Ovid Therapeutics Inc.

Previous wording

We are a biopharmaceutical company dedicated to developing small molecule medicines for brain conditions with significant unmet need. Our approach to achieve this goal is scientifically driven, patient focused, and coupled with an integrated and disciplined approach to research, clinical development and business development. Our team has significant experience with and understanding of epilepsies and other neurological conditions, and we continue to gain insight into the ways the different molecular mechanisms and pathways underlying these disorders impact the symptoms patients experience. We have developed a differentiated pipeline of drug candidates containing three novel MoAs to target seizures and believe we are the only company that holds a portfolio of direct activators of KCC2. Two of our programs are in clinical trials, and a third is expected to begin a clinical trial in the second quarter of 2026. We are initially pursuing therapeutic drug candidates for epilepsy and psychosis in Parkinson’s disease and Lewy body dementia. If successfully developed and marketed to treat these conditions, we intend to explore these drug candidates for broader neurologic indications. Our cohesive focus in brain conditions with significant unmet need reinforces our belief that we can develop and produce multiple novel medicines, scale our infrastructure, positively impact patients’ lives and create long-term stockholder value.

Current wording

We are a biopharmaceutical company dedicated to developing small molecule medicines for brain conditions with significant unmet need. Our approach to achieve this goal is scientifically driven, patient focused, and coupled with an integrated and disciplined approach to research, clinical development and business development. Our team has significant experience with and understanding of epilepsies and other neurological conditions, and we continue to gain insight into the ways the different molecular mechanisms and pathways underlying these disorders impact the symptoms patients experience. We have developed a differentiated pipeline of drug candidates containing three novel mechanisms of action (“MoAs”) to target seizures and believe we are the only company that holds a portfolio of direct activators of potassium-chloride cotransporter 2 (“KCC2”). Two of our programs are in clinical trials, and a third is expected to begin a clinical trial in the second quarter of 2026. We are initially pursuing therapeutic drug candidates for epilepsy and psychosis in Parkinson’s disease and Lewy body dementia. If successfully developed and marketed to treat these conditions, we intend to explore these drug candidates for broader neurologic indications. Our cohesive focus in brain conditions with significant unmet need reinforces our belief that we can develop and produce multiple novel medicines, scale our infrastructure, positively impact patients’ lives and create long-term stockholder value.

Previous wording

During the three month periods ended March 31, 2025 and 2024, we generated $0.13 million and $0.15 million of royalty and licensing revenue, respectively. We have otherwise primarily funded our business through the sale of our capital stock and through various licensing and collaboration agreements. Through March 31, 2025, we have raised net proceeds of $275.4 million from the sale of our preferred and common stock. As of March 31, 2025, we had $43.0 million in cash, cash equivalents and marketable securities. As of March 31, 2025, we had an accumulated deficit of $314.5 million.

Current wording

During the six month periods ended June 30, 2025 and 2024, we generated $6.4 million and $0.3 million of royalty and licensing revenue, respectively. We have otherwise primarily funded our business through the sale of our capital stock and through various licensing and collaboration agreements. Through June 30, 2025, we have raised net proceeds of $275.4 million from the sale of our preferred and common stock. As of June 30, 2025, we had $38.3 million in cash, cash equivalents and marketable securities and an accumulated deficit of $319.2 million.

Previous wording

The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with public health crises and global geopolitical tensions, like tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, may have a material adverse effect on our business, financial condition, results of operations and growth prospects. The resulting fluctuations in inflation rates may materially affect our business and corresponding financial position and cash flows. Inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results. Relatively high interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Furthermore, economic conditions have produced downward pressure on share prices. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain relatively high or begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, global geopolitical tensions as a result of tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, worsening global macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital resources. Moreover, there is great uncertainty with respect to potential changes in trade regulations, ongoing changes to U.S. and international tariffs and other trade restrictions and trade barriers, renegotiation of international trade agreements or further escalation of trade tensions, sanctions and export controls which also increase volatility in the global economy.

Current wording

The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with public health crises and global geopolitical tensions, like tensions between China and Taiwan and the ongoing wars involving Ukraine and Israel, may have a material adverse effect on our business, financial condition, results of operations and growth prospects. The resulting fluctuations in inflation rates may materially affect our business and corresponding financial position and cash flows. Inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results. Relatively high interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Furthermore, economic conditions have produced downward pressure on share prices. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain relatively high or begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, global geopolitical tensions as a result of tensions between China and Taiwan and the ongoing wars involving Ukraine and Israel, worsening global macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital resources. Moreover, there is great uncertainty with respect to potential changes in trade regulations, ongoing changes to U.S. and international tariffs and other trade restrictions and trade barriers, renegotiation of international trade agreements or further escalation of trade tensions, sanctions and export controls which also increase volatility in the global economy.

