Ovid Therapeutics Inc. has announced a significant private investment in public equity (PIPE) financing that is expected to generate up to $175 million in gross proceeds, with an initial closing of approximately $81 million. The financing, expected to close on October 6, 2025, will provide the New York-based biopharmaceutical company with substantial resources to advance its pipeline of small molecule medicines for brain conditions with significant unmet medical need.
Strong Investor Interest Drives Major Funding Round
The PIPE financing attracted participation from several prominent new investors, including Janus Henderson Investors, RA Capital Management, Eventide Asset Management, Coastlands Capital, Blue Owl Healthcare Opportunities, Balyasny Asset Management, Saturn V Capital, and Ally Bridge Group. The round also included existing investors such as ADAR1 Capital Management and Affinity Healthcare Fund, LP, demonstrating continued confidence in Ovid's therapeutic approach.
TD Cowen, Leerink Partners, and Oppenheimer & Co. are serving as joint placement agents for the financing.
Complex Securities Structure Maximizes Funding Potential
Under the securities purchase agreement, Ovid is selling 57,722 shares of Series B non-voting convertible preferred stock, along with Series A warrants to purchase 38,481,325 shares of common stock and Series B warrants to purchase 28,861,000 shares. Each security unit is priced at $1,400, with warrants carrying an exercise price of $1.40 per share.
The Series B Preferred Stock is convertible into 57,722,000 shares of common stock, with each preferred share converting to 1,000 common shares, subject to stockholder approval and beneficial ownership limitations. If all warrants are exercised for cash, the company could receive an additional $94.3 million in gross proceeds, bringing the total potential funding to $175 million.
Pipeline Focus on CNS Disorders
Ovid is developing a pipeline of targeted small molecule candidates that address neuronal hyperexcitability underlying multiple neurological and neuropsychiatric disorders. The company's lead programs include:
OV329, a next-generation GABA-aminotransferase inhibitor being developed as a potential therapy for treatment-resistant seizures and other undisclosed indications. This compound represents an advancement in targeting the GABAergic system for seizure control.
OV350 and OV4071 are part of a library of compounds that directly activate the KCC2 transporter for multiple CNS disorders. The KCC2 transporter plays a crucial role in maintaining proper neuronal chloride gradients and preventing hyperexcitability.
Strategic Timing and Regulatory Milestones
The Series A Warrants include a unique termination provision tied to regulatory progress, expiring 30 days after Ovid announces clearance of its first investigational new drug application, clinical trial application, or foreign equivalent for OV4071 clinical development, or by October 6, 2030, whichever comes first. This structure aligns investor interests with the company's regulatory advancement timeline.
Extended Operating Runway
The company intends to use the net proceeds from the initial closing, combined with existing cash, cash equivalents, and marketable securities, to fund research and development, general corporate expenses, and working capital needs. Ovid expects its cash resources will support its operating plan into 2028, providing substantial runway for clinical advancement of its CNS-focused pipeline.
The financing structure includes registration rights, with Ovid agreeing to file a registration statement with the Securities and Exchange Commission for the resale of shares issuable upon conversion of the preferred stock and exercise of warrants.
