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What changed in Ovid Therapeutics Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Ovid Therapeutics Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+454 added−642 removedSource: 10-K (2026-03-18) vs 10-K (2025-03-11)

Top changes in Ovid Therapeutics Inc.'s 2025 10-K

454 paragraphs added · 642 removed · 252 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

98 edited+49 added−27 removed86 unchanged
Biggest changeF-18 The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities were as follows: December 31, (in thousands) 2024 2023 Deferred tax assets/liabilities: Net operating loss carryovers $ 62,120 $ 55,653 Intangible assets 5,406 7,522 Capitalized research and experimental costs 14,939 10,909 Stock-based compensation 5,534 7,248 Lease liability 3,324 4,495 Royalty monetization liability — 8,428 Research and development tax credits 2,229 2,878 Charitable contributions 2 — Depreciation (93) (166) Right-of-use asset (2,883) (3,903) Other (1,103) (435) Total gross deferred tax assets/liabilities 89,474 92,629 Valuation allowance (89,474) (92,629) Net deferred tax assets (liabilities) $ — $ — A reconciliation of the statutory U.S.
Biggest changeLoss before income taxes resulting from operations is as follows: December 31, (in thousands) 2025 2024 Domestic $ (17,775) $ (25,058) Foreign 361 (1,375) Pretax loss from operations $ (17,414) $ (26,433) F-21 The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities were as follows: December 31, (in thousands) 2025 2024 Deferred tax assets/liabilities: Net operating loss carryovers $ 70,229 $ 62,120 Intangible assets 4,550 5,406 Capitalized research and experimental costs 14,289 14,939 Stock-based compensation 5,089 5,534 Lease liability 2,890 3,324 Research and development tax credits 2,206 2,229 Charitable contributions 2 2 Depreciation (48) (93) Right-of-use asset (2,501) (2,883) Unrealized gain on long-term equity investment (5,612) (1,103) Total net deferred tax assets/liabilities 91,094 89,474 Valuation allowance (91,094) (89,474) Net deferred tax assets (liabilities) $ — $ — A reconciliation of the amounts at the U.S. federal statutory rate to the Company’s effective income tax rate is as follows: December 31, 2025 December 31, 2024 (in thousands) Amount Percent Amount Percent U.S. federal statutory tax rate $ (3,657) 21.0 % $ (5,525) 21.0 % State and local income taxes, net of federal income tax effect 2 — % — — % Foreign tax effects Australia Changes in valuation allowance (55) 0.3 % 370 (1.4) % Other (21) 0.1 % (81) 0.3 % Effect of changes in tax laws or rates enacted in the current period Effect of cross-border tax laws Other — — % 99 (0.4) % Tax credits Changes in valuation allowances 2,686 (15.4) % 3,391 (12.9) % Nontaxable or nondeductible items Stock-based awards 1,188 (6.8) % 1,526 (5.8) % Other 7 — % 164 (0.6) % Changes in unrecognized tax benefits Other adjustments Other (52) 0.3 % 55 (0.2) % Effective income tax rate $ 98 (0.5) % $ — 0.0 % The Company’s reserves related to taxes are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies related to the tax benefit.
On each of August 10, 2015 and February 22, 2019 the Company experienced an ownership change. The Company anticipates a significant portion of its pre-change NOLs to be limited, however has not yet completed a formal Section 382 analysis subsequent to the last ownership change. The Company maintains a full valuation allowance against its net deferred tax assets.
On each of August 10, 2015 and February 22, 2019 the Company experienced an ownership change. The Company anticipates a significant portion of its pre-change NOLs to be limited, however has not completed a formal Section 382 analysis subsequent to the last ownership change. The Company maintains a full valuation allowance against its net deferred tax assets.
In May 2023, the Company identified a lead PDP candidate for further research and provided $3.5 million to Gensaic to support the approved research plan and budget. The amount is expensed as the research and development occurs with the remaining amount included in prepaid expenses and other current assets in the condensed consolidated balance sheets.
In May 2023, the Company identified a lead PDP candidate for further research and provided $3.5 million to Gensaic to support the approved research plan and budget. The amount is expensed as the research and development occurs with the remaining amount included in prepaid expenses and other current assets in the consolidated balance sheets.
(M) Net Loss per Share The rights and preferences of the Series A Preferred stock are negligible relative to common stock, therefore the Series A Preferred stock is treated as in-substance common stock on an as-converted basis when allocating Net Income (Loss) to actual and in-substance shares of common stock.
(M) Net Loss per Share The rights and preferences of the Series A Preferred stock are negligible relative to common stock, therefore the Series A Preferred stock is treated as in-substance common stock on an as-converted basis when allocating net loss to actual and in-substance shares of common stock.
Under the Marinus License Agreement, the Company granted Marinus an exclusive, non-transferable (except as expressly provided therein), royalty-bearing right and license under certain Ovid patents relating to ganaxolone to F-22 develop, make, have made, commercialize, promote, distribute, sell, offer for sale and import licensed products in the territory (which consists of the United States, the European Economic Area, United Kingdom and Switzerland) for the treatment of CDKL5 deficiency disorders.
Under the Marinus License Agreement, the Company granted Marinus an exclusive, non-transferable (except as expressly provided therein), royalty-bearing right and license under certain Ovid patents relating to ganaxolone to develop, make, have made, commercialize, promote, distribute, sell, offer for sale and import licensed products in the territory (which consists of the United States, the European Economic Area, United Kingdom and Switzerland) for the treatment of CDKL5 deficiency disorders.
Graviton License Agreement and Equity Purchase In April 2023, the Company entered into a collaboration and license agreement with Graviton (“Graviton Agreement”), whereby it secured from Graviton an exclusive license to develop and commercialize Graviton’s library of ROCK2 inhibitors including their lead program GV101 (OV888) in rare CNS disorders (excluding amyotrophic lateral sclerosis) worldwide (excluding China, Hong Kong, Macau and Taiwan).
F-25 Graviton License Agreement and Equity Purchase In April 2023, the Company entered into a collaboration and license agreement with Graviton (“Graviton Agreement”), whereby it secured from Graviton an exclusive license to develop and commercialize Graviton’s library of ROCK2 inhibitors including their lead program GV101 (OV888) in rare CNS disorders (excluding amyotrophic lateral sclerosis) worldwide (excluding China, Hong Kong, Macau and Taiwan).
F-9 The three levels of the fair value hierarchy are as follows: • Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.
The three levels of the fair value hierarchy are as follows: • Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.
NOTE 10 – COMMITMENTS AND CONTINGENCIES License Agreements Northwestern University License Agreement In December 2016, the Company entered into a license agreement (“Northwestern Agreement”) with Northwestern University (“Northwestern”), pursuant to which Northwestern granted the Company an exclusive, worldwide license to patent rights of certain inventions (“Northwestern Patent Rights”) which relate to a specific compound and F-19 related methods of use for such compound, along with certain know-how related to the practice of the inventions claimed in the Northwestern Patent Rights.
NOTE 10 – COMMITMENTS AND CONTINGENCIES License Agreements Northwestern University License Agreement In December 2016, the Company entered into a license agreement (“Northwestern Agreement”) with Northwestern University (“Northwestern”), pursuant to which Northwestern granted the Company an exclusive, worldwide license to patent rights of certain inventions (“Northwestern Patent Rights”) which relate to a specific compound and related methods of use for such compound, along with certain know-how related to the practice of the inventions claimed in the Northwestern Patent Rights.
No impairments were recognized in the years ending December 31, 2024 and 2023. (F) Fair Value of Financial Instruments Financial Accounting Standards Board guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions.
No impairments were recognized in the years ending December 31, 2025 and 2024. (F) Fair Value of Financial Instruments Financial Accounting Standards Board guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions.
Performance-based option awards generally have similar vesting terms, with vesting occurring on the date the performance condition is achieved and expire in accordance with the specific terms of the agreement. At December 31, 2024 and 2023, there were no performance-based options outstanding and unvested that include options to vest upon the achievement of certain research and development milestones.
Performance-based option awards generally have similar vesting terms, with vesting occurring on the date the performance condition is achieved and expire in accordance with the specific terms of the agreement. At December 31, 2025 and 2024, there were no performance-based options outstanding and unvested that include options to vest upon the achievement of certain research and development milestones.
The fair value of options granted during the years ended December 31, 2024 and 2023 was estimated using the Black-Scholes option valuation model. The inputs for the Black-Scholes option valuation model require assumptions made by management and are detailed in the table below. The risk-free interest rates were based on the rate for U.S.
The fair value of options granted during the years ended December 31, 2025 and 2024 was estimated using the Black-Scholes option valuation model. The inputs for the Black-Scholes option valuation model require assumptions made by management and are detailed in the table below. The risk-free interest rates were based on the rate for U.S.
Upon execution of the agreement, the Company was obligated to pay an upfront cash payment of $5.0 million and issued shares of the Company’s common stock in an amount that equaled $7.3 million based on the volume-weighted average price of shares of the Company’s common stock for the 30 business days immediately preceding the execution date of the transaction.
Upon execution of the agreement, the Company was obligated to pay an upfront cash payment of $5.0 million and issued shares of the Company’s common stock in an amount that equaled $7.3 million based on the volume-weighted average price of shares of the Company’s common stock for the 30 business days immediately preceding the execution date of the F-23 transaction.
The Company also retained rights to invest in future equity financing rounds. Dr. Jeremy Levin, the Company’s Chairman and CEO, is currently the Chairman of Gensaic’s board of directors. The Gensaic Collaboration Agreement involves the research and development of Gensaic’s proprietary platform for certain rare central nervous system (“CNS”) disorder targets.
The Company also retained rights to invest in future equity financing rounds. Dr. Jeremy Levin, the Company’s Executive Chairman, is currently the Chairman of Gensaic’s board of directors. The Gensaic Collaboration Agreement involves the research and development of Gensaic’s proprietary platform for certain rare central nervous system (“CNS”) disorder targets.
Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.
Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs F-24 incurred in connection with loss contingencies are expensed as incurred.
No dividends on the common stock shall be declared and paid unless dividends on the preferred stock have been declared and paid. NOTE 8 – STOCK-BASED COMPENSATION The Company’s Board of Directors (the “Board”) adopted, and the Company’s stockholders approved, the 2017 Equity Incentive Plan (“2017 Plan”), which became effective on May 4, 2017.
No dividends on the common stock shall be declared and paid unless dividends on the preferred stock have been declared and paid. F-18 NOTE 8 – STOCK-BASED COMPENSATION The Company’s Board of Directors (the “Board”) adopted, and the Company’s stockholders approved, the 2017 Equity Incentive Plan (“2017 Plan”), which became effective on May 4, 2017.
The Company’s Level 1 assets consisted of investments in a U.S. treasury money market fund and equity securities totaling approximately $25.8 million and $25.7 million, respectively, as of December 31, 2024 and 2023. • Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).
The Company’s Level 1 assets consisted of investments in a U.S. treasury money market fund and equity securities totaling approximately $7.6 million and $25.8 million, respectively, as of December 31, 2025 and 2024. • Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).
The Company reviews the recoverability of all long-lived assets, including the related useful life, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. (I) Research and Development Expenses The Company expenses the cost of research and development as incurred.
The Company reviews the recoverability of all long-lived assets, including the related useful life, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. F-11 (I) Research and Development Expenses The Company expenses the cost of research and development as incurred.
(P) Recent Accounting Pronouncements The Company has reviewed recently issued accounting standards and plans to adopt those that are applicable. The Company does not expect the adoption of those standards to have a material impact on its financial position, results of operations or cash flows.
(R) Recent Accounting Pronouncements The Company has reviewed recently issued accounting standards and plans to adopt those that are applicable. The Company does not expect the adoption of those standards to have a material impact on its financial position, results of operations or cash flows.
If a product is ultimately commercialized under this agreement, the Company is required to make tiered royalty payments to Gensaic in the mid-single to low double-digit range based on the net sales of all licensed PDP products during the royalty term.
If a product is ultimately commercialized under the Gensaic Collaboration Agreement, the Company is required to make tiered royalty payments to Gensaic in the mid-single to low double-digit range based on the net sales of all licensed PDP products during the royalty term.
The Company recognizes employee stock-based compensation expense based on the fair value of the award on the date of the grant. The compensation expense is recognized over the vesting period under the straight-line method. The Company aggregates employee and nonemployee awards for certain disclosures since nonemployee awards are not material.
The Company recognizes employee stock-based compensation expense based on the fair value of the award on the date of the grant. The compensation expense is recognized over the vesting period using the straight-line method. The Company aggregates employee and nonemployee awards for certain disclosures since nonemployee awards are not material.
Net loss per diluted share attributable to common stockholders adjusts the basic earnings per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potential dilutive impact of stock options using the treasury-stock method and the potential impact of any preferred stock using the if-converted method.
F-12 Net loss per diluted share attributable to common stockholders adjusts the basic earnings per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potential dilutive impact of stock options using the treasury-stock method and the potential impact of any preferred stock using the if-converted method.
F-8 (B) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
(B) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Once a product is identified by the Company that demonstrates sufficient efficacy, the Company may exercise its option with respect to the specific research program for that PDP product. F-20 The Company shall reimburse Gensaic for Gensaic’s research costs related to the specific research plan for PDP products identified.
Once a product is identified by the Company that demonstrates sufficient efficacy, the Company may exercise its option with respect to the specific research program for that PDP product. The Company shall reimburse Gensaic for Gensaic’s research costs related to the specific research plan for PDP products identified.
As the Company’s operations are comprised of a single reporting segment, the segment assets are reflected on the accompanying consolidated balance sheet as “total assets”. Segment asset information is not used by the CODM to allocate resources.
As the Company’s operations are comprised of a single reporting segment, the segment assets are reflected on the accompanying consolidated balance sheet as “total assets.” Segment asset information is not used by the CODM to allocate resources.
Non-refundable upfront fees allocated to licenses that are not contingent on any future performance and require no consequential continuing involvement by the Company, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. The Company defers recognition of upfront license fees if the performance obligations are not satisfied.
Nonrefundable upfront fees allocated to licenses that are not contingent on any future performance and require no consequential continuing involvement by the Company, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. The Company defers recognition of upfront license fees if the performance obligations are not satisfied.
AstraZeneca AB License Agreement In December 2021, the Company entered into an exclusive license agreement with AstraZeneca AB (“AstraZeneca”), for a library of early-stage small molecules targeting the KCC2 transporter, including lead candidate OV350.
AstraZeneca AB License Agreement In December 2021, the Company entered into an exclusive license agreement with AstraZeneca AB (“AstraZeneca”), for a library of early-stage small molecules targeting the KCC2 transporter, including OV350.
The Company issued a letter of F-13 credit in the amount of $1.9 million in association with the execution of the lease agreement; the letter of credit is characterized as restricted cash on the Company’s consolidated balance sheets.
The Company issued a letter of credit in the amount of $1.9 million in association with the execution of the lease agreement; the letter of credit is characterized as restricted cash on the Company’s consolidated balance sheets.
The Chief Operating Decision Maker (“CODM”) is the Chairman and Chief Executive Officer (“CEO”), who reviews profit and loss information on a consolidated basis to assess performance and make operating and planning decisions, including resource allocations among active programs. The determination of the single segment is consistent with the information provided to the CEO.
The Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer (“CEO”), who reviews profit and loss information on a consolidated basis to assess performance and make operating and planning decisions, including resource allocations among active programs. The determination of the single segment is consistent with the information provided to the CODM.
In March 2021, the Company entered into the RLT Agreement with Takeda, pursuant to which Takeda secured rights to the Company’s 50% global share in soticlestat, and the Company granted to Takeda an exclusive worldwide license under the Company’s relevant intellectual property rights to develop and commercialize the investigational F-21 medicine soticlestat for the treatment of developmental and epileptic encephalopathies, including Dravet syndrome and Lennox-Gastaut syndrome.