Previous wording

During the three months ended March 31, 2025, research and development expenses were $6.7 million, compared to $10.4 million for the same period in 2024, representing a decrease of $3.7 million. Program research and development expenses declined by $2.5 million, primarily due to the pause of the OV888 (GV101) program and the reduction of preclinical and development expenses for OV329 offset by increased research and development expenses related to the OV350/KCC2 library. Payroll and payroll-related expenses declined by $1.1 million due to reduced headcount in the three months ended March 31, 2025 relative to the three months ended March 31, 2024 due to the organizational restructuring executed during the second quarter of 2024.

Current wording

During the three months ended June 30, 2025, research and development expenses were $6.5 million, compared to $12.6 million for the same period in 2024, representing a decrease of $6.1 million. Program research and development expenses declined by $3.9 million, primarily due to the pause of the OV888 (GV101) program. Payroll and payroll-related expenses declined by $2.1 million due to reduced headcount in the three months ended June 30, 2025 relative to the same period in 2024 primarily due to the organizational restructuring executed during the second quarter of 2024.

Previous wording

General and administrative expenses were $6.0 million and $7.2 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in general and administrative expenses is primarily due to the organizational restructuring executed during the second quarter of 2024, inclusive of payroll and payroll-related expenses as well as other cost reductions.

Current wording

General and administrative expenses were $4.9 million and $8.1 million for the three months ended June 30, 2025 and 2024, respectively. The decrease in general and administrative expenses is primarily due to the organizational restructuring executed during the second quarter of 2024, inclusive of payroll and payroll-related expenses as well as other cost reductions.

Previous wording

Other income (expense), net, for the three months ended March 31, 2025 and 2024 were gains of $2.3 million and $5.7 million, respectively. An unrealized gain of $1.8 million on recovery of a fraudulent funds transfer was recognized in the three months ended March 31, 2025, and during the same period in 2024 a gain of $4.2 million was recorded due to a fair value adjustment on a long-term equity investment. Other items reflected in other income (expense), net, in both periods were primarily interest income and accretion on U.S. treasury investments.

Current wording

Other income (expense), net, for the three months ended June 30, 2025 and 2024 were gains of $0.4 million and $29.0 million, respectively. During the three months ended June 30, 2024 a gain of $29.0 million was recorded due to an adjustment to the royalty monetization liability under the Company’s royalty monetization agreement with Ligand Pharmaceuticals Incorporated (“Ligand Agreement”). Other items reflected in other income (expense), net, in both periods were primarily interest income and accretion on U.S. treasury investments.

Previous wording

As of March 31, 2025, we had total cash, cash equivalents and marketable securities of $43.0 million. We believe that our cash, cash equivalents and marketable securities as of March 31, 2025 will be sufficient to fund our projected operating expenses and capital expenditure requirements for at least 12 months from the issuance of this Quarterly Report on Form 10-Q.

Current wording

As of June 30, 2025, we had total cash, cash equivalents and marketable securities of $38.3 million. Our cash, cash equivalents and marketable securities as of June 30, 2025 will not be sufficient to fund our projected operating expenses and capital expenditure requirements for at least 12 months from the date our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q were available to be issued. We are currently evaluating strategic alternatives, including additional financings or other options, such as partnerships or collaborations, strategic alliances, licensing agreements or a combination of any such transactions.

Previous wording

Similar to other development-stage biotechnology companies, we have generated limited revenue, which has been through various license and collaboration agreements, and have financed our operations primarily through the sale of equity securities. We have historically incurred losses and experienced negative operating cash flows for most periods since our inception and anticipate that we will incur losses and experience negative operating cash flows in the future. We recorded net losses of $10.2 million and $11.7 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $314.5 million and working capital of $36.6 million.

Current wording

Similar to other development-stage biotechnology companies, we have generated limited revenue, which has been through various license and collaboration agreements, and have financed our operations primarily through the sale of equity securities. We have historically incurred losses and experienced negative operating cash flows for most periods since our inception and anticipate that we will incur losses and experience negative operating cash flows in the future. We recorded net loss of $4.7 million and net income of $8.5 million for the three months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $319.2 million and working capital of $33.2 million.

Previous wording

We believe that our available cash, cash equivalents and marketable securities are sufficient to fund existing and planned cash requirements for at least the next 12 months from the issuance of the financial statements contained in this Quarterly Report on Form 10-Q. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, clinical costs, legal and other regulatory expenses and general overhead costs. We have based our estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently expect. Additionally, the process of testing drug candidates in clinical trials is costly, and the timing of progress in these trials is uncertain. We cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether, or when, we may achieve profitability.

Current wording

Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, clinical costs, legal and other regulatory expenses and general overhead costs. We have based our estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently expect. Additionally, the process of testing drug candidates in clinical trials is costly, and the timing of progress in these trials is uncertain. We cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether, or when, we may achieve profitability.

