Ovid Therapeutics Reports Business Update, Fourth Quarter and Full Year 2021 Financial Results
Ovidexecuting on its strategy to build a leading epilepsy pipeline
- OV329 expected to enter the clinic in 2022
- Organization reshaped to reduce personnel by 20% and increase operational efficiency
- Targeted business development continues to support the pipeline
Business Update and Strategy
- R&D strategy focused on novel epilepsy medicines:
Ovidis harnessing its deep expertise to advance two novel mechanisms of action for treating epilepsies. Additionally, the Company has secured a portfolio of genetic targets from academic collaborators, including Columbia University, which it believes will create the foundation for a world-class epilepsy pipeline.
- Financial strategy designed to reduce operating expenditures and extend runway: Today,
Ovidannounced it is reshaping the organization to focus primarily on the advancement of its epilepsy and seizure-related programs. The organizational changes are expected to both reduce the Company’s workforce by approximately 20% and extend the cash runway beyond 2024. See “Non-GAAP Financial Measures” below for a discussion of non-GAAP adjusted operating expenses.
- Business development strategy:
Ovidintends to continue executing disciplined transactions that align with its strategy, including acquiring or licensing assets, platform and delivery technologies that support its small molecule and genetic epilepsy targets. The Company also seeks to create value from prior programs. Recent activities include:
February 2022, Ovidentered an option agreement with Healx for an exclusive license to gaboxadol (OV101). Healx secured from Ovidan option to exclusively license rights to develop and commercialize gaboxadol (OV101). Healx has stated that it will investigate the compound as part of a potential combination therapy for Fragile X syndrome, as well as treatment for other indications.
February 2022, the Company entered into an exclusive patent license agreement with Marinus related to the use of ganaxolone in CDKL5. If Marinus’ New Drug Application (NDA) for ganaxolone is approved, Ovidwill be eligible to receive equity or cash at Ovid’s option, as well as potential single digit royalties on future net sales of ganaxolone in CDKL5. Ovidhas begun exploration of additional business development activities, including securing other compounds and out-licensing non-core programs.
Pipeline Updates & Anticipated Milestones
- Investigational New Drug Application (IND) of OV329 expected in 2022. OV329 is a GABA aminotransferase inhibitor with the potential to treat seizures associated with tuberous sclerosis complex and infantile spasms.
- Preclinical development of OV350, a direct KCC2 activator, is advancing. Building on experience with Takeda,
Ovidexpanded its epilepsy franchise by in-licensing a program from AstraZeneca that targets the KCC2 receptor, including lead candidate OV350. The Company intends to develop OV350 for the treatment of epilepsies. Takeda Pharmaceuticals, to which Ovidout-licensed soticlestat, has disclosed that it estimates soticlestat will receive regional regulatory decisions in its fiscal year 2023. Ovid is eligible to receive up to $660 millionin regulatory and commercial milestone payments, as well as royalties of up to 20% on global sales of soticlestat if it is approved and commercialized. These potential payments represent a possible non-dilutive cash stream, as Ovidhas no further financial obligations for soticlestat.
Fourth Quarter and Year-End December 31, 2021 Financial Results
- Cash and cash equivalents as of
December 31, 2021was $187.8 million.
- Revenue was zero and
$208.4 millionfor the fourth quarter and for the year ended December 31, 2021, respectively, as compared to $5.7 million and $12.6million for the same periods in 2020. The annual increase of $195.8 millionconsisted of the receipt of the one-time upfront payment of $196.0 millionpursuant to the Royalty, License and Termination Agreement with Takeda, and $12.4 millionrecognized in connection with the termination of the license and collaboration agreement with Angelini Pharma.
- Research and development expenses were $18.1 million and
$46.9 millionfor the fourth quarter and for the year ended December 31, 2021, respectively, as compared to $16.9 million and $63.4 million for the same periods in 2020. The annual reduction in expenditures was largely due to cessation of clinical development programs related to gaboxadol and soticlestat offset by the license acquisition cost for OV350.
- General and administrative expenses were $8.3 million and $37.2 million for the fourth quarter and year ended December 31, 2021, respectively, as compared to $10.4 million and $30.6 million for the same periods in 2020. The annual increase of
$6.6 millionprimarily consisted of increases in business development and professional services fees.
- The Company reported a net loss of $26.0 million, or basic and diluted net loss per share attributable to common stockholders of $0.38, for the fourth quarter of 2021, as compared to a net loss of $22.0 million, or basic and diluted net loss per share attributable to common stockholders of $0.34, for the same period in 2020. The Company reported net income of $122.8 million, or basic and diluted net income per share attributable to common stockholders of $1.78 and
$1.76, respectively, for the year ended December 31, 2021, compared to a net loss of $81.0 million, or basic and diluted net loss per share attributable to common stockholders of $1.39, for the year ended December 31, 2020.
- Operating expenses were $26.4 million in the quarter ended December 31, 2021, and non-GAAP adjusted operating expenses (which exclude non-recurring expenses and non-cash expenses; see table on Reconciliation of Non-GAAP Expenses) were $11.6 million for the quarter. The operating expenses were greater than the non-GAAP adjusted guidance of
$8.0– $10.0 millionrange for the quarter primarily due to increased business development costs. See “Non-GAAP Financial Measures” below for a discussion of non-GAAP adjusted operating expenses.