In March 2021, the Company entered into the Royalty, License, and Termination ("RLT") Agreement with Takeda, pursuant to which Takeda secured rights to the Company’s 50% global share in soticlestat, and the Company granted to Takeda an exclusive worldwide license under the Company’s relevant intellectual property rights to develop and commercialize the investigational medicine soticlestat for the treatment of developmental and epileptic encephalopathies, including Dravet syndrome and Lennox-Gastaut syndrome.
In March 2021, upon the closing of the RLT Agreement, the Company received a non-refundable upfront payment of $196.0 million and was eligible to receive up to an additional $660.0 million upon Takeda achieving developmental, regulatory and sales milestones.
In March 2021, upon the closing of the RLT Agreement, the Company received a nonrefundable upfront payment of $196.0 million and was eligible to receive up to an additional $660.0 million upon Takeda achieving developmental, regulatory and sales milestones.
Key inputs and assumptions include the expected term of the option, stock price volatility, risk-free interest rate, dividend yield, stock price and exercise price. F-10 Many of the assumptions require judgment and any changes could have an impact in the determination of stock-based compensation expense. The Company elected an accounting policy to record forfeitures as they occur.
Key inputs and assumptions include the expected term of the option, stock price volatility, risk-free interest rate, dividend yield, stock price and exercise price. Many of the assumptions require judgment and any changes could have an impact in the determination of stock-based compensation expense. The Company elected to record forfeitures as they occur.
There were no material realized gains or losses on available-for-sale securities during the years ended December 31, 2024 and 2023.
There were no material realized gains or losses on available-for-sale securities during the years ended December 31, 2025 and 2024.
Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company’s Level 2 assets consisted of U.S. treasury bills totaling approximately $26.8 million and $78.8 million, respectively, as of December 31, 2024 and 2023. • Level 3—Unobservable inputs for the asset or liability.
Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company’s Level 2 assets consisted of U.S. treasury bills totaling approximately $82.3 million and $26.8 million, respectively, as of December 31, 2025 and 2024. • Level 3—Unobservable inputs for the asset or liability.
As of December 31, 2024, options to purchase 1,328,715 shares of common stock were outstanding under the 2014 Plan. Unless specified otherwise in an individual option agreement, stock options granted under the 2014 Plan and 2017 Plan have a ten-year term and a four-year graded vesting period.
As of December 31, 2025 and 2024, options to purchase 793,833 and 1,328,715 shares of common stock were outstanding under the 2014 Plan, respectively. Unless specified otherwise in an individual option agreement, stock options granted under the 2014 Plan and 2017 Plan have a ten-year term and a four-year graded vesting period.
Non-Operating Loss During the quarter ended September 30, 2024, the Company was the victim of a criminal scheme involving a business email compromise at one of its development collaborators, which led to a fraudulent transfer totaling $1.8 million to a third-party impersonating one of the Company’s development collaborators. The matter was reported to the U.S.
Non-Operating Loss During the quarter ended September 30, 2024, the Company was the victim of a criminal scheme involving a business email compromise at one of its development collaborators, which led to a fraudulent transfer totaling $1.8 million to a third-party impersonating one of the Company’s development collaborators.
The program related to this collaboration agreement is currently paused, pending regulatory feedback on another competitive clinical-stage development program. NOTE 12 – RELATED PARTY TRANSACTIONS In March 2021, the Company entered into the RLT Agreement with Takeda. For a description of the RLT Agreement, see Note 11.
The program related to this collaboration agreement is currently paused, pending regulatory feedback on another competitive clinical-stage development program. NOTE 12 – RELATED PARTY TRANSACTIONS In March 2021, the Company entered into the RLT Agreement with Takeda. For a description of the RLT Agreement, see Note 11. In the 2025 Private Placement, Dr.
As of December 31, 2024 and 2023, the equity investment in Gensaic had a carrying value of $5.1 million.
As of December 31, 2025 and 2024, the equity investment in Gensaic had a carrying value of $5.1 million.
Intangible assets, net of accumulated amortization, were $0.1 million and $0.2 million as of December 31, 2024 and 2023, respectively, and are included in other assets. Amortization expense was $0.2 million and $0.1 million for the years ended December 31, 2024 and 2023, respectively.
Intangible assets, net of accumulated amortization, were zero and $0.1 million as of December 31, 2025 and 2024, respectively, and are included in other assets. Amortization expense was $0.1 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively.
The Company recorded a net loss of $26.4 million during the year ended December 31, 2024 and expects to incur losses in subsequent periods for at least the next several years.
The Company recorded a net loss of $17.4 million during the year ended December 31, 2025 and expects to incur losses in subsequent periods for at least the next several years.
At December 31, 2023, there was $9.4 million of unamortized stock-based compensation expense, which is expected to be recognized over a remaining average vesting period of 2.23 years.
At December 31, 2024, there was $9.1 million of unamortized stock-based compensation expense, which is expected to be recognized over a remaining average vesting period of 2.23 years.
For the years ended December 31, 2024 and 2023, the Company had no unrecognized tax benefits or related interest and penalties accrued. The Company would recognize both accrued interest and penalties related to unrecognized benefits in provision for income taxes.
For the years ended December 31, 2025 and 2024, the Company had no unrecognized tax benefits or related interest and penalties accrued. The Company would recognize both accrued interest F-22 and penalties related to unrecognized benefits in provision for income taxes.
As of December 31, 2024 and 2023, the equity investment in Marinus had a carrying value of approximately $0.1 million and $1.3 million, respectively. In January 2025, Immedica Pharma, S.A. purchased Marinus in an all-cash tender offer, resulting in the Company’s sale of its position in Marinus for $0.07 million.
As of F-10 December 31, 2025 and 2024, the equity investment in Marinus had a carrying value of zero and $0.1 million, respectively. In January 2025, Immedica Pharma, S.A. purchased Marinus in an all-cash tender offer, resulting in the Company’s sale of its position in Marinus for $0.07 million.
Since inception, the Company has generated $223.5 million in revenue, primarily from the Company’s royalty, license and termination agreement (“RLT Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”).
Since inception, the Company has generated $230.7 million in revenue, primarily from the Company’s royalty, license and termination agreement (“RLT Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”).
The Company’s major sources of cash have been licensing revenue, proceeds from various public and private offerings of its capital stock, option exercises and interest income. As of December 31, 2024, the Company had approximately $53.1 million in cash, cash equivalents and marketable securities.
The Company’s major sources of cash have been licensing revenue, proceeds from various public and private offerings of its capital stock, option exercises and interest income. As of December 31, 2025, the Company had approximately $90.4 million in cash, cash equivalents and marketable securities.
The balance of the previously provided research funds was $1.0 million and $2.5 million as of December 31, 2024 and 2023, respectively. Research and development expense was $1.5 million and $1.1 million during the years ended December 31, 2024 and 2023, respectively.
The balance of the previously provided research funds was $1.0 million as of December 31, 2025 and 2024. Research and development expense was zero and $1.5 million during the years ended December 31, 2025 and 2024, respectively.
The ESPP allows employees to purchase common stock of the Company at a 15% discount to the market price on designated purchase dates. During the years ended December 31, 2024 and 2023, 69,850 and 63,761 shares were purchased under the ESPP and the Company recorded expense of $65,000 and $57,000, respectively.
The ESPP allows employees to purchase common stock of the Company at a 15% discount to the market price on designated purchase dates. During the years ended December 31, 2025 and 2024, 76,976 and 69,850 shares were purchased under the ESPP and the Company recorded expense of $38,000 and $65,000, respectively.
NOTE 9 – INCOME TAXES At December 31, 2024, the Company has available $177.3 million and $197.5 million of unused net operating loss (“NOL”) carryforwards for federal and state tax purposes, respectively, that may be applied against future taxable income. The Company also has $163.8 million of unused NOL carryforwards for New York City purposes.
NOTE 9 – INCOME TAXES At December 31, 2025, the Company has available $214.9 million and $202.7 million of unused net operating loss (“NOL”) carryforwards for federal and state tax purposes, respectively, that may be applied against future taxable income. The Company also has $163.8 million of unused NOL carryforwards for New York City purposes.
NOTE 4 – PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS Property and equipment is summarized as follows: (in thousands) December 31, 2024 December 31, 2023 Furniture and equipment $ 1,534 $ 1,463 Leasehold improvements 306 306 Less accumulated depreciation (1,407) (1,001) Total property and equipment, net $ 433 $ 769 Depreciation expense was $0.4 million for the years ended December 31, 2024 and 2023.
NOTE 4 – PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS Property and equipment is summarized as follows: (in thousands) December 31, 2025 December 31, 2024 Furniture and equipment $ 1,534 $ 1,534 Leasehold improvements 306 306 Less accumulated depreciation (1,588) (1,407) Total property and equipment, net $ 252 $ 433 Depreciation expense was $0.2 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively.
Long-term equity investments also consist of an equity investment in the common shares of Marinus Pharmaceuticals, Inc. (“Marinus”) that was received as noncash consideration via the terms of a licensing agreement executed between the two companies effective March 2022.
The cumulative unrealized gain on the equity investment in Graviton is $26.9 million. Long-term equity investments also consist of an equity investment in the common shares of Marinus Pharmaceuticals, Inc. (“Marinus”) that was received as noncash consideration via the terms of a licensing agreement executed between the two companies effective March 2022.
On January 1, 2025, no additional shares were reserved for issuance under the 2017 Plan. The Board adopted, and the Company’s stockholders approved, the 2017 employee stock purchase plan (“ESPP”), which became effective on May 4, 2017. The initial reserve of shares of common stock that may be issued under the ESPP was 279,069 shares.
The Board adopted, and the Company’s stockholders approved, the 2017 employee stock purchase plan (“ESPP”), which became effective on May 4, 2017. The initial reserve of shares of common stock that may be issued under the ESPP was 279,069 shares.
The Board acted prior to January 1, 2024 to provide F-15 that there be no increase in the number of shares reserved for issuance under the ESPP. As of December 31, 2024 and 2023, there were 282,996 and 352,846 shares of the Company’s common stock reserved for issuance under the ESPP.
The Board acted prior to January 1, 2026, 2025 and 2024 to provide that there be no increase in the number of shares reserved for issuance under the ESPP. As of December 31, 2025 and 2024, there were 206,020 and 282,996 shares of the Company’s common stock reserved for issuance under the ESPP, respectively.
Management believes that the Company’s existing cash, cash equivalents and marketable securities as of December 31, 2024 will be sufficient to fund its current operations through at least 12 months from the date of filing of the Company’s Annual Report on Form 10-K. Adequate additional funding may not be available to the Company on acceptable terms or at all.
Management believes that the Company’s existing cash, cash equivalents and marketable securities as of December 31, 2025 will be sufficient to fund its current operations through at least 12 months from the date of the issuance of these consolidated financial statements. Adequate additional funding may not be available to the Company on acceptable terms or at all.
Consolidated Statements of Comprehensive Loss (in thousands) For the Year Ended December 31, 2024 For the Year Ended December 31, 2023 Net loss $ (26,433) $ (52,339) Other comprehensive income: Cumulative translation adjustment (42) — Unrealized gain on available-for-sale securities 7 1 Comprehensive loss $ (26,468) $ (52,338) See accompanying notes to these consolidated financial statements F-5 OVID THERAPEUTICS INC.
Consolidated Statements of Comprehensive Loss (in thousands) For the Year Ended December 31, 2025 For the Year Ended December 31, 2024 Net loss $ (17,414) $ (26,433) Other comprehensive (loss) income: Cumulative translation adjustment (140) (42) Unrealized (loss) gain on available-for-sale securities (27) 7 Comprehensive loss $ (17,581) $ (26,468) See accompanying notes to these consolidated financial statements F-6 OVID THERAPEUTICS INC.
The Company would no longer be required to pay Gensaic royalty or milestone payments if Gensaic elects to exercise its option. The Company may terminate this agreement by providing written notice to Gensaic 90 days in advance of the termination date.
The Company would no longer be required to pay Gensaic royalty or milestone payments if Gensaic elects to exercise its option. The Company may terminate the Gensaic Collaboration Agreement by providing written notice to Gensaic 90 days in advance of the termination date. As of December 31, 2025, none of the contingent payments are considered probable.
NOTE 13 – NET LOSS PER SHARE The basic and diluted net loss per common share is presented in conformity with the two-class method required for participating securities and multiple classes of shares. The Company considers its preferred stock to be in-substance common stock (Note 2).
NOTE 13 – NET LOSS PER SHARE The basic and diluted net loss per common share is presented in conformity with the two-class method required for participating securities and multiple classes of shares.
Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company’s Level 3 liabilities consist of a royalty monetization liability totaling $0.0 million and $30.0 million, respectively, as of December 31, 2024 and 2023.
Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. There were no Level 3 assets or liabilities as of December 31, 2025 and 2024. Previously, the Company’s Level 3 liabilities consisted of a royalty monetization liability.
(H) Property and Equipment Property and equipment are stated at cost and depreciated over their estimated useful lives of three years using the straight-line method. Repair and maintenance costs are expensed.
(H) Property and Equipment Property and equipment are stated at cost and depreciated over their estimated useful lives of three years, or in the case of leasehold improvements, over the remaining life of the relevant lease, using the straight-line method. Repair and maintenance costs are expensed.
The Company granted 4,699,810 and 3,038,000 stock options during the years ended December 31, 2024 and 2023, respectively. There were 5,688,743 and 5,475,452 unvested options outstanding as of December 31, 2024 and 2023, respectively. Total expense recognized related to the stock options for the years ended December 31, 2024 and 2023 was $6.2 million and $7.7 million, respectively.
F-19 The Company granted 4,152,650 and 4,699,810 stock options during the years ended December 31, 2025 and 2024, respectively. There were 6,570,487 and 5,688,743 unvested options outstanding as of December 31, 2025 and 2024, respectively. Total expense recognized related to the stock options for the years ended December 31, 2025 and 2024 was $3.2 million and $6.2 million, respectively.
ROU asset and lease liabilities related to the Company’s operating lease are as follows: (in thousands) December 31, 2024 December 31, 2023 ROU asset, net $ 12,797 $ 13,894 Current lease liability $ 1,336 $ 1,246 Long-term lease liability $ 13,419 $ 14,756 The components of operating lease cost for the year ended December 31, 2024 and 2023 were as follows: (in thousands) December 31, 2024 December 31, 2023 Operating lease cost $ 2,167 $ 2,167 Variable lease cost — — Short-term lease cost — — Future minimum commitments under the non-cancelable operating lease are as follows: (in thousands) 2025 $ 2,316 2026 2,316 2027 2,316 2028 2,469 2029 2,469 Thereafter 7,408 $ 19,296 NOTE 6 – ACCRUED EXPENSES Accrued expenses consist of the following: (in thousands) December 31, 2024 December 31, 2023 Payroll and bonus accrual $ 2,959 $ 4,277 Research and development accrual 2,779 1,396 Professional fees accrual 168 522 Other 89 329 Total $ 5,994 $ 6,524 NOTE 7 – STOCKHOLDERS’ EQUITY The Company’s capital structure consists of common stock and preferred stock.
F-15 ROU asset and lease liabilities related to the Company’s operating lease are as follows: (in thousands) December 31, 2025 December 31, 2024 ROU asset, net $ 11,610 $ 12,797 Current lease liability $ 1,433 $ 1,336 Long-term lease liability $ 11,986 $ 13,419 The components of operating lease cost for the year ended December 31, 2025 and 2024 were as follows: (in thousands) December 31, 2025 December 31, 2024 Operating lease cost $ 2,167 $ 2,167 Variable lease cost — — Short-term lease cost — — Future minimum commitments under the non-cancelable operating lease are as follows: (in thousands) 2026 $ 2,316 2027 2,316 2028 2,469 2029 2,469 2030 2,469 Thereafter 4,939 $ 16,978 NOTE 6 – ACCRUED EXPENSES Accrued expenses consist of the following: (in thousands) December 31, 2025 December 31, 2024 Payroll and bonus accrual $ 3,106 $ 2,959 Research and development accrual 1,191 2,779 Professional fees accrual 350 168 Other 252 88 Total $ 4,899 $ 5,994 NOTE 7 – STOCKHOLDERS’ EQUITY The Company’s capital structure consists of common stock and preferred stock.
