Ovid Posts Larger-Than-Feared Quarterly Loss, Revenue Beat

Ovid Therapeutics posted a wider-than-expected loss in the fourth quarter, while revenues topped analysts’ expectations.

Ovid (OVID) incurred a non-adjusted loss of $0.34 per share in 4Q, compared to the $0.31 loss per share estimated by analysts. Results did however compare favorably to the prior-year quarter’s loss of $0.35 per share.

Meanwhile, the biopharmaceutical company generated total sales of $5.7 million in the quarter, above analysts’ expectations of $4.16 million.

The company’s research and development expenses were $16.9 million in the quarter, up 39.7% year-over-year. Total general and administrative expenses doubled to $10.4 million.

Earlier in March, Ovid inked a deal with Takeda Pharmaceutical, under which Takeda will secure global rights, upon the closure of the deal, to develop and commercialize the investigational medicine, soticlestat (TAK-935/OV935). The medicine was designed for the treatment of developmental and epileptic encephalopathies, including Dravet syndrome (DS) and Lennox-Gastaut syndrome (LGS). (See Ovid stock analysis on TipRanks)

Ovid CEO Jeremy M. Levin said, “This new agreement with Takeda strategically positions Ovid, upon closing, to advance our next generation neuroscience pipeline, while demonstrating the value we helped to create for soticlestat by bringing it to the initiation of two pivotal Phase 3 trials.”

“We are excited for next steps both for this asset and for our pipeline, as we work to file three INDs over the next three years and in tandem pursue an active business development initiative,” Levin added.

Following the 4Q results, Ladenburg Thalmann analyst Michael Higgins maintained a Buy rating and a price target of $7 (69.9% upside potential) on the stock.

Higgins said, “While investors have been focused on OV101 and OV935, Ovid has been identifying opportunities and partnering to secure its robust early-stage pipeline for rare neurological disorders.”

The rest of the Street is cautiously optimistic about the stock. The Moderate Buy consensus rating is based on 2 Buys and 2 Holds. The average analyst price target stands at $5.67 and implies upside potential of 37.6% to current levels. Shares have gained 69.6% so far this year.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Ovid is currently Positive as 2 hedge funds increased their cumulative holdings of the stock by 163,500 shares in the last quarter.

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