William Blair initiated coverage of Ovid Therapeutics (NASDAQ:OVID) with an “outperform” rating and fair value estimate of $28. The stock closed at $14.57 on May 26.
Ovid is focused on rare neurological disorders. Its lead candidate, OV101, was in-licensed from Lundbeck, where the compound was initially developed to treat primary insomnia before being shelved when the sleep market became dominated by generics.
Analyst Tim Lugo writes that Ovid is testing OV101 in Angelman syndrome and has initiated a Phase 2 trial, called STARS, in adults with the disease. The company is also conducting a Phase 1 pharmacokinetic study with OV101 in adolescents with Angelman and fragile X syndromes, and intends to take the product into pediatric patients in the future, he added.
Ovid’s second product, OV935, was in-licensed from Takeda in a deal where both companies will have equal development and commercial responsibilities and a 50/50 global profit share.
Mr. Lugo said OV935 is a potential first-in-class cholesterol 24-hydroxylase inhibitor, an enzyme that catalyzes the formation of 24-hydroxycholersterol, and a positive allosteric modulator of NMDA receptors.
The companies plan to initiate a Phase 1b/2a trial in 2017 to examine OV935 in epileptic encephalopathies, which include Dravet syndrome, Lennox-Gastaut syndrome, and tuberous sclerosis complex.
