Ovid Therapeutics, in a strategic move to secure funding for its operations through 2026, has divested a portion of its royalty rights associated with soticlestat, a seizure medication developed in collaboration with Takeda. The biotech has successfully sold 13% of its share of potential royalties and future milestone payments for soticlestat to Ligand Pharmaceuticals, fetching a substantial $30 million. This “non-dilutive capital infusion” extends Ovid’s financial runway well beyond its previous projection of 2025, while retaining the majority of its interest in the cholesterol 24-hydroxylase inhibitor.
Jeffrey Rona, Chief Business and Financial Officer at Ovid, emphasized the creativity and customization of the transaction with Ligand, which stands to benefit both parties as soticlestat progresses toward expected success. Ovid, located in New York, found itself with $96.5 million in cash and equivalents as of June, originally intended to cover expenses until 2025. Now, with this substantial financial boost, Ovid not only secures its financial stability until 2026 but also gains the capacity to expand its ongoing clinical programs.
Ligand’s CEO, Todd Davis, sees soticlestat as a valuable addition to the company’s growing portfolio of royalty assets, emphasizing the strategy of investing in high-quality assets within therapeutic areas characterized by significant unmet needs. This approach offers investors exposure to diverse asset cash flows while benefiting from the due diligence conducted by an expert team.
Ovid’s journey with soticlestat began when it developed the medication independently and subsequently licensed the rights to Takeda in 2021, receiving an upfront payment of $196 million and the potential for up to $660 million in milestone payments. In addition, Ovid secured a 20% share of global royalties in the event the drug reaches the market.
As soticlestat advances, Takeda is currently conducting phase 3 trials for both Lennox-Gastaut syndrome and Dravet syndrome, with plans to seek regulatory approvals next year. Analysts from William Blair have expressed optimism regarding soticlestat’s potential, projecting it could achieve $1 billion in sales, given a clinical profile similar to the one observed in phase 2. They believe it has the makings of a blockbuster product, promising substantial economic benefits for Ovid and the possibility of expanding into additional therapeutic indications.