Previous wording

In September 2021, we entered into a 10-year lease agreement for our corporate headquarters in New York, New York. The lease provides for monthly rental payments over the lease term. The base rent under the lease is currently $2.3 million per year. Payment obligations under the lease agreement include $2.3 million in the 12 months subsequent to March 31, 2025 and $18.7 million over the remaining term of the agreement. For additional information see Note 5 to our condensed consolidated financial statements under the heading “Leases.”

Current wording

In September 2021, we entered into a 10-year lease agreement for our corporate headquarters in New York, New York. The lease provides for monthly rental payments over the lease term. The base rent under the lease is currently $2.3 million per year. Payment obligations under the lease agreement include $2.3 million in the 12 months subsequent to June 30, 2025 and $18.1 million over the remaining term of the agreement. For additional information see Note 5 to our condensed consolidated financial statements under the heading “Leases.”

Previous wording

Additionally, while the long-term economic impact of geopolitical tensions, including tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, is difficult to assess or predict, each of these events has caused significant disruptions to the global financial markets and contributed to a general global economic slowdown. Furthermore, inflation rates have increased recently to levels not seen in decades, which may also be impacted by the implementation of tariffs by the United States and other countries. Moreover, there is great uncertainty with respect to potential changes in trade regulations, tariffs, sanctions and export controls which also increase volatility in the global economy. In addition, the U.S. Federal Reserve has raised interest rates in the past in response to concerns about inflation. Relatively high interest rates and fluctuations in inflation, especially if coupled with a significant change in government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. If the disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ability to pursue our business strategy.

Current wording

Additionally, while the long-term economic impact of geopolitical tensions, including tensions between China and Taiwan and the ongoing wars involving Ukraine and Israel, is difficult to assess or predict, each of these events has caused significant disruptions to the global financial markets and contributed to a general global economic slowdown. Furthermore, inflation rates have increased recently to levels not seen in decades, which may also be impacted by the implementation of tariffs by the United States and other countries. Moreover, there is great uncertainty with respect to potential changes in trade regulations, tariffs, sanctions and export controls which also increase volatility in the global economy. In addition, the U.S. Federal Reserve has raised interest rates in the past in response to concerns about inflation. Relatively high interest rates and fluctuations in inflation, especially if coupled with a significant change in government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. If the disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ability to pursue our business strategy.

Previous wording

Net cash used in operating activities was $10.3 million for the three months ended March 31, 2025, which consisted primarily of net loss of $10.2 million with a reduction of $1.2 million of accounts payable offset by $1.3 million of non-cash stock-based compensation expense. Net cash used in operating activities was $16.7 million for the three months ended March 31, 2024, which primarily consisted of net loss of $11.7 million, $4.4 million of unrealized gain on long term equity investments, a reduction of accrued expenses of $2.5 million, offset by $2.0 million of non-cash stock-based compensation expense.

Current wording

Net cash used in operating activities was $15.1 million for the six months ended June 30, 2025, which consisted primarily of net loss of $14.9 million with a reduction of $2.4 million of accounts payable and accrued expenses offset by $2.5 million of noncash stock-based compensation expense. Net cash used in operating activities was $30.9 million for the six months ended June 30, 2024, which primarily consisted of net loss of $3.2 million, $29.0 million unrealized gain on fair value adjustment of the royalty monetization liability, $3.4 million of unrealized gain on long term equity investments, increase in accounts payable and accrued expenses of $2.6 million, and $3.7 million of noncash stock-based compensation expense.

Previous wording

Net cash provided by investing activities was $5.1 million and $20.2 million for the three months ended March 31, 2025 and 2024, respectively, which was primarily due to the maturity of marketable securities during the periods.

Current wording

Net cash provided by investing activities was $17.2 million and $33.0 million for the six months ended June 30, 2025 and 2024, respectively, which was primarily due to the maturity of marketable securities during the periods.

Previous wording

Net cash provided by financing activities were immaterial during the three months ended March 31, 2025 and 2024, resulting solely from proceeds from the exercise of stock options and purchases under the employee stock purchase plan.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2025 and 2024 resulted solely from proceeds from the exercise of stock options and purchases under the employee stock purchase plan.

Previous wording

During the three months ended March 31, 2025, there were no material changes to our critical accounting policies as reported for the year ended December 31, 2024 as part of our Annual Report on Form 10-K, which was filed with the SEC on March 11, 2025. In addition, see Note 2 of our condensed consolidated financial statements under the heading “Recent Accounting Pronouncements” for new accounting pronouncements or changes to the accounting pronouncements during the three months ended March 31, 2025.

Current wording

During the three and six months ended June 30, 2025, there were no material changes to our critical accounting policies as reported for the year ended December 31, 2024 as part of our Annual Report on Form 10-K, which was filed with the SEC on March 11, 2025. In addition, see Note 2 of our condensed consolidated financial statements under the heading “Recent Accounting Pronouncements” for new accounting pronouncements or changes to the accounting pronouncements during the three and six months ended June 30, 2025.