F-12 N OTE 3 – CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES The following tables summarize the fair value of cash, cash equivalents and marketable securities as well as gross unrealized holding gains and losses as of December 31, 2024 and 2023: December 31, 2024 (in thousands) Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Fair Value Cash $ 522 $ — $ — $ 522 Cash equivalents 25,779 — — 25,779 Marketable securities 26,767 7 — 26,774 Total cash, cash equivalents and marketable securities $ 53,068 $ 7 $ — $ 53,075 December 31, 2023 (in thousands) Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Fair Value Cash $ 2,701 $ — $ — $ 2,701 Cash equivalents 24,340 — — 24,340 Marketable securities 78,791 1 — 78,792 Total cash, cash equivalents and marketable securities $ 105,833 $ 1 $ — $ 105,833 The Company did not hold any securities that were in an unrealized loss position for more than 12 months as of December 31, 2024 and 2023.
N OTE 3 – CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES The following tables summarize the fair value of cash, cash equivalents and marketable securities as well as gross unrealized holding gains and losses as of December 31, 2025 and 2024: December 31, 2025 (in thousands) Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Fair Value Cash $ 516 $ — $ — $ 516 Cash equivalents 12,636 1 — 12,637 Marketable securities 77,315 — (21) 77,294 Total cash, cash equivalents and marketable securities $ 90,467 $ 1 $ (21) $ 90,447 F-14 December 31, 2024 (in thousands) Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Fair Value Cash $ 522 $ — $ — $ 522 Cash equivalents 25,779 — — 25,779 Marketable securities 26,767 7 — 26,774 Total cash, cash equivalents and marketable securities $ 53,068 $ 7 $ — $ 53,075 The Company did not hold any securities that were in an unrealized loss position for more than 12 months as of December 31, 2025 and 2024.
For the years ended December 31, 2024 and 2023 the Company contributed $0.3 million. F-11 (O) Revenue Recognition Under ASC 606, Revenue from Contracts with Customers, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.
(O) Revenue Recognition Under ASC 606, Revenue from Contracts with Customers, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.
In the event of a liquidation, dissolution, or winding up of the Company, holders of Series A Preferred Stock will receive a payment equal to $0.001 per share of Series A Preferred Stock before any proceeds are distributed to the holders of common stock.
The Series A Preferred Stock was non-voting and had a liquidation preference such that in the event of a liquidation, dissolution, or winding up of the Company, holders of Series A Preferred Stock would receive a payment equal to $0.001 per share of Series A Preferred Stock before any proceeds were distributed to the holders of common stock.
Holders of Series A Preferred Stock are entitled to receive dividends paid to holders of common stock at an equal rate, in the same form, and in the same manner on an as-if-converted basis. Dividends Through December 31, 2024, the Company has not declared or paid any dividends.
Holders of Series A Preferred Stock were entitled to receive dividends paid to holders of common stock at an equal rate, in the same form, and in the same manner on an as-if-converted basis.
Consolidated Statements of Operations (in thousands, except share and per share data) For the Year Ended December 31, 2024 For the Year Ended December 31, 2023 Revenue: License and other revenue $ 566 $ 392 Total revenue 566 392 Operating expenses: Research and development 36,767 28,588 General and administrative 25,684 31,085 Total operating expenses 62,451 59,673 Loss from operations (61,885) (59,281) Other income (expense), net 35,452 6,943 Loss before provision for income taxes (26,433) (52,339) Provision for income taxes — — Net loss $ (26,433) $ (52,339) Net loss per share of Series A preferred stock, basic and diluted $ (366.33) $ (728.64) Weighted-average Series A preferred stock shares outstanding, basic and diluted 1,250 1,250 Net loss per share of common stock, basic and diluted $ (0.37) $ (0.73) Weighted-average common stock shares outstanding, basic and diluted 70,905,422 70,580,604 See accompanying notes to these consolidated financial statements F-4 OVID THERAPEUTICS INC.
Consolidated Statements of Operations (in thousands, except share and per share data) For the Year Ended December 31, 2025 For the Year Ended December 31, 2024 Revenue: License and other revenue $ 7,252 $ 566 Total revenue 7,252 566 Operating expenses: Research and development 25,582 36,767 General and administrative 24,109 25,684 Total operating expenses 49,691 62,451 Loss from operations (42,439) (61,885) Other income (expense), net 25,026 35,452 Loss before provision for income taxes (17,414) (26,433) Provision for income taxes — — Net loss $ (17,414) $ (26,433) Net loss per share of Series A preferred stock, basic and diluted $ (232.47) $ (366.33) Weighted-average Series A preferred stock shares outstanding, basic and diluted 1,171 1,250 Net loss per share of common stock, basic and diluted $ (0.23) $ (0.37) Weighted-average common stock shares outstanding, basic and diluted 73,735,606 70,905,422 See accompanying notes to these consolidated financial statements F-5 OVID THERAPEUTICS INC.
Pursuant to the Company’s amended and restated certificate of incorporation, as amended, the Company is authorized to issue up to 125,000,000 shares of common stock and 10,000,000 shares of preferred stock. The Company has designated 10,000 of the 10,000,000 authorized shares of preferred stock as non-voting Series A Convertible Preferred Stock (“Series A Preferred Stock”).
Pursuant to the Company’s amended and restated certificate of incorporation, as amended, the Company is authorized to issue up to 315,000,000 shares of common stock and 10,000,000 shares of preferred stock.
The Company’s stock-based compensation expense was recognized in operating expenses as follows: F-16 For the Year Ended December 31, (in thousands) 2024 2023 Research and development $ 1,631 $ 1,937 General and administrative 4,645 5,348 Total $ 6,276 $ 7,285 For the Year Ended December 31, (in thousands) 2024 2023 Stock options and RSUs $ 6,212 $ 7,228 Employee Stock Purchase Plan 65 57 Total $ 6,276 $ 7,285 The fair value of stock options granted during the years ended December 31, 2024 and 2023, respectively, was estimated by utilizing the following assumptions: For the Year Ended December 31, 2024 2023 Weighted Average Weighted Average Volatility 87.18 % 83.55 % Expected term in years 5.93 6.00 Dividend rate 0.00 % 0.00 % Risk-free interest rate 4.18 % 3.96 % Fair value of option on grant date $ 1.88 $ 2.14 F-17 The following table summarizes the number of options outstanding and the weighted average exercise price: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Options outstanding at December 31, 2022 12,961,238 $ 4.13 7.42 $ 62,158 Vested and exercisable at December 31, 2022 6,742,890 $ 5.05 6.20 $ 61,214 Granted 3,038,000 2.63 9.20 Exercised (146,346) 2.76 Forfeited or expired (728,346) 3.44 Options outstanding December 31, 2023 15,124,546 $ 3.87 6.90 $ 5,212,586 Vested and exercisable at December 31, 2023 9,649,094 $ 4.47 5.97 $ 2,464,620 Granted 4,699,810 2.58 5.87 Exercised (248,024) 3.13 Forfeited or expired (4,234,976) 3.77 Options outstanding December 31, 2024 15,341,356 $ 3.49 5.87 $ — Vested and exercisable at December 31, 2024 9,652,613 $ 4.07 5.87 $ — At December 31, 2024, there was $9.1 million of unamortized stock-based compensation expense, which is expected to be recognized over a remaining average vesting period of 2.15 years.
The Company’s stock-based compensation expense was recognized in operating expenses as follows: For the Year Ended December 31, (in thousands) 2025 2024 Research and development $ 1,497 $ 1,631 General and administrative 3,310 4,645 Total $ 4,807 $ 6,276 For the Year Ended December 31, (in thousands) 2025 2024 Stock options and RSUs $ 4,769 $ 6,212 ESPP 38 64 Total $ 4,807 $ 6,276 The fair value of stock options granted during the years ended December 31, 2025 and 2024, respectively, was estimated by utilizing the following assumptions: For the Year Ended December 31, 2025 2024 Weighted Average Weighted Average Volatility 97.02 % 87.18 % Expected term in years 6.02 5.93 Dividend rate 0.00 % 0.00 % Risk-free interest rate 4.29 % 4.18 % Fair value of option on grant date $ 0.55 $ 1.88 F-20 The following table summarizes the number of options outstanding and the weighted average exercise price: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value (in thousands) Options outstanding December 31, 2023 15,124,546 $ 3.87 6.90 $ 5,213 Vested and exercisable December 31, 2023 9,649,094 $ 4.47 5.97 $ 2,465 Granted 4,699,810 2.58 5.87 Exercised (248,024) 3.13 Forfeited or expired (4,234,976) 3.77 Options outstanding December 31, 2024 15,341,356 $ 3.49 5.87 $ — Vested and exercisable December 31, 2024 9,652,613 $ 4.07 5.87 $ — Granted 4,152,650 0.64 Exercised (60,372) 1.05 Forfeited or expired (1,820,282) 4.32 Options outstanding December 31, 2025 17,613,352 $ 2.68 6.56 $ 5,332 Vested and exercisable December 31, 2025 11,042,865 $ 3.49 5.25 $ 1 At December 31, 2025, there was $8.3 million of unamortized stock-based compensation expense, which is expected to be recognized over a remaining average vesting period of 2.39 years.
The Company has an accumulated deficit of $304.3 million as of December 31, 2024, working capital of $45.4 million and used $56.0 million of cash in operating activities for the year ended December 31, 2024.
The Company has an accumulated deficit of $321.7 million as of December 31, 2025, working capital of $66.1 million and used $38.3 million of cash in operating activities for the year ended December 31, 2025.
Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2024 For the Year Ended December 31, 2023 Cash flows from operating activities: Net loss $ (26,433) $ (52,339) Adjustments to reconcile net loss to cash used in operating activities: Change in fair value of royalty monetization liability (30,000) — Unrealized (gain) loss on equity investments (3,349) (2,003) Change in accrued interest and accretion of discount on marketable securities (2,765) (2,172) Stock-based compensation expense 6,276 7,285 Depreciation and amortization expense 613 568 Noncash operating lease expense 1,097 1,028 Change in lease liability (1,246) (534) Change in operating assets and liabilities: — — Prepaid expenses and other current assets 899 (1,385) Accounts payable (512) 1,750 Accrued expenses (537) 2,021 Net cash used in operating activities (55,956) (45,781) Cash flows from investing activities: Purchase of marketable securities (73,246) (112,443) Sales/maturities of marketable securities 128,000 120,000 Purchase of long-term equity investment — (10,000) Purchases of property and equipment (71) (40) Software development and other costs (90) (97) Net cash provided by (used in) investing activities 54,594 (2,581) Cash flows from financing activities: Proceeds from exercise of options and employee stock purchase plan 622 535 Proceeds from royalty monetization agreement — 30,000 Net cash provided by financing activities 622 30,535 Net decrease in cash, cash equivalents and restricted cash (740) (17,826) Cash, cash equivalents and restricted cash, at beginning of period 28,972 46,799 Cash, cash equivalents and restricted cash, at end of period $ 28,232 $ 28,972 See accompanying notes to these consolidated financial statements F-7 OVID THERAPEUTICS, INC.
Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2025 For the Year Ended December 31, 2024 Cash flows from operating activities: Net loss $ (17,414) $ (26,433) Adjustments to reconcile net loss to cash used in operating activities: Change in fair value of royalty monetization liability — (30,000) Unrealized gain on equity investments (21,052) (3,349) Change in accrued interest and accretion of discount on marketable securities (695) (2,765) Stock-based compensation expense 4,807 6,276 Depreciation and amortization expense 273 613 Noncash operating lease expense 1,187 1,097 Change in lease liability (1,336) (1,246) Change in operating assets and liabilities: Prepaid expenses and other current assets (1,802) 899 Accounts payable (1,234) (512) Accrued expenses (1,068) (537) Net cash used in operating activities (38,334) (55,956) Cash flows from investing activities: Purchase of marketable securities (91,854) (73,246) Sales/maturities of marketable securities 42,000 128,000 Purchases of property and equipment — (71) Software development and other costs — (90) Net cash (used in) provided by investing activities (49,854) 54,594 Cash flows from financing activities: Proceeds from private placement financing, net of transaction costs 75,116 — Proceeds from exercise of options and employee stock purchase plan 91 622 Net cash provided by financing activities 75,207 622 Effect of exchange rates on cash, cash equivalents and restricted cash (167) — Net decrease in cash, cash equivalents and restricted cash (13,148) (740) Cash, cash equivalents and restricted cash, at beginning of period 28,232 28,972 Cash, cash equivalents and restricted cash, at end of period $ 15,084 $ 28,232 See accompanying notes to these consolidated financial statements F-8 OVID THERAPEUTICS, INC.
Total unrecognized compensation expense related to stock options was $9.1 million and $9.4 million as of December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and 2023, the Company recognized no expense for performance-based option awards. The Company granted 348,575 RSUs during the year ended December 31, 2024.
Total unrecognized compensation expense related to stock options was $8.3 million and $9.1 million as of December 31, 2025 and 2024, respectively. The Company granted 327,326 and 348,575 RSUs during the years ended December 31, 2025 and 2024.
Consolidated Balance Sheets (in thousands, except share and per share data) December 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 26,301 $ 27,042 Marketable securities 26,774 78,792 Prepaid expenses and other current assets 2,865 3,763 Total current assets 55,940 109,598 Long-term equity investments 20,974 17,626 Restricted cash 1,931 1,931 Right-of-use asset, net 12,797 13,894 Property and equipment, net 433 769 Other assets 92 210 Total assets $ 92,167 $ 144,027 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 3,191 $ 3,703 Accrued expenses 5,994 6,524 Current portion, lease liability 1,336 1,246 Total current liabilities 10,522 11,473 Long-term liabilities: Lease liability 13,419 14,756 Royalty monetization liability — 30,000 Total liabilities 23,941 56,230 Stockholders ’ equity: Preferred stock, $0.001 par value; 10,000,000 shares authorized; Series A convertible preferred stock, 10,000 shares designated, 1,250 shares issued and outstanding at December 31, 2024 and 2023 — — Common stock, $0.001 par value; 125,000,000 shares authorized; 71,009,866 and 70,691,992 shares issued and outstanding at December 31, 2024 and 2023, respectively 71 71 Additional paid-in-capital 372,489 365,591 Accumulated other comprehensive income (loss) (35) 1 Accumulated deficit (304,299) (277,865) Total stockholders ’ equity 68,226 87,797 Total liabilities and stockholders ’ equity $ 92,167 $ 144,027 See accompanying notes to these consolidated financial statements F-3 OVID THERAPEUTICS INC.
Consolidated Balance Sheets (in thousands, except share and per share data) December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 13,153 $ 26,301 Marketable securities 56,482 26,774 Prepaid expenses and other current assets 4,733 2,865 Total current assets 74,368 55,940 Marketable securities - noncurrent 20,812 — Long-term equity investments 41,961 20,974 Restricted cash 1,931 1,931 Right-of-use asset, net 11,610 12,797 Property and equipment, net 252 433 Other assets — 92 Total assets $ 150,934 $ 92,167 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 1,956 $ 3,192 Accrued expenses 4,899 5,994 Current portion, lease liability 1,433 1,336 Total current liabilities 8,288 10,522 Long-term liabilities: Lease liability 11,986 13,419 Total liabilities 20,274 23,941 Stockholders ’ equity: Preferred stock, $0.001 par value; 10,000,000 shares authorized; Series A convertible preferred stock, 10,000 shares designated, 0 and 1,250 shares issued and outstanding at December 31, 2025 and 2024, respectively — — Common stock, $0.001 par value; 315,000,000 and 125,000,000 shares authorized; 130,184,353 and 71,009,866 shares issued and outstanding at December 31, 2025 and 2024, respectively 130 71 Additional paid-in-capital 452,445 372,489 Accumulated other comprehensive loss (202) (35) Accumulated deficit (321,713) (304,299) Total stockholders ’ equity 130,660 68,226 Total liabilities and stockholders ’ equity $ 150,934 $ 92,167 See accompanying notes to these consolidated financial statements F-4 OVID THERAPEUTICS INC.
