Ovid Therapeutics Inc. announced the company has entered into an exclusive license agreement with AstraZeneca for a library of early-stage small molecules targeting the KCC2 transporter, including lead candidate, OV350. The company seeks to optimize and accelerate development of these KCC2 transporter activators in epilepsies and potentially other neuropathic conditions. Under the terms of the agreement, AstraZeneca will receive an upfront payment of $5 million in cash and $7.5 million in shares of Ovid common stock.

AstraZeneca is eligible to receive potential clinical development milestones of up to $8 million and regulatory milestones of up to $45 million. Total commercial milestones could reach $150 million and tiered royalty payments range from the single digits up to 10% on net sales. At the time of proof of clinical efficacy, AstraZeneca will have the right of first negotiation to opt in on a strategic collaboration.

OV350 is an early-stage compound that has shown encouraging in-vitro and in-vivo proof of concept in resistant forms of epilepsy. The compound is designed to directly target and activate KCC2, a potassium chloride co-transporter responsible for maintaining chloride homeostasis in neurons. By improving chloride homeostasis, OV350 is thought to inhibit neuronal hyperexcitability commonly associated with epilepsies.

Research has shown that the presence of KCC2 mutations and dysfunction may contribute to the neuronal hyperexcitability commonly seen in epilepsies. The program was advanced in a collaboration between AstraZeneca and the Tufts Laboratory for Basic and Translational Neuroscience Research, which included Drs. Stephen Moss and Jamie Maguire.

Ovid plans to continue a strategic collaboration with Drs. Moss and Maguire, who are leading authorities in GABA receptor research and neuropharmacology. Their associate, Dr. Aaron Goldman of Harvard Medical School, will also collaborate with Ovid and translate his expertise in drug resistance to the Company's epilepsy and targeted neurotherapeutics candidates.

OV350 expands Ovid's franchise of novel anti-epileptic medicines. The Company is also developing OV329, a next generation pregabalin for tuberous sclerosis and infantile spasms, which is expected to enter the clinic in 2022. Earlier this year, Ovid licensed soticlestat, a novel cholesterol 24-hydroxylase inhibitor to Takeda.

Soticlestat is currently being studied in Phase 3 trials for Dravet and Lennox Gastaut syndromes.