy seeks to apply our capital in a focused manner to advance a differentiated pipeline of neurotherapeutics, which we believe may generate multiple value-creating milestones from data and ultimately, commercial sales.

Management believes that we have sufficient cash on hand to fund Ovid's operations into the first half of 2026. To achieve this cash runway, in October 2023, we sold 13% of our interest in the milestones and royalties that we are eligible

to receive from soticlestat's potential approval and commercialization to Ligand for $30.0 million. We retain 87% interest in soticlestat's regulatory and commercial milestones and royalties on sales if the drug is successfully approved and commercialized by Takeda. These future payments may contribute to funding our operations and business development activities. For additional information, see the description of the Ligand Agreement below under the heading “License and Collaboration Agreements – 2023 Ligand Pharmaceuticals Milestones and Royalties Monetization.”

Ovid Pipeline

Our efforts have already brought drug candidates from POC into human clinical trials. Today, we are one of the few companies that has researched and developed three distinct MoAs to target seizures and one of the only clinical development programs to evaluate a highly selective ROCK2 inhibitor for neurological disease. We believe this pipeline of potential first-in-class or potential best-in-class mechanisms differentiates us and provides the basis of an attractive franchise of potential small molecule neurotherapeutics.

The following table (Figure 1) sets forth our drug candidate programs and their development status, MoA, and anticipated near-term milestones:

Figure 1. Ovid Therapeutics Pipeline

Soticlestat: Eligible for Non-Dilutive Capital from Takeda Pharmaceuticals

We retain significant financial interest in soticlestat, a novel CH24 inhibitor for the potential treatment of patients with resistant epilepsies, following our role in its successful early and mid-stage development program. We believe soticlestat has the potential to become a first-in-class medicine targeting the metabolism of cholesterol in the brain. It has been shown to gradually reduce inflammation in the brain as well as indirectly acting on the N-methyl D-aspartate pathway. We believe that this dual mechanism plays an important role in modulating excitatory signals involved in epilepsy, and thereby suppressing seizures.

Soticlestat is currently being studied by Takeda in two global, pivotal Phase 3 trials for people living with Lennox-Gastaut syndrome (“LGS”) and Dravet syndrome (“DS”). Takeda has stated two pivotal Phase 3 clinical trials studying soticlestat as a treatment for Lennox-Gastaut syndrome and Dravet syndrome completed enrollment, and it anticipates topline data readout by September 2024. Takeda has stated that it anticipates filing soticlestat for regulatory approval in its fiscal year 2024 (April 2024 – March 2025). If soticlestat receives regulatory approval and is commercialized, under the RLT Agreement, we are eligible to receive regulatory and commercial milestones payments of up to $660.0 million, in addition to potential net sales based tiered royalties of up to 20%. In 2023, we sold a 13% stake in the royalty, regulatory and commercial milestone payments that we are eligible to receive under the RLT Agreement to Ligand for $30.0 million. Royalty payments are eligible on net sales across all regions and all future indications. The future milestones payments do not include an initial upfront payment that we received from Takeda in March 2021 of $196.0 million.

Background on Takeda Royalty, License & Termination Agreement

The soticlestat development program began in January 2017 as a license and collaboration agreement between us and Takeda for rare epilepsies. Under this original agreement, Ovid held a 50% ownership stake in soticlestat and Takeda retained the remaining 50%. Following a successful Phase 2 development program led by us, in March 2021, we entered into the RLT Agreement. Under the terms of the RLT Agreement, we terminated our original collaboration agreement with Takeda, and Takeda subsequently secured an exclusive license and intellectual property rights to repurchase our 50% share in soticlestat. In exchange, we received an upfront payment of $196.0 million. In addition, if soticlestat achieves regulatory approval, and is successfully commercialized, we are eligible to receive up to an additional $660.0 million in regulatory and commercial milestone payments and potential tiered royalties on net sales of soticlestat at percentages ranging from the low double-digits up to 20%, subject to standard reductions in certain circumstances. Royalties are payable on a country-by-country and product-by-product basis during the period beginning on the date of the first commercial sale of such product and ending on the expiration of patent rights in such country.

As a result of this agreement, Takeda secured all the global rights to develop and commercialize soticlestat for the treatment of developmental and epileptic encephalopathies, including DS and LGS. In addition, Takeda has assumed responsibility for all development and commercialization costs associated with soticlestat. We have no ongoing costs or obligations.