Non-GAAP Financial Measures
This press release presents non-GAAP adjusted operating expenses on a historical and projected basis. For the period presented, non-GAAP adjusted operating expenses exclude from operating expenses, as calculated and presented in accordance with GAAP, the following non-recurring and non-cash items: license acquisition costs; wind down of OV101 clinical costs; stock-based compensation. Non-GAAP adjusted operating expenses is a financial measure that has not been prepared in accordance with GAAP. Accordingly, investors should consider non-GAAP adjusted operating expenses in addition to, but not as a substitute for, operating expenses that we calculate and present in accordance with GAAP. Among other things, our management uses non-GAAP adjusted operating expenses to establish budgets and operational goals and to manage our business. Other companies may define or use this measure in different ways. We believe that the presentation of non-GAAP adjusted operating expenses provides investors and management with helpful supplemental information relating to operating performance and trends. A table reconciling non-GAAP adjusted operating expenses to operating expenses for all historical periods presented is included below under the heading “Reconciliation of Non-GAAP Adjusted Operating Expenses to Operating Expenses.” A quantitative reconciliation of projected non-GAAP adjusted operating expenses to operating expenses is not available without unreasonable effort primarily due to our inability to predict with reasonable certainty the amount of future stock-based compensation expense and non-recurring expenses.
Ovid Therapeutics Inc. is a New York-based biopharmaceutical company using its BoldMedicine® approach to develop medicines that transform the lives of patients with epilepsies and seizure-related disorders. Ovid’s current pipeline programs include: OV329, a small molecule GABA aminotransferase inhibitor for seizures associated with Tuberous Sclerosis Complex and Infantile Spasms; OV350, a direct KCC2 activator for potential treatment of epilepsies; OV882, a short hairpin RNA therapy approach for Angelman syndrome; OV815, a genetic therapy approach for KIF1A-associated neurological disorders; and other research targets. Additionally, Ovid maintains a significant financial interest in the future regulatory development and potential commercialization of soticlestat, which Takeda is responsible for advancing globally. Two Phase 3 trials for soticlestat in Dravet syndrome and Lennox-Gastaut syndrome are active. For more information on Ovid, please visit www.ovidrx.com.
This press release includes certain disclosures that contain “forward-looking statements,” including, without limitation, statements regarding the development of Ovid’s product candidate pipeline and achievement of expected near- and long-term milestones,
Condensed Consolidated Statements of Operations
|For the Three
|For the Three
|For the Year
|For the Year
|License and other revenue||$||-||$||5,703,187||$||12,382,779||$||12,617,221|
|License revenue - related party||-||-||196,000,000||-|
|Research and development||$||18,089,614||$||16,883,784||$||46,939,583||$||63,417,394|
|General and administrative||8,264,050||10,410,644||37,234,104||30,630,804|
|Total operating expenses||26,353,664||27,294,428||84,173,687||94,048,198|
|Income (loss) from operations||(26,353,664||)||(21,591,241||)||124,209,092||(81,430,977||)|
|Other (expense) income, net||3,901||(438,260||)||(45,690||)||395,401|
|Income (loss) before provision (benefit) for income taxes||(26,349,763||)||(22,029,501||)||124,163,402||(81,035,576||)|
|Provision (benefit) for income taxes||(349,714||)||-||1,328,818||-|
|Net income (loss)||$||(26,000,049||)||$||(22,029,501||)||$||122,834,584||$||(81,035,576||)|
|Net income (loss) per share, basic||$||(0.38||)||$||(0.34||)||$||1.78||$||(1.39||)|
|Net income (loss) per share, diluted||$||(0.38||)||$||(0.34||)||$||1.76||$||(1.39||)|
|Weighted-average common shares outstanding basic||68,159,651||64,004,719||67,479,403||58,451,293|
|Weighted-average common shares outstanding diluted||68,159,651||64,004,719||68,067,992||58,451,293|
Select Condensed Balance Sheet Data
|Cash and cash equivalents||$||187,797,532||$||72,033,930|
|Total stockholder's equity||179,746,436||43,631,656|
|1Working capital defined as current assets less current liabilities|
Reconciliation of Non-GAAP Adjusted Operating Expenses to Operating Expenses
|Three Months Ended
|Non-recurring and non-cash items included therein:|
|License Acquisition Costs expensed to R&D||$||12,300,000||$||12,300,000|
|Legal and professional fees related to License Acquisition||$||745,503||$||745,503|
|Wind-down of OV101 clinical costs||345,454||6,855,021|
|Non-GAAP adjusted operating expenses||$||11,647,509||$||59,218,706|
Investors and Media:
i French JA. Refractory epilepsy: clinical overview. Epilepsia. 2007;48 Suppl 1:3-7. doi: 10.1111/j.1528-1167.2007.00992.x. PMID: 17316406.
Source: Ovid Therapeutics Inc.