Ovid Therapeutics (NASDAQ:OVID) has focused on brain disorders for several years now, and the company has just released new information about its two leading candidates. The report, dated August 13, reveals that Ovid has traded an older asset for future payments, a deal intended to support the development of its next two major programs.
As of June 30, cash on hand stood at $169.8 million, according to the filing. The company says that figure funds operations into 2029.
OV4071 and OV329 Are the Leads
The key update centers on Ovid’s two lead compounds and their advancing clinical work. OV4071 stands as the first oral drug designed to activate KCC2 directly, currently enrolled in a Phase 1 trial with healthy volunteers. Results from that trial should back a planned Phase 2 proof-of-concept trial for acute schizophrenia, set for 2027.
In the second half of 2026, Ovid has planned a ketamine challenge study of OV4071. Its purpose is to examine biomarkers linked to schizophrenia and associated disorders.
OV329 is a newer GABA-AT inhibitor, and it has moved into a Phase 2 randomized, placebo-controlled study for people with treatment-resistant focal onset seizures. This global trial is described by the company as having the kind of rigor needed for registration approval. The company expects the trial to wrap up in the second half of 2027.
The Deal That Hands Off an Asset
A new company created by Perceptive Advisors has taken over Ovid’s soticlestat program. Through that deal, it gained worldwide rights to the drug from both Ovid and Takeda, while Ovid kept equity and milestone rights for itself.
Under the deal, Ovid could collect up to $294.5 million in combined clinical, regulatory, and commercial milestones plus royalties should the drug make it to market. However, Ovid no longer holds direct control over the program. A share of any future milestone payments is due to Ligand through an existing royalty arrangement, which means Ovid’s upside is now limited to royalties and milestones instead of direct commercial gains.
The Funding Picture Gets Heavier
The cost of keeping that pipeline running has risen sharply. Research and development spending increased to $10.0 million for the quarter from $6.5 million a year earlier, due largely to stepped-up preclinical and clinical work on OV329 and OV4071. Administrative expenses also rose, climbing to $6.5 million from $4.9 million during the same stretch.
Total operating expenses reached $16.4 million, up from $11.3 million in the second quarter of 2025. The net loss widened to $15.0 million, or $0.08 per share, from $4.7 million, or $0.06 per share, a year prior.
What Still Needs to Happen
Several milestones still remain for the OV329 program. One distinct photosensitivity study, which examines OV329 at doses of 5, 7 and 9 milligrams, is expected to conclude near the close of 2026. A proof-of-concept study targeting tuberous sclerosis complex-associated seizures is scheduled to start in the fourth quarter of 2026, before a planned 2027 study into infantile spasms follows.
| Program | Status | Timeline |
|---|---|---|
| OV4071 Phase 1 | Ongoing | Healthy volunteers |
| OV4071 ketamine challenge | Planned | Second half of 2026 |
| OV4071 Phase 2 proof-of-concept | Expected to support | Acute schizophrenia, 2027 |
| OV329 Phase 2 | Ongoing | Treatment-resistant focal onset seizures |
| OV329 photosensitivity readout | Due | Near end of 2026 |
| OV329 tuberous sclerosis proof-of-concept | Set to begin | Fourth quarter 2026 |
| OV329 infantile spasms | Planned | 2027 |
The Share Count Rose
In April, the company’s share count rose due to the expiration of Series A warrants from a private placement made in October 2025. Investors exercised their rights for 33,597,860 shares of common stock at $1.40 apiece, alongside 4,883,465 pre-funded warrants at $1.399 each, which brought in roughly $53.9 million but also increased the number of shares outstanding.
What This Update Shows
To raise money and keep OV4071 and OV329 alive, Ovid traded away control of soticlestat. The Phase 2 data from OV329 will test if the program can meet its registration goals, while the ketamine challenge study for OV4071 will reveal whether the biomarker strategy works.
The growing losses serve as a cautionary signal. Increased spending on R&D and G&A has pushed the net loss up significantly compared to last year. However, cash reserves remain solid, and Ovid says the $169.8 million covers operating costs through 2029.
Here is how the pipeline stands:
- OV4071 is in an ongoing Phase 1 study in healthy volunteers, with data expected to support a 2027 proof-of-concept study in acute schizophrenia.
- OV329 is in an ongoing Phase 2 study in treatment-resistant focal onset seizures, with completion expected in the second half of 2027.
- The ketamine challenge study of OV4071 is planned for the second half of 2026.
- The OV329 photosensitivity readout is due near the end of 2026.
- The OV329 tuberous sclerosis proof-of-concept study begins in the fourth quarter of 2026, ahead of a 2027 infantile spasms study.
The next data releases will reveal whether the two lead programs are still on schedule.