As of December 31, 2024 and 2023, the equity investment in Graviton had carrying values of $15.8 million and $11.2 million, respectively, which reflect unrealized gains recognized during the periods and recorded in other income (expense), net, in the consolidated statements of operations due to an observable change in price.
As of December 31, 2025 and 2024, the equity investment in Graviton had a carrying value of $36.8 million and $15.8 million, respectively, which reflect unrealized gains of $21.0 million and $4.6 million recorded in other income (expense), net, in the consolidated statements of operations for the periods ended December 31, 2025 and 2024, respectively, due to observable changes in price.
(E) Long-term Equity Investments Long-term equity investments consist of equity investments in the preferred shares of Gensaic, Inc., formerly M13 Therapeutics, Inc. (“Gensaic”), and Graviton Bioscience Corporation (“Graviton”), both privately held corporations.
Amounts are reported as non-current unless restrictions are expected to be released in the next 12 months. (E) Long-term Equity Investments Long-term equity investments consist of equity investments in the preferred shares of Gensaic, Inc., formerly M13 Therapeutics, Inc. (“Gensaic”), and Graviton Bioscience Corporation (“Graviton”), both privately held corporations.
Takeda assumed all responsibility for, and costs of, both development and commercialization of soticlestat, and the Company will no longer have any financial obligation to Takeda under the original collaboration agreement, including milestone payments or any future development and commercialization costs.
Under the RLT Agreement, all rights in soticlestat are owned by Takeda or exclusively licensed to Takeda by the Company. Takeda assumed all responsibility for, and costs of, both development and commercialization of soticlestat, and the Company no longer had any financial obligation to Takeda under the original collaboration agreement.
For any period in which the Company records net income, diluted net income per share is calculated in the same manner as basic net loss per share, except that diluted net loss per common share includes outstanding common stock and common shares underlying outstanding options in the number of shares used to allocate net loss to share classes and as the denominator in calculating net loss per common share - diluted.
Diluted net income per common share includes outstanding common stock, common shares underlying outstanding options and unvested RSUs in the number of shares used to allocate net loss to share classes and as the denominator in calculating net loss per common share - diluted.
Management does not believe that any recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying consolidated financial statements.
The Company adopts new pronouncements relating to GAAP applicable to the Company as they are issued, and based upon the effective dates included in the pronouncements. Management does not believe that any recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying consolidated financial statements.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term.
Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term.
During the years ended December 31, 2024 and 2023, no income or expense was recognized pursuant to the RLT Agreement. In June 2024, Takeda issued a press release indicating the soticlestat trials missed their primary endpoints and noted that while Takeda would discuss the program with FDA, Takeda fully impaired the asset representing soticlestat.
In June 2024, Takeda issued a press release indicating the soticlestat trials missed their primary endpoints and noted that while Takeda would discuss the program with FDA, Takeda fully impaired the asset representing soticlestat. In January 2025, Takeda discontinued the program.
Consolidated Statement of Changes in Stockholders’ Equity (in thousands, except shares) Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shares Amount Shares Amount Balance, December 31, 2023 1 $ — 70,691,992 $ 71 $ 365,591 $ 1 $ (277,866) $ 87,797 Issuance of common stock from exercise of stock options and purchases from employee stock purchase plan — — 317,874 — 622 — — 622 Stock-based compensation expense — — — — 6,276 — — 6,276 Other comprehensive loss — — — — — (36) — (36) Net loss — — — — — — (26,433) (26,433) Balance, December 31, 2024 1 $ — 71,009,866 $ 71 $ 372,489 $ (35) $ (304,299) $ 68,226 (in thousands, except shares) Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shares Amount Shares Amount Balance, December 31, 2022 1 $ — 70,466,885 $ 70 $ 357,771 $ (42) $ (225,527) $ 132,273 Issuance of common stock from exercise of stock options and purchases from employee stock purchase plan — — 225,107 — 535 — — 535 Stock-based compensation expense — — — — 7,285 — — 7,285 Other comprehensive income — — — — — 43 — 43 Net loss — — — — — — (52,339) (52,339) Balance, December 31, 2023 1 $ — 70,691,992 $ 71 $ 365,591 $ 1 $ (277,866) $ 87,797 See accompanying notes to these consolidated financial statements F-6 OVID THERAPEUTICS INC.
Consolidated Statement of Changes in Stockholders’ Equity (in thousands, except shares) Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shares Amount Shares Amount Balance, December 31, 2024 1,250 $ — 71,009,866 $ 71 $ 372,489 $ (35) $ (304,299) $ 68,226 Conversion of Series A convertible preferred stock to common stock (1,250) — 1,250,000 1 (1) — — — Conversion of Series B convertible preferred stock to common stock — — 57,722,000 58 49,251 — — 49,309 Issuance of Series A warrants — — — — 13,802 — — 13,802 Issuance of Series B warrants — — — — 17,700 — — 17,700 Expenses related to the sale of Series B preferred stock and Series A and Series B warrants — — — — (5,694) — — (5,694) Issuance of common stock from exercise of stock options and purchases from employee stock purchase plan — — 202,487 — 91 — — 91 Stock-based compensation expense — — — — 4,807 — — 4,807 Other comprehensive loss — — — — — (167) — (167) Net loss — — — — — — (17,414) (17,414) Balance, December 31, 2025 — $ — 130,184,353 $ 130 $ 452,445 $ (202) $ (321,713) $ 130,660 (in thousands, except shares) Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shares Amount Shares Amount Balance, December 31, 2023 1,250 $ — 70,691,992 $ 71 $ 365,591 $ 1 $ (277,866) $ 87,797 Issuance of common stock from exercise of stock options and purchases from employee stock purchase plan — — 317,874 — 622 — — 622 Stock-based compensation expense — — — — 6,276 — — 6,276 Other comprehensive loss — — — — — (36) — (36) Net loss — — — — — — (26,433) (26,433) Balance, December 31, 2024 1,250 $ — 71,009,866 $ 71 $ 372,489 $ (35) $ (304,299) $ 68,226 See accompanying notes to these consolidated financial statements F-7 OVID THERAPEUTICS INC.
Other income/expense includes decrease in fair value of royalty monetization liability, loss on fraudulent funds transfer, unrealized net gain on equity investments and interest/accretion income on securities.
Other research and development expenses include general office expenses allocated to research and development, including costs related to rent and depreciation of leasehold improvements, and nonclinical contract labor. Other income/expense includes decrease in fair value of royalty monetization liability, gain/loss on fraudulent funds transfer, unrealized net gain on equity investments and interest/accretion income on securities.
The Company has the right to terminate the agreement for any reason upon prior written notice or for an uncured material breach by Northwestern. Northwestern may terminate the agreement for the Company’s uncured material breach or insolvency.
The Company has the right to terminate the agreement for any reason upon prior written notice or for an uncured material breach by Northwestern. Northwestern may terminate the agreement for the Company’s uncured material breach or insolvency. The Company incurred licensing expenses related to Northwestern of $20,000 and $100,000 in the years ended December 31, 2025 and 2024, respectively.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeEvents that may prevent successful or timely completion of clinical development include: • our inability to generate sufficient preclinical, toxicology or other data to support the initiation of clinical trials; • our inability to develop and validate disease-relevant clinical endpoints; • delays in reaching a consensus with regulatory authorities on trial design; • delays in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical trial sites; • delays in opening investigational sites; • delays or difficulty in recruiting and enrollment of suitable patients to participate in our clinical trials; • imposition of a clinical hold by regulatory authorities because of a serious adverse event, concerns with a class of drug candidates or after an inspection of our clinical trial operations or trial sites; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • occurrence of serious adverse events associated with the drug candidate that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; or • business interruptions resulting from global geopolitical tensions, including tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, and any other war or the perception that hostilities may be imminent, terrorism, natural disasters or public health crises. 31 Further, clinical endpoints for certain diseases we are targeting, including brain conditions with significant unmet need, have not been established, and accordingly, we may have to develop new modalities or modify existing endpoints to measure efficacy, which may increase the time it takes for us to commence or complete clinical trials.
Biggest changeEvents that may prevent successful or timely completion of clinical development include: • our inability to generate sufficient preclinical, toxicology or other data to support the initiation of clinical trials; • our inability to develop and validate disease-relevant clinical endpoints; • delays in reaching a consensus with regulatory authorities on trial design; • delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites; • delays in opening investigational sites; • delays or difficulty in recruiting and enrollment of suitable patients to participate in our clinical trials; • imposition of a clinical hold by regulatory authorities because of a serious adverse event, concerns with a class of drug candidates or after an inspection of our clinical trial operations or trial sites; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • occurrence of serious adverse events associated with the drug candidate that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; or • business interruptions resulting from global geopolitical tensions and wars, or the perception that hostilities may be imminent, terrorism, natural disasters or public health crises.
These estimates have been derived from a variety of sources, including the scientific literature, patient foundations, or market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these disorders. The number of patients may turn out to be lower than expected.
These estimates have been derived from a variety of sources, including scientific literature, patient foundations, or market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these disorders. The number of patients may turn out to be lower than expected.
Our current and future collaborations could subject us to a number of risks, including: • we may be required to undertake the expenditure of substantial operational, financial and management resources; • we may be required to issue equity securities that would dilute our stockholders’ percentage of ownership; • we may be required to assume substantial actual or contingent liabilities; • we may not be able to control the amount and timing of resources that our strategic collaborators devote to the development or commercialization of our drug candidates; • strategic collaborators may delay clinical trials, provide insufficient funding, terminate a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new version of a drug candidate for clinical testing; • strategic collaborators may not pursue further development and commercialization of products resulting from the strategic collaboration arrangement or may elect to discontinue research and development programs; • strategic collaborators may not commit adequate resources to the marketing and distribution of our drug candidates, limiting our potential revenues from these products; • we rely on our current collaborators to manufacture drug substance and drug product and may do so with respect to future collaborators, which could result in disputes or delays; • disputes may arise between us and our strategic collaborators that result in the delay or termination of the research, development or commercialization of our drug candidates or that result in costly litigation or arbitration that diverts management’s attention and consumes resources; 37 • disputes may arise between us and our current or future collaborators regarding any termination of any collaboration, license, or other business development arrangement in which we may enter; • strategic collaborators may experience financial difficulties; • strategic collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation; • business combinations or significant changes in a strategic collaborator’s business strategy may also adversely affect a strategic collaborator’s willingness or ability to complete its obligations under any arrangement; • strategic collaborators could decide to move forward with a competing drug candidate developed either independently or in collaboration with others, including our competitors; and • strategic collaborators could terminate the arrangement or allow it to expire, which would delay the development and may increase the cost of developing our drug candidates.
Our current and future collaborations could subject us to a number of risks, including: • we may be required to undertake the expenditure of substantial operational, financial and management resources; • we may be required to issue equity securities that would dilute our stockholders’ percentage of ownership; • we may be required to assume substantial actual or contingent liabilities; • we may not be able to control the amount and timing of resources that our strategic collaborators devote to the development or commercialization of our drug candidates; • strategic collaborators may delay clinical trials, provide insufficient funding, terminate a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new version of a drug candidate for clinical testing; • strategic collaborators may not pursue further development and commercialization of products resulting from the strategic collaboration arrangement or may elect to discontinue research and development programs; • strategic collaborators may not commit adequate resources to the marketing and distribution of our drug candidates, limiting our potential revenues from these products; • we rely on our current collaborators to manufacture drug substance and drug product and may do so with respect to future collaborators, which could result in disputes or delays; • disputes may arise between us and our strategic collaborators that result in the delay or termination of the research, development or commercialization of our drug candidates or that result in costly litigation or arbitration that diverts management’s attention and consumes resources; • disputes may arise between us and our current or future collaborators regarding any termination of any collaboration, license, or other business development arrangement in which we may enter; • strategic collaborators may experience financial difficulties; • strategic collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation; • business combinations or significant changes in a strategic collaborator’s business strategy may also adversely affect a strategic collaborator’s willingness or ability to complete its obligations under any arrangement; • strategic collaborators could decide to move forward with a competing drug candidate developed either independently or in collaboration with others, including our competitors; and • strategic collaborators could terminate the arrangement or allow it to expire, which would delay the development and may increase the cost of developing our drug candidates.
If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties. • Coverage and adequate reimbursement may not be available for our current or any future drug candidates, which could make it difficult for us to sell profitably, if approved. • If we are unable to obtain and maintain patent protection for our current or any future drug candidates, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. • We may be involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time consuming and unsuccessful. • We do not have our own manufacturing capabilities and will rely on third parties to produce clinical and commercial supplies of our current and any future drug candidates. • We intend to rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business. • We may need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations. • We may be subject to numerous and varying privacy and security laws, and our failure to comply could result in penalties and reputational damage. • We have previously identified material weaknesses in our internal control over financial reporting.
If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties. • Coverage and adequate reimbursement may not be available for our current or any future drug candidates, which could make it difficult for us to sell profitably, if approved. • If we are unable to obtain and maintain patent protection for our current or any future drug candidates, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. • We may be involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time consuming and unsuccessful. • We do not have our own manufacturing capabilities and will rely on third parties to produce clinical and commercial supplies of our current and any future drug candidates. • We rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business. • We may need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations. • We are subject to numerous and varying privacy and security laws, and our failure to comply could result in penalties and reputational damage. • We have previously identified material weaknesses in our internal control over financial reporting.
The market price for our common stock may be influenced by many factors, including: • results of clinical trials of our current and any future drug candidates or those of our competitors; • the success of competitive drugs or therapies; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; 57 • the level of expenses related to our current and any future drug candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license additional drug candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • our inability to obtain or delays in obtaining adequate drug supply for any approved drug or inability to do so at acceptable prices; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions, including supply chain disruptions and inflationary pressure; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • results of clinical trials of our current and any future drug candidates or those of our competitors; • the success of competitive drugs or therapies; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to our current and any future drug candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license additional drug candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • our inability to obtain or delays in obtaining adequate drug supply for any approved drug or inability to do so at acceptable prices; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions, including supply chain disruptions and inflationary pressure; and • the other factors described in this “Risk Factors” section.
The following examples are illustrative: • others may be able to make compounds or formulations that are similar to our drug candidates but that are not covered by the claims of any patents, should they issue, that we own or control; • we or any strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or control; • we might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or control may not provide us with any competitive advantages, or may be held invalid or unenforceable because of legal challenges; • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive drugs for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
The following examples are illustrative: • others may be able to make compounds or formulations that are similar to our drug candidates but that are not covered by the claims of any patents, should they issue, that we own or control; • we or any strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or control; • we might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or control may not provide us with any competitive advantages, or may be held invalid or unenforceable because of legal challenges; • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive drugs for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and 44 • the patents of others may have an adverse effect on our business.
Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured drug candidates ourselves, including: • inability to meet our drug specifications and quality requirements consistently; • delay or inability to procure or expand sufficient manufacturing capacity; • issues related to scale-up of manufacturing; • costs and validation of new equipment and facilities required for scale-up; • failure to comply with cGMP and similar foreign standards; • inability to negotiate manufacturing agreements with third parties under commercially reasonable terms, if at all; • termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; • reliance on single sources for drug components; • lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier; • operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier; and • carrier disruptions or increased costs that are beyond our control.
Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured drug candidates ourselves, including: • inability to meet our drug specifications and quality requirements consistently; • delay or inability to procure or expand sufficient manufacturing capacity; • issues related to scale-up of manufacturing; • costs and validation of new equipment and facilities required for scale-up; • failure to comply with cGMP and similar foreign standards; • inability to negotiate manufacturing agreements with third parties under commercially reasonable terms, if at all; • termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; • reliance on single sources for drug components; • lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier; 47 • operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier; and • carrier disruptions or increased costs that are beyond our control.
Any potential acquisition or strategic partnership may entail numerous risks, including: • increased operating expenses and cash requirements; • the assumption of additional indebtedness or contingent liabilities; • assimilation of operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel; • the diversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership, merger or acquisition; • retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or drug candidates and regulatory approvals; • our inability to generate revenue from acquired technology and/or drugs sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs; • challenges related to integrating acquired businesses or entering into or realizing the benefits of strategic transactions generally; and • risks associated with potential international acquisition transactions, including in countries where we do not currently have a material presence.
