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H.C. Wainwright maintained its Buy rating and $3.00 price target for Ovid Therapeutics (NASDAQ:OVID) Inc. (NASDAQ: OVID).
The firm's position comes after Ovid Therapeutics showcased findings from a head-to-head animal study at the recent Epilepsy Pipeline Conference. The study investigated the potential accumulation of OV329, a GABA-aminotransferase (GABA-AT) inhibitor, in mouse retinas and brains, compared to vigabatrin, the only FDA-approved GABA-AT inhibitor.
The research revealed that OV329 did not accumulate in the retinas, eyes, or brains of mice after 48 hours of exposure, which suggests a favorable safety profile. In contrast, vigabatrin was found to accumulate in these tissues within the same timeframe. The complete results from this study are scheduled to be presented at the American Epilepsy Society conference in December 2024.
The findings align with previous studies demonstrating that vigabatrin rapidly accumulates in mouse tissue and plasma, including the retina, visual cortex, and brain, even at subtherapeutic doses. On the other hand, OV329 did not show signs of ocular accumulation when administered at a therapeutic dose in the animal study.
Further supporting the safety profile of OV329, prior studies indicated that therapeutic doses of the drug did not cause retinal tissue pathology in Sprague Dawley rats over 45 days. This is in stark contrast to vigabatrin, which resulted in retinal cell degradation at therapeutic doses in animals after the same duration.
In other recent news, Ovid Therapeutics has made significant strides in the development of its investigational drug, OV329. Preclinical findings suggest that OV329, designed to treat disorders related to GABA-AT enzyme deficiency, does not accumulate in the eye, potentially reducing the risk of ocular toxicity. The drug is also rapidly cleared from the brain, a positive sign for its safety profile. In light of these findings, B.Riley maintained a Buy rating on Ovid Therapeutics.
The company also announced plans to release more preclinical data from an ongoing head-to-head animal study in December 2024, with Phase I trial results expected the following year. On the executive front, Margaret "Meg" Alexander has been promoted to President and Chief Operating Officer, while Amanda Banks, M.D., has been appointed as the new Chief Development Officer.
Additionally, BTIG and TD Cowen maintained their Buy ratings on Ovid Therapeutics, citing the potential of the upcoming Phase 2 trial for OV888 and the preclinical promise shown by OV329. However, Oppenheimer has downgraded the stock from Outperform to Perform.
InvestingPro Insights
Recent InvestingPro data provides additional context to Ovid Therapeutics' financial situation and market performance. Despite the promising research results highlighted in the article, the company faces some financial challenges. InvestingPro Tips reveal that Ovid is quickly burning through cash and is not profitable over the last twelve months. This aligns with the company's focus on research and development, which often requires significant investment before generating revenue.
However, it's not all negative. Ovid holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. This financial cushion could be crucial for continuing its research efforts, including the development of OV329.
The market's reaction to Ovid's potential has been mixed. While the stock has seen a strong return over the last three months (53.41% according to InvestingPro data), it has fallen significantly over the past year (-69.27%). This volatility reflects both the promise of Ovid's research and the inherent risks in pharmaceutical development.
For investors seeking a deeper understanding of Ovid Therapeutics, InvestingPro offers 10 additional tips, providing a more comprehensive view of the company's financial health and market position.
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