Ovid Therapeutics (OVID) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited condensed consolidated financial statements for Q1 2025 show a net loss of $10.2 million, an improvement from Q1 2024, with total assets decreasing to $81.7 million due to reduced cash and marketable securities Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $81.7 million from $92.2 million at year-end 2024, driven by a decline in cash and marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $21,136 | $26,301 | | Marketable securities | $21,860 | $26,774 | | Total current assets | $45,921 | $55,940 | | Total assets | $81,654 | $92,167 | | Liabilities & Equity | | | | Total current liabilities | $9,307 | $10,522 | | Total liabilities | $22,377 | $23,941 | | Accumulated deficit | $(314,533) | $(304,299) | | Total stockholders' equity | $59,276 | $68,226 | | Total liabilities and stockholders' equity | $81,654 | $92,167 | Condensed Consolidated Statements of Operations For Q1 2025, the net loss improved to $10.2 million from $11.7 million in Q1 2024, primarily due to reduced R&D and G&A expenses Statement of Operations Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $130 | $148 | | Research and development | $6,659 | $10,397 | | General and administrative | $6,021 | $7,168 | | Total operating expenses | $12,680 | $17,565 | | Loss from operations | $(12,550) | $(17,417) | | Other income (expense), net | $2,315 | $5,723 | | Net loss | $(10,235) | $(11,694) | | Net loss per common share | $(0.14) | $(0.17) | Condensed Consolidated Statements of Cash Flows Operating activities used $10.3 million in cash in Q1 2025, a reduction from Q1 2024, resulting in a $5.2 million decrease in total cash and equivalents Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,280) | $(16,686) | | Net cash provided by investing activities | $5,102 | $20,188 | | Net cash provided by financing activities | $13 | $228 | | Net (decrease) increase in cash | $(5,165) | $3,731 | | Cash, cash equivalents and restricted cash, at end of period | $23,067 | $32,703 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail liquidity, accounting policies, and significant events, including $43.0 million in cash, soticlestat program discontinuation, and a $1.8 million fraudulent transfer recovery - Management believes that the Company's existing cash, cash equivalents and marketable securities of $43.0 million as of March 31, 2025, will be sufficient to fund its current operating plans for at least the next 12 months[33][34] - In January 2025, Takeda announced the discontinuation of the soticlestat program, eliminating continuing debt or obligations to Ligand Pharmaceuticals related to the prior royalty sale[52][115] - In January 2025, the Company fully recovered $1.8 million from a fraudulent transfer that occurred in 2024 and recorded it as a gain in other income[108] - The company operates as a single segment focused on developing medicines for brain conditions, with the Chairman and CEO as the Chief Operating Decision Maker (CODM)[130] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial performance, attributing reduced net loss to lower operating expenses from restructuring and program pauses, confirming $43.0 million cash sufficiency for 12 months Results of Operations Total operating expenses decreased by $4.9 million in Q1 2025, driven by $3.7 million lower R&D and $1.1 million lower G&A expenses due to restructuring and program pauses Change in Operating Expenses (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Change $ | | :--- | :--- | :--- | :--- | | Research and development | $6,659 | $10,397 | $(3,738) | | General and administrative | $6,021 | $7,168 | $(1,147) | | Total operating expenses | $12,680 | $17,565 | $(4,885) | - The $3.7 million decrease in R&D expenses was primarily due to the pause of the OV888 (GV101) program and reduced headcount from the Q2 2024 organizational restructuring[153] - The decrease in G&A expenses was primarily due to the organizational restructuring executed in Q2 2024, which reduced payroll and other costs[154] Liquidity and Capital Resources As of March 31, 2025, the company held $43.0 million in cash and equivalents, deemed sufficient for 12 months, while facing an accumulated deficit and capital raising limitations - As of March 31, 2025, the company had $43.0 million in cash, cash equivalents and marketable securities, which is believed to be sufficient to fund operations for at least 12 months[156] - The company has an at-the-market (ATM) offering program for up to $75.0 million, but its ability to sell shares is currently limited to one-third of its public float in any 12-month period because its public float is less than $75.0 million[165][166] - Future funding requirements include potential milestone payments up to an aggregate of $279.3 million under license agreements with AstraZeneca and Northwestern, which are contingent and not recorded on the balance sheet[160] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity, though short-term investments mitigate material impact from rate changes - The company's primary market risk is interest rate sensitivity, but due to the short-term maturities of its investments, a 100 basis point change in interest rates is not expected to have a material effect on their fair market value[177] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[179] - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[181] PART II. OTHER INFORMATION Legal Proceedings The company is not currently subject to any material legal proceedings - The company is not currently subject to any material legal proceedings[183] Risk Factors This section details significant risks including the need for additional capital, high drug development failure rates, competition, intellectual property challenges, and Nasdaq listing compliance issues - The company will require additional capital, which may not be available, and failure to obtain it will force delays, limits, or termination of drug development[187] - All drug candidates are in early clinical or preclinical development, with a high risk of failure, and success depends on successful development, regulatory approval, and commercialization[185][207] - On February 10, 2025, the company received a notice from Nasdaq for non-compliance with the minimum $1.00 bid price requirement and has until August 11, 2025, to regain compliance[359] - The company's ability to raise capital via its Form S-3 registration statement is limited to one-third of its public float (currently under $75.0 million) in any 12-month period[203] - A material weakness in internal control over financial reporting related to a fraudulent transfer was identified in Q3 2024 and remediated as of December 31, 2024[353][355] Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025[381] Exhibits This section lists exhibits filed with the Form 10-Q, including corporate documents and officer certifications