Any potential acquisition or strategic partnership may entail numerous risks, including: • increased operating expenses and cash requirements; • the assumption of additional indebtedness or contingent liabilities; • assimilation of operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel; 36 • the diversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership, merger or acquisition; • retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or drug candidates and regulatory approvals; • our inability to generate revenue from acquired technology and/or drugs sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs; • challenges related to integrating acquired businesses or entering into or realizing the benefits of strategic transactions generally; and • risks associated with potential international acquisition transactions, including in countries where we do not currently have a material presence.
Even if we identify drug candidates that initially show promise, we may fail to in- 32 license or acquire these assets and may also fail to successfully develop and commercialize such drug candidates for many reasons, including the following: • the research methodology used may not be successful in identifying potential drug candidates; • competitors may develop alternatives that render any drug candidate we develop obsolete; • any drug candidate we develop may nevertheless be covered by third parties’ patents or other exclusive rights; • a drug candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • a drug candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and • a drug candidate may not be accepted as safe and effective by physicians, patients, the medical community or third-party payors, even if approved.
Even if we identify drug candidates that initially show promise, we may fail to in-license or acquire these assets and may also fail to successfully develop and commercialize such drug candidates for many reasons, including the following: • the research methodology used may not be successful in identifying potential drug candidates; • competitors may develop alternatives that render any drug candidate we develop obsolete; • any drug candidate we develop may nevertheless be covered by third parties’ patents or other exclusive rights; • a drug candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • a drug candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and • a drug candidate may not be accepted as safe and effective by physicians, patients, the medical community or third-party payors, even if approved.
The degree of market acceptance of our current or future drug candidates, if approved for commercial sale, will depend on a number of factors, including but not limited to: • the efficacy and potential advantages compared to alternative treatments and therapies; • the safety profile of our drug candidate compared to alternative treatments and therapies; • effectiveness of sales and marketing efforts; • the strength of our relationships with patient communities; • the cost of treatment in relation to alternative treatments and therapies, including any similar generic treatments; • our ability to offer such drug for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments and therapies; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support; • the availability of third-party coverage and adequate reimbursement; • the prevalence and severity of any side effects; and • any restrictions on the use of the drug together with other medications.
The degree of market acceptance of our current or future drug candidates, if approved for commercial sale, will depend on a number of factors, including but not limited to: • the efficacy and potential advantages compared to alternative treatments and therapies; 33 • the safety profile of our drug candidate compared to alternative treatments and therapies; • effectiveness of sales and marketing efforts; • the strength of our relationships with patient communities; • the cost of treatment in relation to alternative treatments and therapies, including any similar generic treatments; • our ability to offer such drug for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments and therapies; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support; • the availability of third-party coverage and adequate reimbursement; • the prevalence and severity of any side effects; and • any restrictions on the use of the drug together with other medications.
If we fail to comply with applicable regulatory requirements following approval of our current or future drug candidates, a regulatory authority may: • issue an untitled letter or warning letter asserting that we are in violation of the law; • seek an injunction or impose administrative, civil or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; • suspend any ongoing clinical trials; • refuse to approve a pending NDA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners; • restrict the marketing or manufacturing of the drug; • seize or detain the drug or otherwise require the withdrawal of the drug from the market; • refuse to permit the import or export of drug candidates; or • refuse to allow us to enter into supply contracts, including government contracts.
If we fail to comply with applicable regulatory requirements following approval of our current or future drug candidates, a regulatory authority may: • issue an untitled letter or warning letter asserting that we are in violation of the law; • seek an injunction or impose administrative, civil or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; • suspend any ongoing clinical trials; • refuse to approve a pending NDA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners; • restrict the marketing or manufacturing of the drug; • seize or detain the drug or otherwise require the withdrawal of the drug from the market; 41 • refuse to permit the import or export of drug candidates; or • refuse to allow us to enter into supply contracts, including government contracts.
If we, or our licensees or collaborators, are not able to obtain the required regulatory approvals, we, or our licensees or collaborators, will not be able to commercialize our drug candidates, and our ability to generate revenue will be adversely affected. • Because the results of preclinical studies or earlier clinical trials are not necessarily predictive of future results, our drug candidates may not have favorable results in planned or future preclinical studies or clinical trials, or may not receive regulatory approval. • Interim topline and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures, which could result in material changes in the final data. • Preclinical studies and clinical trials are very expensive, time consuming and difficult to design and implement and involve uncertain outcomes.
If we, or our licensees or collaborators, are not able to obtain the required regulatory approvals, we, or our licensees or collaborators, will not be able to commercialize our drug candidates, and our ability to generate revenue will be adversely affected. • Because the results of preclinical studies or earlier clinical trials are not necessarily predictive of future results, our drug candidates may not have favorable results in planned or future preclinical studies or clinical trials, or may not receive regulatory approval. 23 • Interim topline and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures, which could result in material changes in the final data. • Preclinical studies and clinical trials are very expensive, time-consuming and difficult to design and implement and involve uncertain outcomes.
We anticipate that our expenses will increase substantially if, and as, we: • continue the ongoing and planned preclinical and clinical development of our drug candidates; • continue to build a portfolio of drug candidates through the acquisition or in-license of drugs, drug candidates or technologies; • initiate preclinical studies and clinical trials for any additional drug candidates that we may pursue in the future; • seek marketing approvals for our current and future drug candidates that successfully complete clinical trials; • establish a sales, marketing and distribution infrastructure to commercialize any drug candidate for which we may obtain marketing approval; • develop, maintain, expand and protect our intellectual property portfolio; • implement operational, financial and management systems; and • attract, hire and retain additional administrative, clinical, regulatory and scientific personnel.
We anticipate that our expenses will increase substantially if, and as, we: • continue the ongoing and planned preclinical and clinical development of our drug candidates; • continue to build a portfolio of drug candidates through the acquisition or in-license of drugs, drug candidates or technologies; • initiate preclinical studies and clinical trials for any additional drug candidates that we may pursue in the future; • seek marketing approvals for our current and future drug candidates that successfully complete clinical trials; • establish a sales, marketing and distribution infrastructure to commercialize any drug candidate for which we may obtain marketing approval; 25 • develop, maintain, expand and protect our intellectual property portfolio; • implement operational, financial and management systems; and • attract, hire and retain additional administrative, clinical, regulatory and scientific personnel.
If our information technology systems or data, or those of the third parties upon with whom we work, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, interruptions to our operations such as our clinical 51 trials, claims that we breached our data protection obligations, harm to our reputation, and a loss of future customers or sales and other adverse consequences.
If our information technology systems or data, or those of the third parties upon with whom we work, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, interruptions to our operations such as our clinical trials, claims that we breached our data protection obligations, harm to our reputation, and a loss of future customers or sales and other adverse consequences.
In addition, it is possible that illnesses, injuries, discomforts or other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials will be reported by 33 subjects as we test our drug candidates in larger, longer and more extensive clinical programs, or, as use of these drug candidates becomes more widespread if they receive regulatory approval.
In addition, it is possible that illnesses, injuries, discomforts or other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials will be reported by subjects as we test our drug candidates in larger, longer and more extensive clinical programs, or, as use of these drug candidates becomes more widespread if they receive regulatory approval.
We and the third parties with whom we work are subject to stringent and evolving privacy and security laws, regulations, contractual obligations, industry standards, policies, and other obligations, and our failure or perceived 53 failure to comply with such obligations could result in regulatory investigations or actions, litigation (including class actions), fines and penalties, disruptions of our business operations, loss of revenue or profits, reputational damage and other adverse business consequences.
We and the third parties with whom we work are subject to stringent and evolving privacy and security laws, regulations, contractual obligations, industry standards, policies, and other obligations, and our failure or perceived failure to comply with such obligations could result in regulatory investigations or actions, litigation (including class actions), fines and penalties, disruptions of our business operations, loss of revenue or profits, reputational damage and other adverse business consequences.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in 59 which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs.
If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or 26 equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs.
However, our operating plans may change because of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.
However, our operating plans may change because of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, third-party 24 funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.
If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our common stock. 47 Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our current and any future drug candidates.
If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our common stock. Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our current and any future drug candidates.
We have no prior experience in these areas. In addition, there are complex regulatory, tax, labor and other legal requirements imposed by many of the individual countries in and outside of Europe with which we will need to comply. 36 Many biopharmaceutical companies have found the process of marketing their own products in foreign countries to be very challenging.
We have no prior experience in these areas. In addition, there are complex regulatory, tax, labor and other legal requirements imposed by many of the individual countries in and outside of Europe with which we will need to comply. Many biopharmaceutical companies have found the process of marketing their own products in foreign countries to be very challenging.
The current presidential administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.
The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at HHS, the FDA, CMS and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.
Even if we obtain approval from the FDA and comparable foreign regulatory authorities for our current and future drug candidates, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements.
Even if we obtain approval from the FDA and comparable foreign regulatory authorities for our current and future drug candidates, any approval might contain significant limitations related to use restrictions for specified age groups, 28 warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements.
Potential competitors also include academic institutions, government agencies and other public and 34 private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. More established companies may have a competitive advantage over us due to their greater size, resources and institutional experience.
Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. More established companies may have a competitive advantage over us due to their greater size, resources and institutional experience.
We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. Risks Related to Licensing and Collaboration Arrangements We may be required to relinquish important rights to and control over the development and commercialization of our drug candidates to any future collaborators.
We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. 35 Risks Related to Licensing and Collaboration Arrangements We may be required to relinquish important rights to and control over the development and commercialization of our drug candidates to any future collaborators.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may 43 not achieve or sustain profitability, which would harm our business, financial condition, results of operations and prospects.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would harm our business, financial condition, results of operations and prospects.
Without patent protection for our current or future drug candidates, we may be open to competition from generic versions of such drugs. Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
Without patent protection for our current or future drug candidates, we may be open to competition from generic versions of such drugs. Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such 43 candidates are commercialized.
If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their drug earlier than might otherwise be the case. 45 Intellectual property rights do not necessarily address all potential threats to our business.
If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their drug earlier than might otherwise be the case. Intellectual property rights do not necessarily address all potential threats to our business.
Significant disruptions of our, our third-party vendors’ and/or business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss, 52 misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive data, which could result in financial, legal, regulatory, business and reputational harm to us.
Significant disruptions of our, our third-party vendors’ and/or business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive data, which could result in financial, legal, regulatory, business and reputational harm to us.
Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our drug candidates, we may: • be delayed in obtaining marketing approval, if at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • be subject to additional post-marketing testing requirements; • be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; • have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy; • be subject to the addition of labeling statements, such as warnings or contraindications; • be sued; or • experience damage to our reputation.
Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our drug candidates, we may: • be delayed in obtaining marketing approval, if at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • be subject to additional post-marketing testing requirements; • be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; • have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy (“REMS”); • be subject to the addition of labeling statements, such as warnings or contraindications; • be sued; or 30 • experience damage to our reputation.
Additionally, we do not currently maintain “key person” life insurance on the lives of our executives or any of our employees. 50 We may need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations. In connection with our future growth plans, we may need to hire additional employees.
Additionally, we do not currently maintain “key person” life insurance on the lives of our executives or any of our employees. We may need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations. In connection with our future growth plans, we may need to hire additional employees.
Further, coverage policies and third-party payor reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future. Healthcare legislative reform measures may have a negative impact on our business and results of operations.
Further, coverage policies and third-party payor reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future. 39 Healthcare legislative reform measures may have a negative impact on our business and results of operations.
Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later 42 determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.
Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.
Failure to obtain this necessary capital when needed will force us to delay, limit or terminate certain of our drug development efforts or other operations. • We expect to continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability. • Our operating history may make it difficult to evaluate the success of our business to date and to assess our future viability. • Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy, natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance. • Our ability to raise capital may be limited by applicable laws and regulations. • We may sell additional equity or debt securities or enter into other arrangements to fund our operations, which may result in dilution to our stockholders and impose restrictions or limitations on our business. 24 • Sales of a substantial number of shares of our common stock in the public market could cause the market price of our common stock to drop significantly. • We are early in our drug development efforts of our current drug candidates and all of our drug candidates are in clinical trials or preclinical development.
Failure to obtain this necessary capital when needed will force us to delay, limit or terminate certain of our drug development efforts or other operations. • We expect to continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability. • Our operating history may make it difficult to evaluate the success of our business to date and to assess our future viability. • Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy, natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance. • Our ability to raise capital may be limited by applicable laws and regulations. • We may sell additional equity or debt securities or enter into other arrangements to fund our operations, which may result in dilution to our stockholders and impose restrictions or limitations on our business. • Sale of a substantial number of shares of our common stock in the public market could cause the market price of our common stock to drop significantly. • We are early in our drug development efforts of our current drug candidates and all of our drug candidates are in clinical trials or preclinical development.
Any significant delay in the supply of a drug candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could 48 considerably delay completion of our clinical trials, product testing and potential regulatory approval of our drug candidates.
Any significant delay in the supply of a drug candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our drug candidates.
Claims that we have misappropriated the confidential information or trade 46 secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects. See the section herein titled “Item 3. Legal Proceedings” for additional information.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects. See the section herein titled “Item 3. Legal Proceedings” for additional information.
If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can discover and develop our products and product candidates will be harmed, which could negatively impact our financial condition, results of operations and cash flows.
If we are 49 unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can discover and develop our products and product candidates will be harmed, which could negatively impact our financial condition, results of operations and cash flows.
Additionally, certain data privacy and security obligations will require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data. Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.
Additionally, certain data privacy and security obligations will require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data. 51 Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.
In addition, drug manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the NDA, BLA or foreign marketing application.
In addition, drug manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the NDA or foreign marketing application.
We intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our preclinical studies and clinical trials, and we expect to have limited influence over their actual performance. We intend to rely upon CROs to monitor and manage data for our clinical programs, as well as the execution of future preclinical studies.
We rely on CROs and clinical trial sites to ensure the proper and timely conduct of our preclinical studies and clinical trials, and we expect to have limited influence over their actual performance. We rely upon CROs to monitor and manage data for our clinical programs, as well as the execution of future preclinical studies.
While all information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks and exposures, the accessibility and distributed nature of our information technology systems, and the sensitive data stored on those systems, make such systems vulnerable to unintentional or malicious, internal and external attacks on our technology environment.
While all information technology operations are inherently vulnerable to inadvertent or intentional security 50 breaches, incidents, attacks and exposures, the accessibility and distributed nature of our information technology systems, and the sensitive data stored on those systems, make such systems vulnerable to unintentional or malicious, internal and external attacks on our technology environment.
Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a negative impact on our business, financial condition and prospects.
Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not 48 encounter challenges or delays in the future or that these delays or challenges will not have a negative impact on our business, financial condition and prospects.
We are unable to predict when, if ever, we will enter into any additional strategic collaborations because of the numerous risks and 38 uncertainties associated with establishing them, and we cannot predict the success of any collaborations that we enter into. We may enter into strategic collaborations that we subsequently no longer wish to pursue.
We are unable to predict when, if ever, we will enter into any additional strategic collaborations because of the numerous risks and uncertainties associated with establishing them, and we cannot predict the success of any collaborations that we enter into. We may enter into strategic collaborations that we subsequently no longer wish to pursue.
These laws will impact, among other things, our clinical research, proposed sales, marketing and educational programs. In addition, we may be subject to patient privacy laws by both the federal government and the states in which we conduct or may conduct our business.
These laws will impact, among other things, our clinical research, 37 proposed sales, marketing and educational programs. In addition, we may be subject to patient privacy laws by both the federal government and the states in which we conduct or may conduct our business.
These drugs may compete with our drugs in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.
These drugs may 46 compete with our drugs in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.
We intend to rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business. We do not currently have the ability to independently conduct any preclinical studies or clinical trials.
We rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business. We do not currently have the ability to independently conduct any preclinical studies or clinical trials.
Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application.
There is 42 no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application.
