Hello, everyone, and welcome to this latest in a series of fireside chats here at the H.C. Wainwright Neuroperspectives Conference. My name is Ram Salvaraju, and I'm a Managing Director and Senior Healthcare Equity Research Analyst at the firm. My next presenting company is Ovid Therapeutics, traded on the NASDAQ under the ticker symbol OVID. We cover Ovid Therapeutics with a buy rating and 12-month price target of $4 per share. It's my pleasure to introduce the Chief Executive Officer, Meg Alexander. Meg, it's a pleasure to have you with us today.

Thank you, Ram. Happy to be here.

So for those in our audience who aren't as familiar with Ovid, this is a company focused primarily on neurological indications with a broad and diversified pipeline. What is particularly intriguing about Ovid is the nature and uniqueness of the targets that are being addressed by its various pipeline candidates. I think, Meg, it would perhaps be helpful if you could just take us through the most salient aspects of the Ovid pipeline as it stands today and what the key defining characteristics are of the targets that Ovid has selected to target and why they are important in neurological and neuropsychiatric indications.

Thank you for that, Ram. I'd be happy to. And you really set the story up well in the sense that as we have built Avid Therapeutics, strategically, there were some important things that we considered in terms of factors as we built our pipeline. One of those was the fact that we're focused on small molecules. That's what our team is good at prosecuting. We specifically went after what we consider to be universal biological targets in the brain. What I mean by that is we went after targets that have broad potential therapeutic applicability to disorders driven by too much neural excitation, basically put simply, when the excitatory inhibitory balance of the brain is not right. So we were looking for biological targets that had breadth to quell that hyperexcitability across a number of indications. And importantly, the last piece, which you alluded to, Ram, was the fact that we went after completely differentiated mechanisms of action. Unfortunately, in the field of the CNS, for too long, we've been going after the same targets with the same mechanisms. And some of my colleagues across the field have done a really nice job of improving the pharmacology, starting to make medicines for the brain safer, easier to use, but nothing that's been really new mechanistically that's helped creating that step change for patients who don't have good solutions or who continue to have symptoms today. Symptoms like bad seizures and epilepsies or forms of psychoses like hallucinations and delusions. There just has not been enough novel innovation. So as we built Ovid, we focused very much on differentiated mechanisms. And we also felt that that was going to be a strategic advantage because we wanted to be enrolling trials where we weren't competing with two or three other companies that had the same mechanism of action. And we felt like if we were able to succeed commercially, we would have something truly differentiated and valuable. So that indeed is what we've endeavored to do. I'll talk very quickly about the two different mechanisms across our pipeline. By the end of this year, we will have five programs up and running in the clinic, proof of mechanism or proof of concept studies. We expect actually four to five milestones in the next 12 to 18 months from those programs. And they basically comprise a very exciting epilepsy program called OV329. That is in phase two right now, although we have a really interesting proof of mechanism, proof of signal biomarker study that I'll read out around the end of this year. Again, completely novel mechanism for quelling neural excitation. And that essentially is a mechanism called GABA aminotransferase inhibition. But really simply, we inhibit the enzyme that eats GABA. GABA is the main inhibitory neurotransmitter in our brain. More GABA equals a quelled brain. So we're developing our V329 for focal onset seizures, which is a busy category, but we believe we have a lot of good differentiation there. And then we're developing a pediatric formulation for two very intractable developmental epileptic encephalopathies called tuberous sclerosis complex seizures and infantile spasms. So that's what we'll know. We can talk more about the differentiators of that program if you want to, Ram. But the other part of our pipeline, which has been earlier, but is potentially very exciting because it may be transformational in the field of neurotherapeutics, and that is our program, which is KCC2 direct activators. KCC2 sounds a bit like a Soviet rocket, but it stands for potassium chloride co-transporter 2. It's a very important target in the brain for enabling, again, GABA, our main inhibitory neurotransmitter, to work. And when this particular transporter is dysregulated, GABA can't do its inhibitory job. Essentially, the brakes in the brain can't work as they should. And KCC2 has been really the great white whale of neurology and really neuropsychiatry because of its potential relevance across a number of different diseases and symptoms. the challenge is it's been a really hard target to drug until now and now we've actually had two clinical stage direct activators our oral formulation which we're really excited about because it can enable chronic dosing is in the clinic being studied in humans actually right now as we speak and things are going well and it will also again for that study have a really exciting electrophysiology readout and essentially a proof of signal uh study that we'll read out around the end of this year. And that's using something called ketamine and a ketamine challenge. But I can tell you more about that if you're interested in a moment. So lots happening at Ovid right now.

