Ovid Therapeutics seems to have found its focus after a rough year: epilepsy. But the biotech will move toward this new direction with 20% fewer people at the company.
The company announced a reshaping of its organization and the sharpened focus on epilepsy- and seizure-related programs in a fourth-quarter earnings update Tuesday. The refocus will see the workforce reduced by 20%, which will help extend Ovid's cash runway beyond 2024. Meanwhile, Ovid plans to continue executing "disciplined transactions" in the form of licensing agreements or acquisitions with a focus on platform and delivery technologies that can bolster the company's small molecule and genetic epilepsy targets.
In a statement, CEO Jeremy Levin said the changes “ensure that Ovid has a focused team and substantial cash runway to execute on our strategy.”
The cost-cutting measures come as the company reported a more than $6 million uptick in administrative costs in 2021 compared to the year before. The company has been coasting thanks to a deal with Takeda for the epilepsy medicine soticlestat from March 2021, which could eventually exceed $850 million. Takeda expects a regulatory decision on the candidate sometime in fiscal year 2023, which could trigger a milestone payment for Ovid.
But Ovid has otherwise been weathering a major setback over the past year and has in recent months been working to get the ship pointed the right way again.
The company axed its lead program in the rare neuro-genetic disorder Angelman syndrome in April 2021 after the candidate failed to outperform placebo in a phase 2 trial. In an interview with Fierce Biotech after the program was shut down, Levin called the decision “heart-rending” and said resources had to be directed elsewhere given what the data revealed.
Last month, the asset was offloaded to Healx as part of a possible combination therapy for Fragile X syndrome.
The potential upside of the Takeda deal, combined with the early cash, has analysts from William Blair bullish that Ovid will be able to dig itself out of the clinical rut by reinvesting in its pipeline.
The newly focused epilepsy program will be based on two novel mechanisms of action for treating diseases that cause seizures, the company said in the earnings release. This includes assets from the biotech's portfolio collected through academic partnerships and other agreements.
Ovid took a step toward expanding its pipeline in January with a deal to license a library of early-stage molecules from AstraZeneca. This included the preclinical seizure candidate OV350. Ovid paid the British Big Pharma $12.5 million in upfront cash and stock on top of potential clinical and regulatory payments that could exceed $50 million.
Outside of its partnerships, Ovid has a GABA aminotransferase inhibitor called OV329 in preclinical development that is expected to launch into human trials sometime this year. Ovid is also hopeful that an almost-two-year-old research collaboration with Columbia University will be fruitful. In 2020, the two partnered up to identify potential molecular targets that can be progressed into therapies for rare neurological disorders.