One third-party payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug. 40 Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved.
One third-party payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved.
Identifying and qualifying patients to participate in our clinical trials is critical to our success. The number of patients suffering from the disorders that we are targeting is small and has not been established with precision.
Identifying and qualifying patients to participate in our clinical trials is critical 31 to our success. The number of patients suffering from the disorders that we are targeting is small and has not been established with precision.
We will be a smaller reporting company and may take advantage of the scaled-back disclosures available to smaller reporting companies for so long as (i) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $250.0 million measured on the last business day of our most recently completed second fiscal quarter or (ii) (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of 55 our voting and non-voting ordinary shares held by non-affiliates is less than $700.0 million measured on the last business day of our most recently completed second fiscal quarter.
We will be a smaller reporting company and may take advantage of the scaled-back disclosures available to smaller 54 reporting companies for so long as (i) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $250.0 million measured on the last business day of our most recently completed second fiscal quarter or (ii) (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year and (b) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $700.0 million measured on the last business day of our most recently completed second fiscal quarter.
For additional details, see elsewhere in these Risk Factors, including “ Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy, natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance .” 26 We expect to continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability.
For additional details, see elsewhere in these Risk Factors, including “ Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy (including tariffs), natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance .” We expect to continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability.
We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret 49 protection and allow our potential competitors to access and exploit our proprietary technology.
We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret protection and allow our potential competitors to access and exploit our proprietary technology.
We cannot predict with any certainty if or when we might submit an NDA or BLA for any of our product candidates or whether any such application will be approved by the FDA.
We cannot predict with any certainty if or when we might submit an NDA for any of our product candidates or whether any such application will be approved by the FDA.
Among other things, these provisions: • establish a classified board of directors such that not all members of the board are elected at one time; • allow the authorized number of our directors to be changed only by resolution of our board of directors; • limit the manner in which stockholders can remove directors from the board of directors; • establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; • limit who may call stockholder meetings; • authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and • require the approval of the holders of at least 66 2/3% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.
Among other things, these provisions: • establish a classified board of directors such that not all members of the board of directors are elected at one time; • allow the authorized number of our directors to be changed only by resolution of our board of directors; • limit the manner in which stockholders can remove directors from the board of directors; • establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; 57 • limit who may call stockholder meetings; • authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and • require the approval of the holders of at least 66 2/3% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our Certificate of Incorporation or Bylaws.
Such attacks could include the deployment of harmful malware (including as a result of advanced persistent threat intrusions), ransomware attacks, denial-of-service attacks, credential stuffing and/or harvesting, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of sensitive data or other information technology assets, adware, attacks enhanced or facilitated by artificial intelligence, telecommunications failures, earthquakes, fires, floods and other means to affect service reliability and threaten the confidentiality, integrity and availability of our information systems and sensitive data.
Such attacks could include the deployment of harmful malware (including as a result of advanced persistent threat intrusions), ransomware attacks, denial-of-service attacks, credential stuffing and/or harvesting, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of sensitive data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods and other means to affect service reliability and threaten the confidentiality, integrity and availability of our information systems and sensitive data.
These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the 28 market price of our common stock.
These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
If we are unable to obtain adequate financing when needed, we will be required to implement additional cost reduction measures, such as further reducing operating expenses, or otherwise be required to delay, reduce the scope of or suspend one or more of our preclinical studies, clinical trials, research and development programs or commercialization efforts, or terminate our operations.
If we are unable to obtain adequate financing when needed, we will be required to implement cost reduction measures, such as reducing operating expenses, or otherwise be required to delay, reduce the scope of or suspend one or more of our preclinical studies, clinical trials, research and development programs or commercialization efforts, or terminate our operations.
Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
Any provision of our Certificate of Incorporation or Bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management.
Provisions in our Certificate of Incorporation and Bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management.
Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy, natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance.
Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy (including tariffs), natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance.
For example, during 2022 and 2023, the Federal Reserve raised interest rates multiple times in response to concerns about inflation. Higher interest rates, coupled with reduced government spending and volatility in financial 27 markets may increase economic uncertainty and affect consumer spending.
For example, during 2022 and 2023, the Federal Reserve raised interest rates multiple times in response to concerns about inflation. Higher interest rates, coupled with reduced government spending, tariffs, and volatility in financial markets may increase economic uncertainty and affect consumer spending.
With the new administration in the U.S., additional and higher tariffs and sanctions may be imposed on goods imported from other countries which could increase the cost of goods needed to commercialize our products and continue development of our product candidates.
With the current administration in the U.S., additional and higher tariffs and sanctions may be imposed on goods imported from other countries which could increase the cost of goods needed to commercialize our products and continue development of our product candidates.
The United States Patent Office recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013.
The United States Patent Office recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective in March 2013.
Some provisions of our charter documents and the DGCL may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would benefit our stockholders and may prevent attempts by our stockholders to replace or remove our current management.
Some provisions of our organizational documents and the DGCL may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would benefit our stockholders and may prevent attempts by our stockholders to replace or remove our current management.
We must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that each of our drug candidates are safe and effective for its intended indications before we are prepared to submit an NDA or BLA for regulatory approval.
We must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that each of our drug candidates are safe and effective for its intended indications before we are prepared to submit an NDA for regulatory approval.
If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
If we or our CROs fail to comply with cGCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data (including clinical trial data); and orders to destroy or not use personal data.
If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data (including clinical trial data); and orders to destroy or not use personal data.
Failure to 56 remedy material weaknesses in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
Failure to 55 remedy material weaknesses in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
If we are not successful in discovering, developing and commercializing additional drug candidates, our ability to expand our business and achieve our strategic objectives would be impaired. A key element of our current strategy is to discover, develop and potentially commercialize a portfolio of drug candidates to treat brain conditions with significant unmet need.
If we are not successful in discovering, developing and commercializing additional drug candidates, our ability to expand our business and achieve our strategic objectives would be impaired. A key element of our current strategy is to discover, develop and potentially commercialize a portfolio of drug candidates to treat certain brain disorders with significant unmet need.
Although we will rely on CROs to conduct GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities.
Although we rely on CROs to conduct cGCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities.
Our business strategy is based on acquiring or in-licensing compounds directed at certain epilepsies, seizure-related disorders, and rare neurological disorders. As a result, we intend to periodically explore a variety of possible additional strategic collaborations in an effort to gain access to additional drug candidates or resources.
Our business strategy is based on acquiring or in-licensing compounds directed at certain epilepsies, seizure-related disorders, and other brain neurological disorders. As a result, we intend to periodically explore a variety of possible additional strategic collaborations in an effort to gain access to additional drug candidates or resources.
The PPACA provides, and recent government cases against pharmaceutical and medical device manufacturers support, the view that federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may implicate the False Claims Act; • HIPAA, which created additional federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor (e.g., public or private); • HIPAA, as amended by HITECH, and their implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act, published in January 2013, which imposes certain requirements relating to the privacy, security and transmission of 39 individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, individuals or entities that perform certain services on behalf of a covered entity that involves the use or disclosure of individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information; • Physician Payments Sunshine Act, which is part of the PPACA, requires that certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, information related to: (i) payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals; and (ii) ownership and investment interests held by physicians and their immediate family members; • state and foreign law equivalents of each of the above federal laws, state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and/or information regarding drug pricing, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers, state laws and regulations that require drug manufacturers to file reports relating to drug pricing and marketing information, and state and local laws that require the registration of pharmaceutical sales representatives; and • state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The PPACA provides, and recent government cases against pharmaceutical and medical device manufacturers support, the view that federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may implicate the False Claims Act; • HIPAA, which created additional federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor (e.g., public or private); • HIPAA, as amended by HITECH, and their implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act, published in January 2013, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, individuals or entities that perform certain services on behalf of a covered entity that involves the use or disclosure of individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information; • Physician Payments Sunshine Act, which is part of the PPACA, requires that certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, information related to: (i) payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals; and (ii) ownership and investment interests held by physicians and their immediate family members; • state and foreign law equivalents of each of the above federal laws, state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and/or information regarding drug pricing, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers, state laws and regulations that require drug manufacturers to file reports relating to drug pricing and marketing information, and state and local laws that require the registration of pharmaceutical sales representatives; and • state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 38 Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws.
On December 16, 2011, the Leahy-Smith America Invents Act (“Leahy-Smith Act”) was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation.
In December 2011, the Leahy-Smith America Invents Act (“Leahy-Smith Act”) was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation.
If we seek approval of our current or future drug candidates outside of the United States, we expect that we will be subject to additional risks in commercialization including: • different regulatory requirements for approval of therapies in foreign countries; • reduced protection for intellectual property rights; • the potential requirement of additional clinical studies in international jurisdictions; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical tensions including tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, and any other war or the perception that hostilities may be imminent, terrorism, natural disasters or public health crises.
If we seek approval of our current or future drug candidates outside of the United States, we expect that we will be subject to additional risks in commercialization including: • different regulatory requirements for approval of therapies in foreign countries; • reduced protection for intellectual property rights; • the potential requirement of additional clinical studies in international jurisdictions; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical tensions and wars, or the perception that hostilities may be imminent, terrorism, natural disasters or public health crises.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other. The Patient Protection and Affordable Care Act, as amended by the PPACA, amended the intent requirement of the federal Anti-Kickback Statute.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other. The Patient Protection and Affordable Care Act, as amended (“PPACA”), amended the intent requirement of the federal Anti-Kickback Statute.
We focus our research and drug development on treatments for brain conditions with significant unmet need. This specifically includes medicines to treat symptoms of excess neural excitation such as seizures and psychoses that manifest in specific epilepsies, psychiatric, neurodegenerative and neurodevelopmental conditions. We are developing medicines for rare and broader conditions.
We focus our research and drug development on treatments for certain brain disorders with significant unmet need. This specifically includes medicines to treat symptoms of excess neuronal excitation such as seizures and psychoses that manifest in specific epilepsies, psychiatric, neurodegenerative and neurodevelopmental conditions. We are developing medicines for rare and broader conditions.
We expect to control only certain aspects of our CROs’ activities. Nevertheless, we will be responsible for ensuring that each of our preclinical studies or clinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.
We are able to control only certain aspects of our CROs’ activities. Nevertheless, we are responsible for ensuring that each of our preclinical studies or clinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.
We and our CROs will be required to comply with GLPs and GCPs, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Council for Harmonization guidelines for any of our drug candidates that are in preclinical and clinical development.
We and our CROs are required to comply with GLPs and cGCPs, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Council for Harmonization guidelines for any of our drug candidates that are in preclinical and clinical development.
This specifically includes medicines to treat symptoms of excess neural excitation such as seizures and psychoses that manifest in specific epilepsies, psychiatric, neurodegenerative and neurodevelopmental conditions. We are developing medicines for rare and broader conditions.
This specifically includes medicines to treat symptoms of excess neuronal excitation such as seizures and psychoses that manifest in specific epilepsies, psychiatric, neurodegenerative and neurodevelopmental conditions. We are developing medicines for both rare and broader conditions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur information security function helps identify, assess and manage risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods, 60 including automated tools, domain name system filtering, antivirus protection, vulnerability scanning and penetration testing.
Biggest changeOur information security function helps identify, assess and manage material risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods, including automated tools, domain name system filtering, antivirus protection, vulnerability scanning and penetration testing.
“Risk Factors,” to this Annual Report on Form 10-K titled “ If our information technology systems or data, or those of the third parties with whom we work, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, interruptions to our operations such as our clinical trials, claims that we breached our data protection obligations, harm to our reputation, and a loss of future customers or sales and other adverse consequences .” 61 Governance Our board of directors maintains oversight of our most significant risks and our processes to identify, manage and mitigate those risks.
“Risk Factors,” to this Annual Report on Form 10-K titled “ If our information technology systems or data, or those of the third parties with whom we work, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions, litigation, fines and penalties, interruptions to our operations such as our clinical trials, claims that we breached our data protection obligations, harm to our reputation, and a loss of future customers or sales and other adverse consequences .” Governance Our board of directors maintains oversight of our most significant risks and our processes to identify, manage and mitigate those risks.
The Audit Committee receives periodic updates from our Senior Vice President of Finance and Financial Planning regarding the status of our cybersecurity program and our posture to identify and mitigate risks to our information security.
The Audit Committee receives periodic updates from our Senior Vice President of Finance and Financial Planning regarding the status of our cybersecurity program and our posture to identify and mitigate risks to our information security. 59

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We currently lease the space for our principal executive offices, which are located at 441 Ninth Avenue, New York, New York, under a ten-year lease agreement which commenced in March 2022. We believe our facilities are adequate to meet current needs. Item 3. Legal Proceedings We are not currently subject to any material legal proceedings. Item 4.
Biggest changeItem 2. Properties We currently lease the space for our principal executive offices, which are located at 441 Ninth Avenue, New York, New York, under a ten-year lease agreement which commenced in March 2022. We believe our facilities are adequate to meet current needs. Item 3.
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Mine Safety Disclosures Not applicable. 62 PART II
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Legal Proceedings From time to time, we may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. We are not currently subject to any material legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 60 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock began trading on The Nasdaq Global Select Market on May 5, 2017, under the symbol “OVID.” Comparative Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act.
Biggest changeComparative Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act.
Dividend Policy We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings to fund the development and growth of our business. We do not expect to pay any cash dividends in the foreseeable future.
Dividend Policy We have never declared or paid any dividends on our common stock. We currently intend to retain future earnings to fund the development and growth of our business. We do not expect to pay any dividends in the foreseeable future.
Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on then-existing conditions, including our financial conditions, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. Recent Sales of Unregistered Securities None. Item 6. [Reserved] 63 Item 7.
Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on then-existing conditions, including our financial conditions, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. Recent Sales of Unregistered Securities None. Item 6. [Reserved]
The following graph shows a comparison from December 31, 2019 through December 31, 2024, of the cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index. The graph assumes an initial investment of $100 on December 31, 2019.
The following graph shows a comparison from December 31, 2020 through December 31, 2025, of the cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index. The graph assumes an initial investment of $100 on December 31, 2020.
The comparisons in the graph are not intended to forecast or be indicative of possible future performance of our common stock. Holders of Record As of March 7, 2025, we had approximately 14 holders of record of our common stock.
The comparisons in the graph are not intended to forecast or be indicative of possible future performance of our common stock. Holders of Record As of March 16, 2026, we had approximately 18 holders of record of our common stock.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock began trading on The Nasdaq Global Select Market on May 5, 2017, under the symbol “OVID.” In August 2025, we transferred our listing to the Nasdaq Capital Market.
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This discussion and analysis and other parts of this Annual Report on Form 10-K contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections.
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Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K.
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You should carefully read the “Risk Factors” section of this Annual Report on Form 10-K to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
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Please also see the section entitled “Special Note Regarding Forward-Looking Statements.” Overview 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.
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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.
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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 in humans, and a third will begin a clinical trial in the second quarter of 2026.
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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.
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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.
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Since our inception in April 2014, we have devoted substantially all of our efforts to organizing and planning our business, building our management and technical team, acquiring assets and raising capital. During the years ended December 31, 2024 and 2023, we generated $0.6 million and $0.4 million of royalty and licensing revenue, respectively.
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We have otherwise primarily funded our business through the sale of our capital stock and through the entry into the RLT Agreement with Takeda, which resulted in a one-time up-front payment of $196.0 million in 2021 and the entry into a Royalty Monetization Agreement (the “Ligand Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”), which resulted in a one-time up-front payment of $30.0 million in 2023.
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Through December 31, 2024, we have raised net proceeds of $275.4 million from the sale of our preferred and common stock. As of December 31, 2024, we had $53.1 million in cash, cash equivalents and marketable securities. We recorded net losses of $26.4 million and $52.3 million for the years ended December 31, 2024 and 2023, respectively.
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As of December 31, 2024, we had an accumulated deficit of $304.3 million. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years.
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Our net losses may fluctuate significantly from period to period, depending on the timing of our planned clinical trials and expenditures on our other research and development and commercial development activities.