OV888 (GV101) – A highly selective ROCK2 inhibitor

In May 2023, we invested in and entered a collaboration with Graviton Bioscience Corporation (“Graviton”) to develop a portfolio of highly selective inhibitors of ROCK2 for the treatment of rare neurological conditions. The collaboration includes the development of lead program OV888 (GV101), which is a small molecule ROCK2 inhibitor that is currently completing a Phase 1, double-blind multiple-ascending dose trial. The trial is progressing on track, a higher dose has been added and no serious adverse events have been reported. For additional information, see the description of the Graviton collaboration agreement below under the heading “License and Collaboration Agreements – 2023 In-licensing and Collaboration Agreement with Graviton Bioscience Corporation.”

OV888 (GV101) is a potent, BBB penetrant inhibitor that is highly selective for ROCK2. ROCK2 is expressed abundantly in skeletal muscles and in the brain and is believed to primarily function to regulate intracellular cytoskeletal organization. We believe that the ROCK2 signaling pathway may be hyperactivated in multiple neurological diseases, including disorders involving vascular structures and nerve myelination diseases that can result in seizures, spasms and a variety of other symptoms. Despite this link, there has been limited clinical development of ROCK2 inhibitors due to challenges penetrating the BBB and the inherent challenge of avoiding inhibition of rho-associated coiled-coil-containing protein kinase 1, which can have unwanted side effects.

The initial indication for OV888 (GV101) is anticipated to be CCM for which there is strong mechanistic evidence for inhibiting ROCK2 (see Figure 2 below). CCMs are one of the most common intracranial vascular malformation in humans, presenting as mulberry-shaped abnormal blood vessels with thin, leaky walls located in the brain and or spinal cord. It is thought CCMs affect approximately 1:250 individuals. At diagnosis, the majority of CCM patients present symptomatically with hemorrhage, focal neurologic deficit and/or seizures, which reflect areas of core competency for our development acumen.

To date, preclinical and human safety studies evaluating OV888 (GV101) have shown it has a favorable toxicology profile with no serious adverse events reported. We anticipate initiating the Phase 2 program for OV888 (GV101) in the second half of 2024. Throughout OV888's (GV101) clinical development, we intend to harness the expertise held by the team at Graviton, who previously pioneered the development of Rezurock, the first approved ROCK2 inhibitor for graft vs. host disease.

Figure 2. Believed mechanism of action for OV888 (GV101) in CCM

OV329 – A next-generation GABA-AT inhibitor

OV329 is an investigational, next-generation GABA-AT inhibitor that we are developing for the treatment of adult and pediatric epilepsy disorders. OV329 represents a potential best-in-class GABA-AT inhibitor and was designed to supplant vigabatrin, which is an approved therapeutic in the United States and European Union for the treatment of infantile spasms. Vigabatrin has demonstrated substantial seizure reduction, which led to sales of more than $300 million by Lundbeck in the United States alone. However, vigabatrin's clinical and commercial use has been limited by lack of a therapeutic window. Specifically, vigabatrin has generated deleterious 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 and inhibition profile than vigabatrin. We have observed OV329 to deliver increased potency and efficiency in the target binding site and has been shown in our preclinical research to be more than 200-fold more potent. We are actively studying two formulations of OV329: (1) an oral formulation for chronic seizures, which is currently in a Phase 1 trial and 2) an intravenous formulation for acute seizures, which is being readied for an IND (or an equivalent regulatory application) expected in late 2024. We believe that OV329 has the potential to be therapeutic in refractory and drug-resistant epilepsies such as seizures associated with tuberous sclerosis and refractory status epilepticus (“SE”).

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. Given that epilepsy is characterized by excessive neuronal excitation, the increased levels of GABA may suppress this excitatory signaling and may reduce seizures.

OV329 oral formulation

Based upon preclinical data supporting OV329, we believe that the oral formulation has the potential to provide (in comparison to vigabatrin) preferred (lower) dosing. We believe that these preclinical data suggests that OV329 could allow for seizure reduction efficacy and improved tolerability in comparison to existing therapeutics.

To support this profile, seven animal seizure models presented at medical conferences in 2022 and 2023 demonstrate the seizure reduction potential of OV329 (see Figure 3 below). These findings in both chronic and acute seizure models provide additional confidence about the therapeutic potential of OV329 in humans.

Figure 3. Seven preclinical animal models reaffirm OV329 seizure reduction activity, including resistant seizure models

SEC Form 10-K filed by Ovid Therapeutics Inc.