So, you know, I think the most logical place to start would obviously be OV329. And for those in our audience who are not familiar, not only is GABA aminotransferase inhibition an interesting target, it's also a very well-validated one clinically and to a certain extent commercially, because there is a first-generation GABA immunotransferase inhibitor that has been brought through to the market in multiple territories called Vigabitrin. And in many ways, OV329 has built upon the key lessons of the Vigabitrin program and Vigabitrin's commercial history. Correct me if I'm wrong, but OV329 was specifically designed by a very storied individual in the history of neuropsychiatry and neurology-focused drug development, an individual named Richard Silverman, who is a professor emeritus at Northwestern University and who perhaps most notably is considered the key inventor of two very important neurological drugs, namely gabapentin, originally commercialized under the trade name Neurontin by Pfizer, and Lyrica, or pregabalin, commercialized also again by Pfizer, for a wide array of neurological conditions. But OV329 carries a number of attributes that are similar to those of vigabitrin, but also differs in key ways from vigabitrin, which should, correct me if I'm wrong, allow it to succeed everywhere that Vigabitrin has, but also penetrate into areas where Vigabitrin has not been considered advisable, even for clinical development, because of its side effect profile. So maybe elaborate on that just generally, and then maybe take us through the salient features of the phase two program with OV329.

Yeah, thank you. That's a very good introduction to the compound realm. So OV329, you're right, does build on the work that was done with the first generation medicine, which is called Vigabatrin. That was marketed by Lundbeck now many, many years ago. And that has really been the only other GABA aminotransferase inhibitor in history. Why is that when it's a validated mechanism? And we know that this works as an anticonvulsant. And the why, of course, was that there was an idiosyncratic safety issue associated with the first generation drug. So we had to do a lot of work over a lot of years. We had good reasons to believe that the safety issue was very specific to that compound and that it was not on mechanism. We had to do the work to prove that, which we've subsequently done with OB-329. And as a result, my ambitions for OB-329 now are much greater than what we saw with that first-generation medicine. So specifically, through the work that we've done to characterize OB-329 to date, we believe fundamentally it will be a safe GABA-AT inhibitor, which is, of course, the minimum value proposition relative to that first generation drug. Drugs have to be safe. But what's really exciting about OV329 is a couple factors. We have a therapeutic index because of the potency of OV329, thanks to the medicinal chemist Rick Silverman, who helped us with this, that's far greater than that first generation drug. So in different humans and models, we're anywhere between a few hundredfold to a thousandfold more potent than Vigaptrin was. It gives us a wide therapeutic index to play with relative to that first generation asset. And what that means is we're able to deliver inhibition, again, a breaking system in the brain that we believe may be broader than what the first generation drug could do because we have better toleration. So what that means is we're able to deliver GABA in the synapse and the extrasynaptic region, hopefully creating more comprehensive inhibition in the brain, which may lead to better seizure reduction, which is so important because those are the initial indications where we're planning to take OB-329. But my great hope for it in terms of the opportunity and where we'll take it into phase two is that unfortunately in neurology, seizure medicines have been a painful trade-off of poor tolerability relative to efficacy. It's kind of like where cancer was 20 years ago. And too many medicines in the brain today work, but they sedate you, they give you headaches. there's collateral tolerability issues that come with trying to avert seizures and save your life and that's an unfortunate trade-off. With OV329 not only do we believe that we may be able to deliver more inhibition and that's been suggested and demonstrated from our phase one study where we were able to show that we did that relative to Vigabitrin's past performance but importantly at this stage of development OV329 looks to be a seizure medicine that has better tolerability than any seizure medicine that's marketed today or in development. And that's a big deal because some of my colleagues and peers in this field are making what I think are going to be really good medicines. But the problem with epilepsy is, unfortunately, so many of these individuals have to take multiple medicines. Drugs can interact with each other. You know, when you fail one mechanism, you can't take more of the same. You might not get an additional benefit. So we really need new mechanisms today that work, that are safe, well-tolerated, and they're easy to take. And that's what OV329 is appearing to shape up to be. So we're taking it into a phase two trial, actually actively right now. And that phase two program will be a traditional epilepsy study. We're going to provide more guidance on that in the next quarter associated with our filing. But in addition to the phase two program, we're running a really interesting study called a photosensitivity study, which is essentially sort of a human assay or biomarker that helps us confirm that the doses we're taking into pivotal trials are anticonvulsant doses. We certainly have a lot of good biomarker data that suggests that they are, but this is more de-risking data that we hope to produce in the next six months while we run that phase two study, which we expect to read out around the middle of this time next year.

