Ovid’s Gameplan: Flicking The Master Switch In Neurology

Under the leadership of industry veteran CEO Jeremy Levin and chief operating officer Meg Alexander, Ovid Therapeutics is making strategic moves to address unmet needs in neurology.

In November 2024, the company paused the development of its Phase II asset OV888 to reassess clinical strategies following mixed results from competitor studies. This decision exemplifies the agility required in today’s biotech landscape, especially for smaller companies navigating the complexities of rare disease drug development.

Strategic Pivot, Pipeline Refinement

Ovid hit the brakes on its program after Recursion Pharmaceuticals’ Phase II SYCAMORE study of REC-994 for symptomatic cerebral cavernous malformation (CCM) announced a mixed bag of clinical results in September 2024.

While the study met its primary goal of safety and tolerability, the efficacy signals were unclear due to the lack of defined success criteria for this disease. The biotech announced that the drug showed “encouraging trends” in MRI-based exploratory efficacy measures at the highest dose of 400mg.

Ovid CEO Levin explains his decision to pause its trial: “In any company, you have to make strategic decisions. And the teaching for small companies, as we are, is that if you’re going to use your capital wisely and if you’re going to be extraordinarily focused, then you must make hard decisions at certain times.”

When clinical programs are delayed or terminated, it is often to learn from market observations. This is especially important in new areas where no therapies have been developed before, as in this case. The new understanding is not only novel for the company but also for regulators, and the physicians who might eventually prescribe the therapy.

The paused study is of OV888, a blood-penetrant ROCK2 inhibitor being developed for CCM. Initially, a Phase II proof-of-concept study with collaborator Graviton was scheduled to start in the second half of 2024.

“At Ovid, we have tried to understand what we can learn from others,” said the ex-Teva CEO, who has been leading Ovid for 10 years since he departed the generics giant in 2013. He explained that there is “clear evidence” supporting the inhibition of ROCK2 which can change the disease in animals and mitigate against the lesions in the brain, as well as the absorption of the molecule.

What is not understood is how the regulators will react to ongoing trials. “What will the FDA learn? How well do they understand this disease? What do they accept as the endpoints? How do they want the trial to be structured? All of these have to be considered. It’s easier in oncology. It’s easier in arrhythmia. It’s easier in blood clots. But in a new disease, you need to define that endpoint and take account of other trials,” Levin asserted.

Taking Tough Decisions

Making thoughtful decisions about strategy is not new for Levin and his senior team. Ovid sold its first-in-class cholesterol 24-hydroxylase (CH24H) inhibitor soticlestat to Takeda in 2021 for an upfront price of $196m. With regulatory and commercial milestone payments and tiered double-digit royalties on product sales, that could accumulate up to $856m.

“Other companies would have said, ‘let’s go on and do this ourselves’. We felt that given the Phase II results, we absolutely needed to decide, either to partner it with a European company and build the $400m required to take it to marketplace, or to sell it back to Takeda,” Levin recalled, adding that the decision took weeks. “We had so much inbound interest to partner with us, Takeda had to really run to get to buy this back,” he said.

Asked about who is key to this type of strategic decision making, Levin quipped, “The good news is, I’m chairman. The bad news is, I’m chairman! I surround myself with people who are much smarter than me. One of them is Meg [Alexander], the second is the head of research, the third is the head of regulatory and then we act outside of the company to acid test our thinking.” The beauty of biotech thinking, is that while a company might be small, it can often “pull the trigger very quickly”, he said.

“As you can imagine, to call the patient community in countries around the world and tell them we’re going to pause the initiation of the study is quite hard, and they were with us every step of the way,” Meg Alexander, Ovid chief operating officer, told In Vivo.

She added that Ovid has a “concentric circle” of advisors around it, including patient communities and world-leading investigators in the area, all of whom were involved in the decision-making process. “They collectively felt that it was the right decision to make for the business and the patient community,” she said.

Alexander explained that, unlike many other small biotechs, Ovid is not a “one drug wonder.” She emphasized how challenging it can be for developers to make decisions when relying on a single product. That is why Ovid made a strategic choice at an early stage to ensure it would always have “strategic optionality” and would not need to depend on one program or compound.

From a business perspective, she believes that Ovid’s leadership team is doing the right thing for both the community and the company, as its decisions are not existential. “We built our company to be a sustainable company with potentially multiple medicines coming out of the pipeline in the future, so that also gives us the freedom to look critically and with open eyes, to be creative and try to make it work, because we want to make medicines that work for patients, and to know when we need to take a pause on this,” she explained. This strategy has been crucial for Ovid, she said, especially compared to other companies with a similar market cap.

Investors also valued this disciplined approach, with Wedbush analyst Laura Chicco describing the decision to pause the trial as “a positive move to ensure the highest potential for success.”

“This appears to be a prudent strategy as it also seeks to conserve capital but also better understand appropriate clinical trial design parameters,” she said.

Ovid and development partner Graviton Biosciences will now evaluate clinical design learnings, study duration, patient enrichment strategies, biomarkers, endpoints, and time-to-event measurements from competitor Phase II programs. This includes the University of Chicago’s atorvastatin study.

Ovid plans to update the timing guidance for Phase II initiation once the atorvastatin study is complete and results are evaluated. This allows Ovid to redirect resources to more promising areas of their pipeline, such as its Phase I next-generation GABA-AT inhibitor, OV329, and particularly its burgeoning work on KCC2 activators.

