Here's Why Ovid Therapeutics Stock Popped Higher Today
Key Points
OV329 may be safer and more potent than existing treatments.
A $60M private placement will fund further development.
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Ovid Therapeutics (NASDAQ: OVID) stock rose by more than 18% as of 12 a.m. today. The biopharmaceutical company is devoted to developing medicines for people with epilepsy and other brain conditions, and today's rise follows some positive newsflow on its most exciting pipeline program, OV329.
A next-generation treatment
The company defines OV329 as a "next-generation GABA-aminotransferase (GABA-AT) inhibitor being developed as a potential medicine for rare and treatment-resistant forms of epilepsy and seizures." Inhibiting the enzyme GABA aminotransferase (GABA-AT) activity increases γ-aminobutyric acid (GABA) levels, thereby reducing hyperexcitability, brain activity, and seizures.
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The key part of that statement that healthcare investors should take away from the passage above is "next-generation," because management believes OV329 is not only more potent than the first-generation GABA-AT inhibitor Vigabatrin (Sabril) but also has a better safety and tolerability profile. The latter is a big issue because Vigabatrin has the unfortunate side effect of potentially causing permanent vision loss.
The latest results
The big news came today with the release of data from a Phase 1 study of OV329 using a 7 mg dose (it had previously been tested at 3mg and 5mg), which reported "no treatment-related adverse events in the 7 mg cohort." In addition, after ophthalmic assessments, "no evidence of ophthalmic or retinal changes associated with OV329."
Where next for Ovid Therapeutics
The safety and tolerability data are exciting, and management announced a $60 million private placement , from which it intends to support developing OV329 in other indications, namely tuberous sclerosis complex seizures and infantile spasms, on top of a Phase 2 trial for focal onset seizures in drug-resistant patients.
These are exciting steps forward for the company, but, as ever with pharmaceutical companies and trials, there is a significant element of risk involved.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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