And, you know, just to offer some additional context. Clearly, you know, some in our audience will be familiar with older generation anticonvulsant drugs like lamotrigine or valproic acid or some of the racetams, et cetera, et cetera. So in effect, at the end of the day, if 329 winds up being all that you hope it is, it could conceivably be deployed in a lot of the same areas where these older generation anticonvulsants are deployed today and could offer a meaningful safety advantage versus all of those drugs. But maybe talk a little bit about, you know, kind of the key lead indications that you're focused on with this candidate. And maybe also talk a little bit about how activity profiles in those indications have recently been attributed value by institutional investors. You know, historically, I believe in previous conversations, we've touched upon, you know, companies like Praxis and Xenon, you know, certainly historically, you know, Specialty neurology companies like Sopernis have been active in the movement disorder space. But certainly with 329, you now have not only an opportunity, but certainly what appears at this juncture to be an undervalued one, given Ovid's $450 million or so market cap.

So I think for investors looking at Ovid, the reason, well, one, I think there's a tremendous opportunity. You heard me start the call saying we have four to five very significant milestones happening over the next 6, 12, 18, 24. months across our pipeline, all of which I think should be very meaningful and potentially extremely de-risking and value accruing for our compounds. But we are taking OV329 into indications that are the lowest risk indications we believe based on the underlying mechanism to the biology and also relative to clinical risk. And those three indications are focal onset seizures, which I'll talk a little bit more about, tuberous sclerosis complex, as I mentioned before, and infantile spasms. And specifically, this mechanism of action has been well validated in patients and those indications already. They also are indications where counting seizure types and endpoints are reasonably hard relative to, and when I say hard, I mean clear, better to count, well-characterized endpoints that are accepted by regulators. So mitigates some clinical and regulatory risk also helps provide the most direct line to underlying biology fit relative to the mechanism from what we know. That's also supported by many, many, many animal studies that we've run over a long time. I've seen OV329 work in more seizure models than I think any seizure medicine to date because we've run it in, I don't know, probably 12 or 13 where we've seen efficacy across them all. But you were rightly saying that this mechanism that essentially allows more GABA in our brain in the synapse and the ectrosynaptic region has utility far beyond those three indications that I initially talked about. So I want to take risk off relative to the next couple of years and where there's tremendous unmet need in those three indications that I mentioned. But the applicability of this mechanism in OV329 and other DEEs and neurodevelopmental disorders, even in pain, where I have very strong data, are all opportunities to grow this asset over time and to really lead the unlocking of this mechanism of action for the betterment of patients. So that's the opportunity. And you asked a really good question. So what are the sales relative to Vigabatrin? And it's important to know Vigabatrin, because of the idiosyncratic safety issue with it here in the United States, had a very serious REMS program and a black box. However, if we have a GABA-18 inhibitor that doesn't have that, we believe that 329 will be used earlier and longer, potentially unlocking big opportunities. So even with conservative assessments and focal onset seizures, which is an increasingly competitive indication, we believe there's easily a billion dollars worth of sales for OB-329, even if you make extremely conservative assumptions about penetration, like 10% penetration. On the other hand, in the very rare but very disastrous pediatric epilepsies that I refer to, there's even no innovation. Pipelines are very dry. And unfortunately, the few drugs that exist are old and they don't work in a lot of the patients. So Vigabitrin there was producing sales at peak at around 330 million in the US, not including the rest of the world. So if you assume that that's a drug that was constrained to a very small number of patients, and you think about us being able to be used earlier, longer, and with more patients, I assume at minimum, we will double that just for the pediatric epilepsies. So in total, I think OV329, just for where we're going right now, is potentially anywhere between a $1.75, $2 billion opportunity. That doesn't include any indication expansion beyond that.

