Ovid Therapeutics has sold off part of the royalty rights to its Takeda-partnered seizure med in order to fund its operations into 2026.
The biotech has sold 13% of its own share of the potential royalty and remaining milestone payments for soticlestat to Ligand Pharmaceuticals for $30 million. Ovid said the “non-dilutive capital infusion” would extend its cash runway beyond the previous endpoint of 2025 while still leaving it with the majority of its interest in the cholesterol 24-hydroxylase inhibitor.
“Ligand conducted an extensive review of the comprehensive scientific and development program supporting soticlestat, and together, we structured a creative and customized transaction that enables both parties to benefit in soticlestat’s expected future success while simultaneously enabling Ovid to propel our current pipeline of potential first-in-class or best-in-class neurological and anti-seizure medicines,” Ovid Chief Business and Financial Officer Jeffrey Rona said in the Oct. 18 release.
The money will certainly be of use at Ovid. The New York-based biotech ended June with $96.5 million in cash and equivalents, which it had expected to last into 2025. In that period, the company has a busy clinical schedule of “five clinical and regulatory milestones” expected.
The $30 million infusion of funds means Ovid can not only keep the lights on until 2026 but will “enable the expansion of its clinical programs,” it explained in the release.
Ligand CEO Todd Davis said soticlestat would join the company’s “growing portfolio of royalty assets.”
“This transaction exemplifies our strategy of investing in high-quality assets and premier teams in therapeutic areas with high unmet need,” Davis added. “This strategy will offer investors exposure to a diversified set of curated asset cash flows and diligence conducted by a world class team.”
After developing soticlestat itself, Ovid licensed the rights to Takeda in 2021 in return for $196 million upfront along with the potential for up to $660 million in milestones and a 20% slice of the global royalties should the drug reach the market.
It won’t be much longer to find out whether the therapy makes it that far. Takeda is assessing soticlestat in phase 3 trials for both Lennox-Gastaut syndrome and Dravet syndrome, with the aim of submitting the therapy for regulatory approvals next year.
William Blair analysts said recently that soticlestat has an opportunity to reach the $1 billion sales mark.
“Assuming a similar clinical profile to that observed in phase 2, we believe soticlestat has the potential to be a blockbuster product, with significant economic benefits to Ovid, and potential for expansion into additional indications,” analyst Tim Lugo wrote in an Oct. 3 note.