The KCC2 Revolution

Work on KCC2 (potassium chloride cotransporter 2) activators is at the heart of Ovid’s pipeline. This novel target represents a potential paradigm shift in treating a wide range of neurological and neuropsychiatric conditions.

Alexander described KCC2 as “a master switch for hyperexcitability,” highlighting its crucial role in maintaining chloride balance in the brain, which is essential for proper neuronal function (see box).

Unlike traditional approaches that target specific symptoms or pathways, KCC2 activation has the potential to address underlying mechanisms common to various neurological disorders including epilepsy, pain, tinnitus, and certain forms of autism and schizophrenia.

There is a compelling parallel between KCC2 and the revolutionary impact of PD-1 inhibitors in oncology. Just as PD-1 inhibitors transformed cancer treatment by harnessing the immune system, KCC2 activators could revolutionize neurology by restoring fundamental neuronal balance.

“Initially, PD1s were used for melanoma. Over time, BMS and Merck gained a deeper understanding of the disease’s biology and how to target it with cancer treatments, leading to more thoughtful drug combinations. Now, PD1s are combined with other cancer drugs. A similar approach will be seen in neurology. By fixing chloride balance with KCC2, other GABA-targeting medicines can become effective again, addressing issues like toxicity and reduced effectiveness,” said Alexander, adding that “KCC2 could usher in a completely new revolution in neurotherapeutics.”

KCC2 is a complex protein that plays a critical role in maintaining the balance of chloride ions in neurons. Understanding its precise mechanisms and how to modulate it effectively has been challenging. “It’s a very hard target to drive and directly activate,” explained Alexander, who also heads up Ovid’s R&D division. “Others have been able to hit the side of it and potentiate it, but the problem is that if you don’t directly activate it and you hit other areas you have a greater risk of off-target effects.”

In early 2022, Ovid acquired the initial intellectual property library from AstraZeneca. Since then, the company has been working on optimizing and characterizing this library.

Levin explained that “to their absolute credit”, the labs of AstraZeneca, specifically Iain Chessell’s Neuroscience R&D group, conducted a stealth program in which they screened 1.3 million compounds and were on the verge of a significant breakthrough, discovering nearly 100 pharmaceutically active drugs that were direct activators. Unfortunately for Chessell and neurology, but fortunately for Ovid, COVID-19 led AstraZeneca to shift focus to oncology, diminishing its neurology programs.

Ovid became the “fortunate recipient of the program”, which had demonstrated the potential for direct activators, allowing them to move it forward.

Levin noted that every other major neurology company had pursued this target. The difference in this case was the “incredible AstraZeneca team in pulling out those unique compounds,” he said. “There’s a beautiful set of assays that nobody else would have done in the same way, or as rigorously as that,” he explained.

The most advanced asset from this portfolio is OV350. The company plans to start a Phase I study of an intravenous formulation in healthy volunteers in the first quarter of 2025, with the single ascending dose/multiple ascending dose (SAD/MAD) study expected to read out in the first half of 2026. Indications could include neuronal synuclein disease-related psychosis, and the team expects to quickly expand into an oral formulation study next year as well, including a bridging study to enable a Phase II study initiation in late 2026 or early 2027.

Accelerating Development

Ovid’s progress with its KCC2 program has been swift. The company submitted its Investigational New Drug (IND) application to the US FDA ahead of schedule, paving the way for Phase I trials, and the team is already looking ahead to multiple Phase II opportunities, reflecting the broad potential of KCC2 activation across various neurological indications, see below.

Like any good idea, Ovid is not alone here. Boston biotech Axonis Therapeutics is developing medicines targeting KCC2 by translating breakthrough discoveries from Laval University and Boston Children’s Hospital, Harvard. Axonis has developed a proprietary discovery engine to treat conditions such as epilepsy, pain, and other central nervous system pathologies.

In October, it completed an oversubscribed series A funding round of $115m to further its lead development candidate, AXN-027, through clinical proof-of-concept in patients with epilepsy. Proceeds will also enable the development of next generation compounds targeting KCC2 in these and other indications, including psychiatric and neurodevelopmental disorders.

Ovid’s Partnerships, Future Growth

Ovid finished Q3 2024 with $62.7m in the bank, sufficient to fund operations into the second half of 2026. While it maintains a lean team structure and has a secure cash runway, the company is positioned for growth through selective and strategic partnerships.

Rather than seeking a single, all-encompassing deal, Ovid aims to build an ecosystem of partnerships over the next two to three years. This strategy allows it to maintain control over its core assets while leveraging external expertise and resources in specific areas.

“We’re getting a lot of inbound calls about this [KCC2 program] from pharmaceutical companies, and we anticipate that, with just a little bit more effort on our part, we’ll be able to expand this and start to ignite a fire, just like in PD-1,” said Levin.

As Ovid Therapeutics advances its KCC2 program and explores other innovative approaches, the company is poised to play a significant role in shaping the future of neurological treatments. The potential for KCC2 activators to enable rational polypharmacy is particularly exciting.

As the company explores new frontiers in neurology, it stands as a compelling example of how smaller, focused companies can drive significant advancements in complex therapeutic areas

“Direct activators have arrived. There is no question now that the opportunity is just starting to open up,” said Levin.