And just to refresh our memory, you know, in terms of, you know, the phase one target engagement and biomarker data, you know, what would you say were the most important elements of this? You talked earlier about the width of the therapeutic index with OV329, you know, maybe give us a sense of, you know, the grounding that the phase one data provided that enables you at this juncture to be able to stipulate that OV329 does have a very wide therapeutic index and provides you with a lot of therapeutic indication and clinical development flexibility.

Yeah. So there were three factors with our phase one study that I think gave us a lot of insight and value that we were looking for. So the first is that you don't take for granted with any drug early in CNS development is that you're getting into the brain and having an effect. So we were able to see that and confirm that. We actually could see that we were elevating levels of GABA, the main inhibitory neurotransmitter relative to participants who were just taking placebo vehicle, right? So that was one thing you never take for granted. Importantly, we knew that therapeutic doses of igabatrin moved certain parameters, certain biomarkers in the brain that are measures of inhibition in the brain. So we basically knew the goalposts that we needed to hit to show that we were having an underlying effect in the brain that was consistent with what happens when the first generation drug was stopping seizures. And we were able to show that with biomarkers, multiple biomarkers, in fact. And not only did we match the first generation drug's performance and inhibition, we actually surpassed it on some of them. So again, really encouraging that we may actually have therapeutic utility that could be better than the first generation drug that we're asking and answering that question the right way now through phase two programs. You know, and then finally with OV329, we had modeled using five or six different streams of evidence, the level of exposure in the blood of the drug that we thought would correlate with therapeutic dosing. And essentially the human data that we've now gotten correlates that very, very nicely, such that our dosing predictions appear to be right. And when we get to that exposure in the plasma, we see an ambition in the brain in a highly statistically significant way. So, you know, that's always a comfort when you're going into larger trials that you've got multiple streams of evidence converging in the same place.

Yeah. So I think, you know, with respect to 329, what our investor audience should be aware of is that this is a rapidly maturing asset, has multi-indication potential, and is very favorably positioned from a valuation standpoint relative to other candidates, other perhaps somewhat later stage assets in the movement disorder space, but that has the potential to be considered even more risk mitigated because of the precedent example of Vigabitrin. And in particular, as you mentioned, the REMS program, the safety issues with Vigabitrin are well documented. There are heavy restrictions on Vigabitrin because it causes visual field defects once you reach a predetermined cumulative dose. So having the absence of visual field defects with OV329 is a very important aspect and ultimately should position it very well. But you can effectively follow in the footsteps of Vigabitrin, but also break new ground with this asset. Let's turn now to OV4071, which is your lead candidate in the KCC2 inhibitor portfolio. Now, I want to specify, as a brief preface, that this is a portfolio of assets aimed at a very unique target, which historically, as you mentioned earlier, has not been adequately queried or explored by other companies in the neurology field. So by and large, Ovid is out there on its own, innovating at the cutting edge when it comes to this target. But there is applicability in both neurodegenerative disease and neuropsychiatry. Is that correct?

Correct. Correct. The therapeutic potential of KCC2 is pretty profound. I mean, I think other strategic companies, big companies who have looked at this and tried to drag this target, almost look at it as like a PD-1 moment for the brain. Not in a sense, it's not oncology, but in terms of what the therapeutic breadth of directly activating KCC2 may mean from not just those areas that you mentioned, but everything from neurological conditions like seizures and pain and epilepsies and the neurodevelopmental disorders he mentioned to areas of psychoses and hallucinations like schizophrenia, Alzheimer's agitation, and hallucinations. The potential target is quite broad relative to symptoms of a number of different diseases, all of which are driven by too much excitation in different geographic locations essentially in the brain?