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We expect our expenses will increase substantially over time as we: • continue the ongoing and planned preclinical and clinical development of our drug candidates; • build a portfolio of drug candidates through the development, acquisition or in-license of drugs, drug candidates or technologies; • initiate preclinical studies and clinical trials for any additional drug candidates that we may pursue in the future; • seek marketing approvals for our current and future drug candidates that successfully complete clinical trials; • establish a sales, marketing and distribution infrastructure to commercialize any drug candidate for which we may obtain marketing approval; • develop, maintain, expand and protect our intellectual property portfolio; • implement operational, financial and management systems; and 64 • attract, hire and retain additional administrative, clinical, regulatory, manufacturing, commercial and scientific personnel.
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Significant Risks and Uncertainties 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.
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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.
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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.
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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, as well as potential future conditions, which may be impacted by the implementation of tariffs by the United States and other countries, and employee availability and wage increases, which may result in additional stress on our working capital resources.
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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.
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In addition, we are subject to other challenges and risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with: identifying, acquiring or in-licensing products or product candidates; obtaining regulatory approval of product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing our intellectual property rights; and complying with applicable regulatory requirements.
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Financial Operations Overview Revenue We have generated revenue primarily under the RLT Agreement and the Ligand Agreement, as well as nominal amounts from other licensing and royalty agreements.
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We have not generated any revenue from commercial drug sales and we do not expect to generate any revenue from commercial drug sales unless or until we obtain regulatory approval and commercialize one or more of our current or future drug candidates, or if we become entitled to revenue from our licensing agreements.
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In the future, we may also seek to generate revenue from a combination of research and development payments, license fees and other upfront or milestone payments.
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Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our product discovery efforts and the development of our product candidates, which include, among other things: • employee-related expenses, including salaries, benefits and stock-based compensation expense; • fees paid to consultants for services directly related to our drug development and regulatory efforts; • expenses incurred under agreements with contract research organizations, as well as contract manufacturing organizations and consultants that conduct preclinical studies and clinical trials; • costs associated with preclinical activities and development activities; • costs associated with technology and intellectual property licenses; and • milestone payments and other costs and payments under licensing agreements, research agreements and collaboration agreements.
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Costs incurred in connection with research and development activities are expensed as incurred. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of 65 specific tasks using data such as patient enrollment, clinical site activations or other information provided to us by our vendors.
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Research and development activities are and will continue to be central to our business model. We expect our research and development expenses to increase for the foreseeable future as we advance our current and future drug candidates through preclinical studies and clinical trials.
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The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time-consuming. It is difficult to determine with certainty the duration and costs of any preclinical study or clinical trial that we may conduct.
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The duration, costs and timing of clinical trial programs and development of our current and future drug candidates will depend on a variety of factors that include, but are not limited to, the following: • number of clinical trials required for approval and any requirement for extension trials; • per patient trial costs; • number of patients who participate in the clinical trials; • number of sites included in the clinical trials; • countries in which the clinical trial is conducted; • length of time required to enroll eligible patients; • number of doses that patients receive; • drop-out or discontinuation rates of patients; • potential additional safety monitoring or other studies requested by regulatory agencies; • duration of patient follow-up; and • efficacy and safety profile of the drug candidates.
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In addition, the probability of success for any of our current or future drug candidates will depend on numerous factors, including competition, manufacturing capability and commercial viability.
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We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each drug candidate, as well as an assessment of each drug candidate’s commercial potential.
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General and Administrative Expenses General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits and stock-based compensation expense, related to our executive, finance, business development and support functions.
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Other general and administrative expenses include costs associated with operating as a public company, generation and maintenance of intellectual property, travel expenses, conferences, professional fees for auditing, tax and legal services and facility-related costs.
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Other Income (Expense), net Other income (expense), net, consists primarily of interest income, accretion of discount on short-term investments, and unrealized gains/losses on long-term equity investments, changes in the values of long-term investments and the royalty monetization liability under the Ligand Agreement, and loss related to a fraudulent funds transfer. 66 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes the results of our operations for the periods indicated: (in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Change $ Revenue: License and other revenue $ 566 $ 392 $ 175 Total revenue 566 392 175 Operating expenses: Research and development 36,767 28,588 8,179 General and administrative 25,684 31,085 (5,401) Total operating expenses 62,451 59,673 2,778 Loss from operations (61,885) (59,281) (2,604) Other income (expense), net 35,452 6,943 28,509 Loss before provision for income taxes (26,433) (52,339) 25,905 Provision for income taxes — — — Net loss $ (26,433) $ (52,339) $ 25,905 Revenue Revenue of $0.6 million and $0.4 million was recognized for the years ended December 31, 2024 and 2023, respectively, related to a royalty agreement.
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Research and Development Expenses (in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Change $ Preclinical and clinical development expenses $ 23,965 $ 14,605 $ 9,360 Payroll and payroll-related expenses 9,889 10,541 (652) Other expenses 2,913 3,442 (529) Total research and development $ 36,767 $ 28,588 $ 8,179 Research and development expenses were $36.8 million for the year ended December 31, 2024 compared to $28.6 million for the year ended December 31, 2023.
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The increase of $9.4 million in preclinical and development expenses was due to additional activities related to our ongoing development programs, primarily relating to OV350, OV888 (GV101) and OV329.
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The decrease in payroll and payroll-related expenses was primarily due to the impact of an organizational restructuring in 2024, which resulted in approximately $1.7 million in severance costs during the period ended December 31, 2024 compared to approximately $0.2 million for the same period in 2023.
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General and Administrative Expenses (in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Change $ Payroll and payroll-related expenses $ 13,835 $ 17,131 $ (3,296) Legal and professional fees 6,573 7,610 (1,037) General office expenses 5,275 6,344 (1,069) Total general and administrative $ 25,684 $ 31,085 $ (5,401) 67 General and administrative expenses were $25.7 million for the year ended December 31, 2024 compared to $31.1 million for the year ended December 31, 2023.
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The decrease of $5.4 million was primarily due to the impact of the organizational restructuring in 2024, which resulted in approximately $1.8 million in severance costs during the period compared to approximately $1.5 million for the same period in 2023.
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Additionally, resulting from the restructuring, non-severance payroll and related expenses were reduced by approximately $3.7 million between the years ended December 31, 2024 and 2023. Legal and professional fees and general office expenses were primarily reduced by cost-cutting efforts.
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Other Income (Expense), net Other income (expense), net was $35.5 million for the year ended December 31, 2024, comprised of a $30.0 million decrease in fair value of the royalty monetization liability resulting from Takeda’s reported negative soticlestat Phase 3 study results and announcement of program discontinuation, $3.9 million in interest and accretion income on investments in U.S. treasuries, $1.8 million loss on a fraudulent funds transfer and a net $3.3 million unrealized gain on long-term equity investments.
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For the year ended December 31, 2023, other income (expense), net of $6.9 million was comprised of $4.9 million in interest and accretion income on investments in U.S. treasuries and $2.0 million of unrealized loss on long-term equity investments.
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Liquidity and Capital Resources Overview As of December 31, 2024 and 2023, we had total cash, cash equivalents and marketable securities of $53.1 million and $105.8 million, respectively.
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We believe that our cash, cash equivalents and marketable securities as of December 31, 2024 are sufficient to fund our existing and planned operating expenses and capital expenditure requirements into the second half of 2026. Similar to other development-stage biotechnology companies, we have generated limited revenue.
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We have incurred losses and experienced negative operating cash flows in most years since our inception and anticipate that we will continue to incur losses for at least the next several years. We incurred net losses of $26.4 million and $52.3 million for the years ended December 31, 2024 and 2023, respectively.
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As of December 31, 2024, we had an accumulated deficit of $304.3 million and working capital of $45.4 million.
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At-the-Market Offering Program In November 2023, we filed a new shelf registration statement on Form S-3 (Registration No. 333-275307) that allows us to sell up to an aggregate of $250.0 million of our common stock, preferred stock, convertible debt securities and/or warrants (the “S-3 Registration Statement”), which includes a prospectus covering the issuance and sale of up to $75.0 million of common stock pursuant to our at-the-market (“ATM”) program.
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During the years ended December 31, 2024 and 2023, we did not sell any shares under our ATM program. As of December 31, 2024, we had up to $250.0 million available under our S-3 Registration Statement, including up to $75.0 million available pursuant to our ATM program.
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As of the date of this Form 10-K, our public float was less than $75.0 million.
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As a result, we are subject to the limitations of General Instruction I.B.6 to Form S-3 until such time as our public float exceeds $75 million, which means we only have the capacity to sell shares up to one-third of our public float under the S-3 Registration Statement, including the ATM program, in any twelve-month period.
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We will remain constrained by the limitations of General Instruction I.B.6 to Form S-3 until such time as our public float exceeds $75 million, at which time the number of securities we may sell under a Form S-3 registration statement will no longer be limited by limitations of General Instruction I.B.6 to Form S-3.
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Future Funding Requirements We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek marketing approval for, our product candidates and advance our other programs.
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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.
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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 drug candidates or whether, or when, we may achieve profitability.
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We have no products approved for commercial sale and have not generated any revenues from product sales to date. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through 68 a combination of equity offerings, debt financings and additional funding from license and collaboration arrangements.
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Except for any obligations of our collaborators to reimburse us for research and development expenses or to make milestone or royalty payments under our agreements with them, we will not have any committed external source of liquidity.
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To the extent that we raise additional capital through future equity offerings or debt financings, ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.
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Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. There can be no assurance that such financings will be obtained on terms acceptable to us, if at all.
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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.
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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.
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Federal Reserve has raised interest rates in response to concerns about inflation. Relatively high interest rates and fluctuations in inflation, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks.
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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 negatively affect our future ability to pursue our business strategy.
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If we raise additional funds through collaborations, strategic alliances or licensing agreements with third parties for one or more of our current or future drug candidates, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or to grant licenses on terms that may not be favorable to us.
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Our failure to raise capital as and when needed would have a material adverse effect on our financial condition and our ability to pursue our business strategy.
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We may be required to take additional actions beyond the cost preservation measures initiated to address our liquidity needs, including exploring other strategic options, continuing to further reduce operating expense or delaying, reducing the scope of, discontinuing or altering our research and development activities. See “ Item 1A. Risk Factors ” for additional risks associated with our capital requirements.
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Material Cash Requirements As of December 31, 2024, we had no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancelable, purchase order basis.
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We cannot estimate whether we will receive or the timing of any potential contingent payments upon the achievement by us of clinical, regulatory and commercial events, as applicable, or royalty payments that we may be required to make under license agreements we have entered into with various entities pursuant to which we have in-licensed certain intellectual property as contractual obligations or commitments, including agreements with AstraZeneca, Gensaic and Northwestern.
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Pursuant to these license agreements, we have agreed to make milestone payments up to an aggregate of $660.3 million upon the achievement of certain development, regulatory and sales milestones. We excluded these contingent payments from the consolidated financial statements given that the timing, probability, and amount, if any, of such payments cannot be reasonably estimated at this time.
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In September 2021, we entered into a ten year lease agreement for our corporate headquarters with a term commencing in March 2022 for approximately 19,000 square feet of office space at Hudson Commons in New York, New York. The lease provides for monthly rental payments over the lease term.
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The base rent under the lease is currently $2.3 million per year. Rent payments commenced in January 2023, and will continue for ten years following the rent commencement date.
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We issued a letter of credit in the amount of $1.9 million in association with the execution of the lease agreement, which is reflected as restricted cash on the consolidated balance sheets.
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Payment obligations under the lease agreement include approximately $2.3 million in the 12 months subsequent to December 31, 2024 and approximately $19.3 million over the remainder of the agreement.
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For additional information see Note 5 to our consolidated financial statements under the heading ‘Leases.’ 69 Cash Flows The following table summarizes our cash flows for the periods indicated: (in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Net cash (used in) provided by: Operating activities $ (55,956) $ (45,781) Investing activities 54,594 (2,581) Financing activities 622 30,535 Net decrease in cash, cash equivalents, and restricted cash $ (740) $ (17,827) Net Cash Used in Operating Activities Net cash used in operating activities was $56.0 million for the year ended December 31, 2024, which consisted of net loss of $26.4 million offset by $29.4 million, net, of various noncash charges, most significantly a $30.0 million in change in fair value of the royalty monetization liability with Ligand.
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Net cash used in operating activities was $45.8 million for the year ended December 31, 2023, which consisted of net loss of $52.3 million offset by a net of $4.2 million of various noncash charges, most significantly $7.3 million in stock-based compensation expense.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeToday, we are one of the few companies that has researched and developed three distinct MoAs to target seizures and we believe we are the only company that has a portfolio of direct activators of KCC2.
Biggest changeWe have developed a differentiated pipeline of drug candidates containing 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”).
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources ” for more information. 7 Ovid pipeline Our efforts have already brought drug candidates from POC into late-stage patient clinical trials.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
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We believe this pipeline of potential first-in-class or best-in-class mechanisms differentiates us and provides the foundation for a productive franchise of potential small molecule neurotherapeutics for epilepsies, psychoses and other mood disorders. The following table (Figure 1) sets forth our drug candidate programs and their development status, their respective MoAs, and anticipated near-term milestones.
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This discussion and analysis and other parts of this Annual Report on Form 10-K contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections.
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In the event we are unable to raise capital or enter into partnerships or co-development opportunities as and when needed, we will be required to delay, reduce the scope of or eliminate research and development programs. Figure 1. Ovid Therapeutics Pipeline NOTE: Ovid has a Phase 2-ready ROCK2 inhibitor, OV888 (GV101), in collaboration with Graviton Bioscience.
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Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in 61 this Annual Report on Form 10-K.
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This program was cleared by regulators toinitiate Phase 2 but is currently paused while Ovid monitors the outcome of regulatory interactions by competitors. OV329 - A next-generation GABA-AT inhibitor OV329 is a clinical-stage, next-generation GABA-AT inhibitor that we are developing for the treatment of adult and pediatric drug-resistant epilepsies.
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You should carefully read the “Risk Factors” section of this Annual Report on Form 10-K to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
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OV329 represents a potential best-in-class GABA-AT inhibitor and was designed to supplant vigabatrin (“VGB”), which is an approved therapeutic globally for the treatment of infantile spasms. VGB was a first-generation medicine that demonstrated substantial seizure reduction, however, its clinical and commercial use was limited by lack of a therapeutic window.
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Please also see the section entitled “Special Note Regarding Forward-Looking Statements.” Overview We are a biopharmaceutical company dedicated to developing small molecule medicines for brain disorders 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.
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Specifically, VGB was proven to generate deleterious and irreversible ocular effects in some patients, including retinal degradation and irreversible vision loss that led to significant post-market restrictions and monitoring. We believe OV329 to be an improved GABA-AT inhibitor with a different chemical structure, potency, binding, PK and PD profile as compared to VGB.
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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.
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OV329 has been shown to deliver increased potency and efficacy in the target binding site. In preclinical research it was demonstrated to be 100-fold more potent than VGB.
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One of our programs are in clinical trials in humans, and a second is expected to begin a clinical trial in the first half of 2026.
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We are actively studying an oral pill of OV329 in a Phase 1 trial that has multiple biomarkers to measure clinical effect and target engagement, in addition to evaluating safety, tolerability and PK. We believe that OV329 has the potential to be a therapeutic option for adult and pediatric drug-resistant epilepsies, including several DEEs.
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We are initially pursuing therapeutic drug candidates for the potential treatment of drug-resistant focal onset seizures (“FOS”), developmental and epileptic encephalopathies (“DEEs”), including tuberous sclerosis complex (“TSC”) seizures and infantile spasms (“IS”), psychosis associated with Parkinson’s disease and Lewy body dementia (“LBD”), and schizophrenia.
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A benefit of our OV329 program is that it acts upon a validated drug target for seizures. Specifically, it works by substantially reducing the activity of GABA-AT, a key enzyme responsible for the degradation of the brain’s major inhibitory neurotransmitter, GABA. OV329 leads to increased concentrations of GABA by inhibiting its metabolism.
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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 disorders 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.
