Ovid Therapeutics Inc. (NASDAQ: OVID) stock climbed to an 8-month high of $3.05 on Tuesday after positive initial data from rare epilepsies trial. The shares, which have fallen over 40% in the past year, are recovering from the slump during the end of 2018. The stock has risen over 77% in the past six months and over 34% in the year so far. Market analysts believe that the rebound is likely to continue at least till the next quarter.
Investors believe that the company’s progress in developing medicines for neurological disorders, Angelman syndrome or fragile X syndrome, and rare epileptic encephalopathies are going at a faster pace.
The company on Monday unveiled the preliminary phase 2 open-label extension study results of soticlestat that suggests increased seizure reduction with prolonged treatment. Soticlestat inhibits an enzyme called cholesterol 24-hydroxylase (CH24H), which converts cholesterol into 24HC. CH24H plays a key role in the over-activation in a certain metabolic pathway related to CNS disorders like epilepsy.
Rare neurological disorders represent an attractive area for drug development as the understanding of the underlying biology has grown meaningfully.
For at least the next several years, the company is expected to incur significant expenses and increasing operating losses due to the planned clinical trials. The expenses are likely to increase in the future based on its research and development and commercial development activities. Till now, the company has not generated any revenues from commercial drug sales and is not expected to generate revenue until the commercialization of its drug candidates.
For the second quarter, Ovid Therapeutics reported a wider loss due to higher research and development expenses as well as lower interest income. The increase in clinical activities related to the company’s ongoing development programs drove the research and development expenses higher.
As of June 30, 2019, the company had total cash and cash equivalents of $47.4 million as compared to $41.5 million of cash, cash equivalent, and short-term investments as of December 31, 2018. As of June 30, 2019, the company had an accumulated deficit of about $179.6 million and working capital of $44.4 million.