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OVID Slumps 76% on Epilepsy Drug Failing Two Pivotal Studies
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Shares of Ovid Therapeutics (OVID - Free Report) plunged 76% on Monday after it announced that treatment with soticlestat, its Takeda (TAK - Free Report) -partnered investigational epilepsy drug, failed to meet the primary endpoint of two pivotal late-stage studies.
Ovid’s partner Takeda evaluated soticlestat for treating two rare and severe forms of epilepsy, namely Dravet syndrome (DS) and Lennox-Gastaut syndrome (LGS), in the late-stage SKYLINE and SKYWAY studies, respectively.
While the SKYLINE study narrowly missed out on its primary endpoint of reducing convulsive seizure frequency in DS patients, the SKYWAY study did not meet its primary endpoint of reducing major motor drop seizures in LGS patients.
Some pre-specified subgroups of patients in both studies showed significant treatment effects on the primary and secondary efficacy endpoints, which include caregiver global impression of improvement, clinician global impression of improvement and seizure intensity and duration scales over the 16-week treatment period. The drug was also well-tolerated in study participants enrolled in both studies.
Based on these results, Takeda plans to meet with the FDA to discuss the above results and determine its next steps for the drug.
Though OVID sold its rights in soticlestat to Takeda in 2021, it still retains financial interests in the product. While Ovid received an upfront payment of $196 million upon the closing of this deal, it was also eligible to receive milestone payments of up to $660 million and tiered royalties on potential net product sales up to 20%. These payments would have likely benefited Ovid, which currently has no marketed products of its own. The stock plummeted likely due to the potential loss of these milestone payments.
Year to date, Ovid’s shares have plummeted 75.5% compared with the industry’s 6.4% fall.
Image Source: Zacks Investment Research
Despite the setback, Ovid intends to move forward with its other clinical programs. Using the upfront payment received from Takeda, management built a differentiated pipeline with novel programs, which includes two programs in clinical studies and a third one in preclinical development. Management intends to prioritize these programs and expects several upcoming clinical milestones. It expects to have enough cash to fund operations into the first half of 2026.
OVID is currently evaluating OV888, its investigational ROCK2 inhibitor, in an early-stage study for cerebral cavernous malformations (CCM). Safety data from this study is expected by this month’s end. Management also intends to start a phase II proof-of-concept study in people living with CCMs later this year, with an interim update expected in first-half 2026.
OVID’s second pipeline drug is OV329, an investigational GABA-aminotransferase inhibitor, which is being developed in an early-stage clinical study for refractory seizures. A data readout from this study is expected before the year’s end.
Management is planning to submit an investigational new drug (IND) application for OV350 before the year’s end. It intends to start an early-stage study evaluating this drug in a psychiatric indication in the next year.
In the past 60 days, estimates for Arcutis Biotherapeutics’ 2024 loss per share have narrowed from $2.49 to $1.60. During the same period, the loss estimates per share for 2025 have narrowed from $1.77 to $1.14. Year to date, shares of Arcutis have surged 146.4%.
Earnings of Arcutis Biotherapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. Arcutis delivered a four-quarter average earnings surprise of 14.93%.
In the past 60 days, estimates for Heron Therapeutics’ 2024 loss per sharehave narrowed from 22 cents to 10 cents. During the same period, estimates for 2025 have improved from a loss of 9 cents to earnings of 1 cent. Year to date, HRTX’s shares have appreciated 115.3%.
Earnings of Heron Therapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. HRTX delivered a four-quarter average earnings surprise of 30.33%.
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OVID Slumps 76% on Epilepsy Drug Failing Two Pivotal Studies
Shares of Ovid Therapeutics (OVID - Free Report) plunged 76% on Monday after it announced that treatment with soticlestat, its Takeda (TAK - Free Report) -partnered investigational epilepsy drug, failed to meet the primary endpoint of two pivotal late-stage studies.
Ovid’s partner Takeda evaluated soticlestat for treating two rare and severe forms of epilepsy, namely Dravet syndrome (DS) and Lennox-Gastaut syndrome (LGS), in the late-stage SKYLINE and SKYWAY studies, respectively.
While the SKYLINE study narrowly missed out on its primary endpoint of reducing convulsive seizure frequency in DS patients, the SKYWAY study did not meet its primary endpoint of reducing major motor drop seizures in LGS patients.
Some pre-specified subgroups of patients in both studies showed significant treatment effects on the primary and secondary efficacy endpoints, which include caregiver global impression of improvement, clinician global impression of improvement and seizure intensity and duration scales over the 16-week treatment period. The drug was also well-tolerated in study participants enrolled in both studies.
Based on these results, Takeda plans to meet with the FDA to discuss the above results and determine its next steps for the drug.
Though OVID sold its rights in soticlestat to Takeda in 2021, it still retains financial interests in the product. While Ovid received an upfront payment of $196 million upon the closing of this deal, it was also eligible to receive milestone payments of up to $660 million and tiered royalties on potential net product sales up to 20%. These payments would have likely benefited Ovid, which currently has no marketed products of its own. The stock plummeted likely due to the potential loss of these milestone payments.
Year to date, Ovid’s shares have plummeted 75.5% compared with the industry’s 6.4% fall.
Image Source: Zacks Investment Research
Despite the setback, Ovid intends to move forward with its other clinical programs. Using the upfront payment received from Takeda, management built a differentiated pipeline with novel programs, which includes two programs in clinical studies and a third one in preclinical development. Management intends to prioritize these programs and expects several upcoming clinical milestones. It expects to have enough cash to fund operations into the first half of 2026.
OVID is currently evaluating OV888, its investigational ROCK2 inhibitor, in an early-stage study for cerebral cavernous malformations (CCM). Safety data from this study is expected by this month’s end. Management also intends to start a phase II proof-of-concept study in people living with CCMs later this year, with an interim update expected in first-half 2026.
OVID’s second pipeline drug is OV329, an investigational GABA-aminotransferase inhibitor, which is being developed in an early-stage clinical study for refractory seizures. A data readout from this study is expected before the year’s end.
Management is planning to submit an investigational new drug (IND) application for OV350 before the year’s end. It intends to start an early-stage study evaluating this drug in a psychiatric indication in the next year.
Ovid Therapeutics Price
Ovid Therapeutics price | Ovid Therapeutics Quote
Zacks Rank & Key Picks
Ovid currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the overall healthcare sector include Arcutis Biotherapeutics (ARQT - Free Report) and Heron Therapeutics (HRTX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for Arcutis Biotherapeutics’ 2024 loss per share have narrowed from $2.49 to $1.60. During the same period, the loss estimates per share for 2025 have narrowed from $1.77 to $1.14. Year to date, shares of Arcutis have surged 146.4%.
Earnings of Arcutis Biotherapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. Arcutis delivered a four-quarter average earnings surprise of 14.93%.
In the past 60 days, estimates for Heron Therapeutics’ 2024 loss per sharehave narrowed from 22 cents to 10 cents. During the same period, estimates for 2025 have improved from a loss of 9 cents to earnings of 1 cent. Year to date, HRTX’s shares have appreciated 115.3%.
Earnings of Heron Therapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. HRTX delivered a four-quarter average earnings surprise of 30.33%.