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Given that epilepsy is characterized by excessive neuronal excitation, the increased levels of GABA may suppress this excitatory signaling and thus reduce seizures.
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Since our inception in April 2014, we have devoted substantially all of our efforts to organizing and planning our business, building our management and technical team, acquiring assets and raising capital. During the years ended December 31, 2025 and 2024, we generated $7.3 million and $0.6 million of royalty and licensing revenue, respectively.
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OV329 profile Based upon preclinical data supporting OV329, we believe it has the potential to provide (in comparison to VGB) greater seizure reduction efficacy and improved tolerability and safety profiles without sedation, and lower dosing in comparison to existing therapeutics. 8 To support OV329’s anti-convulsant profile, nine animal seizure models have demonstrated its seizure reducing effects (see Figure 2 below).
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We have otherwise primarily funded our business through the sale of our capital stock and through the entry into the royalty, license and termination agreement (“RLT Agreement”) with Takeda Company Limited (“Takeda”), which resulted in a one-time up-front payment of $196.0 million in 2021 and the entry into a Royalty Monetization Agreement (the “Ligand Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”), which resulted in a one-time up-front payment of $30.0 million in 2023.
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These findings from both chronic and acute seizure models provide additional confidence about the therapeutic potential of OV329 in humans. The PD profile of OV329 is differentiated from VGB. Preclinical research has shown that OV329 induces phasic (synaptic) and tonic (extra-synaptic) inhibition of GABA-AT.
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Through December 31, 2025, we have raised net proceeds of $350.5 million from the sale of our capital stock. As of December 31, 2025, we had $90.4 million in cash, cash equivalents and marketable securities. We recorded net losses of $17.4 million and $26.4 million for the years ended December 31, 2025 and 2024, respectively.
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This produced more GABA in the synapse and environmental milieu, potentially contributing to more durable inhibitory effects. Figure 2. Nine preclinical animal models reaffirm OV329 seizure reduction activity, including resistant seizure models OV329 safety profile To date, OV329 has exhibited acceptable tolerability in humans in our Phase 1 study.
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As of December 31, 2025, we had an accumulated deficit of $321.7 million. We expect to incur significant expenses and operating losses for at least the next several years. Our net losses may fluctuate significantly from period to period, depending on the timing of our clinical trials and expenditures on our other research and development and commercial development activities.
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There have been no drug-associated serious adverse events reported and minor and transient adverse events, such as headache. Additionally, to characterize OV329’s potential safety profile relative to VGB, our preclinical efforts sought to extensively study safety and tolerability, including any potential ocular changes. We are cleared to study OV329 in humans with daily dosing for 28 days.
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We expect our expenses will increase substantially over time as we: • continue the ongoing and planned preclinical and clinical development of our drug candidates; • build a portfolio of drug candidates through the development, acquisition or in-license of drugs, drug candidates or technologies; • initiate preclinical studies and clinical trials for any additional drug candidates that we may pursue in the future; • seek marketing approvals for our current and future drug candidates that successfully complete clinical trials; • establish a sales, marketing and distribution infrastructure to commercialize any drug candidate for which we may obtain marketing approval; • develop, maintain, expand and protect our intellectual property portfolio; • implement operational, financial and management systems; and • attract, hire and retain additional administrative, clinical, regulatory, manufacturing, commercial and scientific personnel. 62 2025 Private Placement In October 2025, we entered into a Securities Purchase Agreement with the purchasers named therein (the “Investors”), pursuant to which we issued and sold an aggregate of (i) 57,722 shares of our Series B convertible preferred stock, par value $0.001 per share (the “Series B Preferred Stock”), (ii) Series A warrants (the “Series A Warrants”) to purchase up to 38,481,325 shares of our common stock and/or pre-funded warrants to purchase common stock (the “Pre-Funded Warrants”) and (iii) Series B warrants to purchase up to 28,861,000 shares of common stock and/or Pre-Funded Warrants (the “Series B Warrants” and, together with the Series A Warrants, the “Warrants”) to the Investors in a private placement (the “2025 Private Placement”).
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Toxicology that enables our Phase 2 program is expected to be completed by third quarter 2025.
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Each share of Series B Preferred Stock was sold together with a Series A Warrant to purchase up to 666.66 shares of common stock and/or Pre-Funded Warrants (rounded down to next whole share based on each investor’s aggregate purchase) and a Series B Warrant to purchase 500 shares of common stock and/or Pre-Funded Warrants (together, a “Security”).
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We have demonstrated that the tissue clearance of OV329 is rapid, which when coupled with its potency and irreversible binding, leads us to believe that the accumulation in the back of the eye does not occur as it does with VGB, which has a longer half-life.
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The Securities were sold at a purchase price of $1,400.00 per Security to the Investors, which included the purchase of 71 shares of Series B Preferred Stock, 47,333 Series A Warrants, and 35,500 Series B Warrants by our Executive Chairman.
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In 2024, we presented results at the American Epilepsy Society meeting of a head-to-head animal study evaluating whether OV329 could be found to accumulate in mouse retinas and brains, as has been previously shown to occur with VGB. The preferential accumulation of VGB in the eye is thought to be a contributing factor in VGB’s ocular toxicity.
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We received initial net proceeds of $75.1 million from the 2025 Private Placement, after deducting placement agent fees and offering expenses. We may further receive up to $94.0 million in additional gross proceeds, assuming exercise in full of the Warrants.
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The findings (summarized in Figure 3 below), found that OV329 cleared and remained undetectable in the retinas, eyes, and brains of mice after 48 hours of continuous exposure via a sub-cutaneous osmotic pump, suggesting a lack of accumulation. In contrast, ocular accumulation of VGB was confirmed within this period.
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In December 2025, following the approval by our stockholders at a special meeting held on December 11, 2025 of specified proposals, all of the shares of the Series B Preferred Stock automatically converted into an aggregate of 57,722,000 shares of our common stock. The Warrants each have an exercise price of $1.40 per share (the “Exercise Price”).
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These results replicate previously published findings that indicate VGB preferentially and rapidly accumulates within mouse tissue and plasma, including retina, visual cortex, and brain at sub-therapeutic doses (70 mg/kg). In contrast, a therapeutic dose of OV329 in animals (5 mg/kg) did not show signs of ocular accumulation in the same study design. 9 Figure 3.
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The Series A Warrants are exercisable and expire on the earlier of (i) October 6, 2030 or (ii) the 30th calendar day following the date on which we publicly announce the clearance of the first of any investigational new drug application, clinical trial application or other foreign equivalent with respect to the clinical development of our OV4071 product candidate.
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OV329 clears brain and eye tissue rapidly and does not accumulate like VGB 1 Tsai, J., et al. (2024). Evaluation of the Potential Accumulation of OV329 in the Brain, Retina, and Eye Following Continuous Infusion .
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On March 18, 2026, we publicly announced that we received Human Research Ethics Committee (HREC) approval of the Phase 1 clinical trial protocol for OV4071 and acknowledgement of our Clinical Trial Notification (CTN) from the Therapeutic Goods Administration (TGA).
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Poster presented at the 2024 Epilepsy Pipeline Conference These results complement previously presented studies which showed that therapeutic doses of OV329 (3 mg/kg) did not result in retinal tissue pathology at 45 days in Sprague-Dawley rats, an animal model that investigates structural and functional ocular toxicity (see Figure 4).
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Accordingly, pursuant to the terms of the Series A Warrants, the Series A Warrants will expire on April 17, 2026, if not exercised in full. If all Series A Warrants are exercised in full, we would anticipate receiving an additional $53.9 million in gross proceeds, prior to deducting placement agent fees.
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In contrast, VGB did show retinal cell degradation at the therapeutic dose in animals of 300 mg/kg at 45 days. We applied a clinically translatable rodent model of albino Sprague-Dawley rats to determine if any ocular changes could be observed associated with the predicted therapeutic doses of OV329 and VGB, as compared to placebo.
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In the event that beneficial ownership limitations prevent the exercise by an Investor of all or a portion of the Series A Warrants held thereby, such Investor may purchase shares of common stock up to the specified limit and, for the remainder, purchase Pre-Funded Warrants in lieu of shares of common stock.
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This rodent model is an accepted proxy by the FDA for the ocular effects seen in humans treated with VGB. Figure 4 (below) demonstrates the results of our research.
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The Series B Warrants are exercisable and expire on October 6, 2030. In the event that the closing price of our common stock equals or exceeds 300% of the Exercise Price (subject to customary adjustments) for 20 of any 30 consecutive trading days, the Company may elect to require exercise of the Series B Warrants for cash.
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After 45 days of dosing with the therapeutic dose of VGB and an expected therapeutic dose of OV329 (3 mg/kg), the model showed no ocular effect in animals taking OV329, whereas disruption in retinal cells was seen in animals taking the therapeutic dose of VGB (300 mg/kg).
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In the event that beneficial ownership limitations prevent the exercise by an Investor of all or a portion of the Series B Warrants held thereby upon any such mandatory exercise demand, such Investor will purchase shares of common stock up to the specified limit, and for the remainder, purchase Pre-Funded Warrants in lieu of shares of common stock.
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In this short-term model, OV329’s ocular profile appears similar to placebo, and no disruption to the retina was seen at the anticipated therapeutic dose. These models must be confirmed in human studies, though they lead us to believe that OV329 may offer significant seizure reduction benefit with a therapeutic window not provided by VGB. 10 Figure 4.
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Recent Developments 2026 Private Placement On March 17, 2026, we entered into a Securities Purchase Agreement with the purchasers named therein (the “Investors”), pursuant to which we agreed to issue and sell an aggregate of 19,154,321 shares of our common stock at a purchase price of $2.01 per share and, in lieu of common stock, pre-funded warrants to purchase up to 10,701,710 shares of common stock, at a purchase price $2.009 for each pre-funded warrant, to the Investors in a private placement (the “2026 Private Placement”).
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No ocular changes seen in rodents treated with expected therapeutic dose of OV329 (3 mg/kg) Human studies and biomarker strategy Our Phase 1 trial of OV329 is currently ongoing with CMAX Clinical Research in Adelaide, Australia, with topline data expected in the third quarter of 2025.
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The pre-funded warrants will have an exercise price of $0.001 per share and will be immediately exercisable.
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The trial is being conducted in two parts, including: a single-ascending dose and a multiple-ascending dose portion. Endpoints will evaluate the PK profile, safety, tolerability and target engagement associated with escalating doses of OV329 in healthy volunteers.
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We intend to use the net proceeds from the 2026 Private Placement, together with our existing cash, cash equivalents and marketable securities, to provide financing to support the expansion of the development of OV329 into additional indications, including TSC and IS, as well as for general research and development expenses. 63 We will receive gross proceeds from the 2026 Private Placement of $60.0 million, before placement agent fees and offering expenses.
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Two surrogate biomarkers are being applied in the study, including: (1) transcranial magnetic stimulation (“TMS”), which is being measured as a corollary for clinical biological effect and (2) magnetic resonance spectrometry (“MRS”), which will be used to measure target engagement.
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The closing of the 2026 Private Placement is expected to occur on March 19, 2026, subject to customary closing conditions.
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Initial biomarker data from the most recently completed multiple-ascending dose cohort suggests encouraging directional signs of target engagement and clinical effects as measured by the above stated biomarkers. These findings indicate signs of increased GABAergic activity consistent with the intended mechanism of action by inhibiting GABA-aminotransferase.
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Significant Risks and Uncertainties 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 may have a material adverse effect on our business, financial condition, results of operations and growth prospects.
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Previous studies have reported that MRS measurement of GABA concentration levels increase following treatment with GABA-AT inhibitors, which has been shown to correlate with seizure reduction efficacy in existing GABA-AT inhibitor programs. These metrics coupled with safety, data and pharmacokinetic data may inform mid- to late-stage development of the program.
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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.
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Upon results from the Phase 1 program, we anticipate OV329 could be further studied for the potential treatment of drug-resistant epilepsies, including adult epilepsies and DEEs. OV350 and KCC2 direct activator portfolio In late 2021, we in-licensed a portfolio of more than 100 molecules from AstraZeneca AB (“AstraZeneca”), which are direct activators of the KCC2.
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Relatively high interest rates also present a 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.
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Since that time, we have extensively characterized the library for bioavailability, formulation amenability and therapeutic potential. As a result, we now have four unique programs that we intend to successively progress into human clinical studies. These include OV350, OV4071 and OV4041 and another undisclosed program.
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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 future on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, global geopolitical tensions, worsening global macroeconomic conditions, and employee availability and wage increases, which may result in additional stress on our working capital resources.
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Based upon our phenotype screens, disease model studies, and published evidence, we believe this portfolio offers broad therapeutic potential in a range of potential brain conditions and symptoms including psychosis, other behavior and mood disorders, and seizures. This may include neurodegenerative and neurodevelopmental diseases that exhibit the above mentioned symptoms.
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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 tension, sanctions and export controls which also increase volatility in the global economy.
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Given the broad therapeutic relevance of KCC2 in many brain disorders, it is our desire to unlock the full value of KCC2 for shareholders and patients.
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In addition, we are subject to other challenges and risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with: identifying, acquiring or in-licensing products or product candidates; obtaining regulatory approval of product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing our intellectual property rights; and complying with applicable regulatory requirements.
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We will explore doing so through our own development efforts and via potential development partners. 11 KCC2: A fundamental target in the CNS KCC2 is a fundamental biological target expressed exclusively in the CNS and is central to maintaining synaptic inhibition.
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Financial Operations Overview Revenue We have generated revenue under various licensing and collaboration agreements. We have not generated any revenue from commercial drug sales, and we do not expect to generate any further revenue unless or until we obtain regulatory approval and commercialize one or more of our current or future drug candidates.
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Hundreds of publications link KCC2 dysregulation directly or indirectly to various medical conditions and symptoms associated with excessive neural excitation. KCC2 is an ion co-transporter that regulates chloride extrusion in neurons. A functioning chloride gradient is essential to GABA being inhibitory in neural synapses.
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In the future, we may also seek to generate revenue from a combination of research and development payments, license fees and other upfront or milestone payments.
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By directly activating KCC2, our development programs seek to restore GABAergic inhibition and bring hyper-excited neurons into homeostasis. We believe that our KCC2 portfolio represents the only small molecule library within the broad biopharmaceutical industry that directly activates this unique ion co-transporter. Other companies have tried to activate KCC2.
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Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our product discovery efforts and the development of our product candidates, which include, among other things: • employee-related expenses, including salaries, benefits and stock-based compensation expense; • fees paid to consultants for services directly related to our drug development and regulatory efforts; • expenses incurred under agreements with contract research organizations, as well as contract manufacturing organizations and consultants that conduct preclinical studies and clinical trials; • costs associated with preclinical activities and development activities; • costs associated with technology and intellectual property licenses; • milestone payments and other costs and payments under licensing agreements, research agreements and collaboration agreements; and • depreciation expense for assets used in research and development activities.
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To our knowledge none, apart from us, have been successful, though some companies may potentiate the co-transporter, which will likely have different clinical effects. KCC2 direct activator library Our KCC2 direct activator portfolio includes four programs in active characterization and development, which we believe are suitable for pharmaceutical development.
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Costs incurred in connection with research and development activities are expensed as incurred. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of 64 specific tasks using data such as patient enrollment, clinical site activations or other information provided to us by our vendors.
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We have characterized and translated multiple candidates from the KCC2 portfolio for development in epilepsy as well as other possible neurological conditions associated with psychiatric, neurodegeneration and neurodevelopmental disorders. Phenotypic screens and confirmatory animal disease models suggest that our programs, including: OV350, OV4071 and OV4041, have potential therapeutic properties associated with anti-psychosis, anxiolytic and anticonvulsant response.
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Research and development activities are and will continue to be central to our business model. We expect our research and development expenses to increase for the foreseeable future as we advance our current and future drug candidates through preclinical studies and clinical trials.
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We have also determined that the unique molecules in the library are amenable to a range of formulations, including intravenous, oral and intramuscular injections. For the next three to four years, we anticipate filing regulatory submissions for human trials annually for successive programs emerging from our KCC2 portfolio.

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