Maham Fatima

Sat, September 12, 2026 at 6:46 AM EDT 4 min read

On August 13, Ovid Therapeutics (NASDAQ:OVID) reported financial results for the second quarter ended June 30, alongside a batch of pipeline updates. The biopharmaceutical company, which focuses on treatments for brain disorders, used the update to lay out progress on two clinical programs, a leadership shakeup, and a deal that hands off one of its older assets in exchange for future payments. Cash on hand stood at $169.8 million, which the company says funds operations into 2029.

Two Shots On Goal Advance

The core of the update is clinical progress on Ovid's two lead compounds. OV4071, described as the first oral direct KCC2 activator, is moving through an ongoing Phase 1 study in healthy volunteers, with data expected to support a Phase 2 proof-of-concept study in acute schizophrenia in 2027. Ovid also plans to start a ketamine challenge study of OV4071 in the second half of 2026 to test biomarkers tied to schizophrenia and related conditions. The second program, OV329, a next-generation GABA-AT inhibitor, entered a Phase 2 randomized, placebo-controlled study in treatment-resistant focal onset seizures, a global trial the company says carries registrational-level rigor and is expected to finish in the second half of 2027.

A separate photosensitivity study testing 5, 7 and 9 milligram doses of OV329 is due to read out near the end of 2026, and a proof-of-concept study in tuberous sclerosis complex-associated seizures is set to begin in the fourth quarter of 2026, ahead of a planned 2027 study in infantile spasms. Ovid also secured equity and milestone rights in a new company formed by Perceptive Advisors that acquired global rights to soticlestat from Ovid and Takeda, with Ovid eligible for up to $294.5 million in potential clinical, regulatory, and commercial milestones plus royalties if the drug reaches the market.

The Losses Keep Climbing

Funding that pipeline is getting more expensive. Research and development expenses rose to $10.0 million for the quarter from $6.5 million a year earlier, which the company attributes to heavier preclinical and clinical activity on OV329 and OV4071. G&A costs climbed to $6.5 million from $4.9 million over the same period. Total operating expenses reached $16.4 million, up from $11.3 million in the second quarter of 2025, and 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.

The soticlestat transaction also means Ovid no longer controls that program directly. A portion of any future milestone payments is owed to Ligand under an existing royalty agreement, and Ovid's upside is now capped at royalties and milestones rather than direct commercial returns. Meanwhile, the company's share count grew in April when Series A warrants from an October 2025 private placement expired, with holders exercising warrants into 33,597,860 shares of common stock at $1.40 per share and 4,883,465 pre-funded warrants at $1.399 per share, adding roughly $53.9 million in proceeds but also more shares outstanding.