So with respect to 4071, you know, there are specific kind of therapeutic area prioritizations that you've clearly laid out. You know, for example, in the neuropsych space, you know, we look at schizophrenia as being a very clean indication to go forward in because the approvability characteristics and requirements are very clearly demarcated. Those have been established kind of, you know, over the last 10 plus years in the context of atypical antipsychotics, the key primary efficacy endpoint outcome measures have already been clearly demarcated. So that obviously provides you with a very interesting target opportunity and clearly represents a significant total addressable market and also an area of significant unmet need because it's well known that the atypical antipsychotics do not cure schizophrenia, leave a lot of symptoms unaddressed in schizophrenic patients, and often suffer from poor compliance, poor adherence, because they're, well, you know, very well associated with highly troubling side effects like akathisia, extrapyramidal symptoms, metabolic syndrome, weight gain, prolactinemia, you know, the list goes on and on and on. So maybe give us a sense of how you are thinking about positioning 4071 within schizophrenia and perhaps other neuropsychiatric indications as a whole, what your initial clinical development plan is within that context. And then maybe just, you know, briefly touch upon before we close your plans for 4071 in neurodegenerative disease, perhaps most importantly within areas like dementia with Lewy bodies.

Yep. So it's a very good setup on the unmet need. Thank you, Ram. So OV4071 is a very exciting molecule. And I don't say that lightly. In the areas of psychiatry, while the unmet need is as profound as what you've just described, Ram, unfortunately, the translatability of animal models historically have not been as good as we have had in other areas of the brain. With that proviso made, because that tells you a bit about the muster that, you know, my team and I need to see before we have confidence, before we take a molecule into the clinic and into humans. I have never seen data so consistent, so profound, and so confirmatory as what we've now seen with OB4071. OB4071, we know, is a direct activator of KCC2. It is a highly potent molecule. Again, really good safety margins on it. But what's exciting about OB4071 is it appears that it may have a very significant impact on areas of psychosis and be a broad syndromic antipsychosis and psychiatry medicine. And what I mean by that is at this point, we have probably 40 different models and experiments looking at genetic versions of schizophrenia, stimulant induced versions, behavioral models. Some of these we run 10 times over across different CROs. And it's all telling us that we're having a very rapid and sustained effect in psychosis, the positive symptoms, but also negative symptoms associated with schizophrenia. And we've seen the rescue of working memory, task switching, and essentially cognition or executive function, which is the holy grail, which unfortunately no medicine has really been able to do effectively to date. So we have very good data specifically relative to schizophrenia. So where we're going next, we're in a phase one study right now. At Ovid, you can tell we like to learn as much as early as possible to mitigate mid-stage clinical risk. So we're running a broad battery of exploratory electrophysiology while we run the phase one. So we'll understand tolerability, safety, but we'll hope to learn more about how we're operating on certain translational biomarkers that we've established previously in our tool program and in animals. We're then running something called a ketamine challenge. That sounds a little funky, but basically it's extremely sophisticated electrophysiology using things like EEG to be able to see how we're moving neurotransmission in the brain relative to what we've seen from our preclinical studies. And then that helps us make choices about indication sequencing. And from there, we're planning to launch a phase two proof of concept schizophrenia study around the end of the first half of next year. But what that electrophysiology will tell us, there's certain signatures on things like EEG that are highly relevant to Alzheimer's psychosis relative to acute schizophrenia. So we can get a lot of information from this phase one study and the ketamine challenge to look at the potential attributes of how OB-471 is behaving in the brain. And that gives us signals that if we see a constellation of movement on certain biomarkers that are moving metrics that are off, so to speak, in a sick person, and we're correcting them back in the right direction, starts to give us a confluence of data points and biomarkers to say, I feel comfortable going to this indication next. Because the opportunity with OB-4071 beyond that schizophrenia proof of concept study could be, as I mentioned, Alzheimer's psychosis and agitation, bluey body dementia, Parkinson's disease, psychosis, and the list goes on from there. So we're looking at, again, where is the data showing us the acid shines? And then importantly, from human data, how can we make the best decisions about indication sequencing, given that this particular molecule may have very broad therapeutic use?

So just in terms of, you know, what you anticipate are likely to be the most impactful value-driving catalysts and inflection points for Ovid. You know, are you thinking about this in terms of the phase two data with OV329? Are you thinking about this in the context of the ketamine challenge results with 4071? Or ultimately, the data in the phase two proof of concept schizophrenia study with 4071, which, you know, could come a bit later?

It's all of the above. All of these are very significant de-risking and hopefully confidence building moments. I think for investors who have not looked at Ovid, this is the time to do it. Each of those milestones over the next 6, 12, 18, 24 months are going to be extremely meaningful to being able to lock significant value. And I think if you look at some of my peers who've been successful, who have had perhaps one program that's anything like the five that I'm doing, the market has really rewarded it and so has clinical use. So I think this is the right time to look at Ovid for those who didn't. and the photosensitivity study basically tells you if you have an anticonvulsant drug. Phase two study tells you you've got the right dose to go into phase two. Those are the two big things for OB329. That's six months away and 12 months away. The ketamine challenge, which will occur by the end of this year, essentially tells us that we're getting into the brain safely and moving things the right way. Hugely validating, keep in mind for a target, that large pharma in our field has wanted to drug for two decades. So big, big deal. And then finally, you know, a phase two proof of concept study is a very important value inflection time. And that we'll have by the middle of 2028. So lots coming out of it. It's a really busy time for us, but it's a great time to look at our pipeline if you haven't.

Just two last things before we close that I figured would be important for you to delineate for our audience. Firstly, can you just recapitulate for us the length of the operational runway and whether that runs through and affect all of those value driving inflection points that you just mentioned. And secondly, you know, if you can offer us any insights into how you were thinking about potentially partnering or self-development, self-commercialization, even at this relatively early juncture.

Yep. So thanks to the support of a great base of shareholders, we have runway through all of those milestones that I just elucidated. So we have cash runway into 2029. It covers all those trials that I just walked us through, and all those potential value inflection moments. So that's important. How we look at partnering. Partnering is in the DNA of Ovid. That's something that we have effectively done for a long period of time. It actually kept us from having to equity finance the company for five years. So it's something that we do well, but we also take very seriously in the sense that we think we have assets that have incredible value, and that value is not yet reflected in our stock to its most fulsome, I think, representation today. So we'll look at value in the sense of for OV329, this is a drug that has a lot of utility. We are running global trials right now. There's a day where working with a partner to potentially expand that and some of the other indications I mentioned where it has utility could make sense. That's something we certainly would consider. On KCC2, this particular molecule, OV407, may actually be what the field has been looking for for 20 years, which will be a big, big deal if we're able to suggest and show that it does. So far, it's looking quite good. What that means is at some point, a company like mine that has good resources to do what we need to do, but can't necessarily run five large-scale clinical trials at once across massive indications, may come to a point where it makes more sense to work with a partner to unlock the value that may be inherent in KCC2 more rapidly. And, you know, we look at that with clear eyes, but it's a trade-off because, you know, I'm completely uncomfortable with taking too much upside off the table for the company and our shareholders right now. And doing the wrong deal or a deal too early would certainly do that, I believe. So we're open-eyed. This gives you a sense of, you know, the when and how we might look at things. But, you know, we think we have a lot of value to unlock really in the next 6, 12, and 18 months and want to be thoughtful to our shareholders about that.

Meg, thank you so much for walking us through the salient features of the Ovid therapeutic story. I'm sure our institutional investor audience will agree that this is a very interesting company and now is clearly the time to begin looking at it if they haven't already. I think we're going to have to leave it there. Thank you so much for participating in our conference and thank you to our audience for their attention.

Thank you, Ram.