By Colin Kellaher


Shares of Ovid Therapeutics plunged more than 65% in premarket trading Monday following the late-stage failure of Takeda Pharmaceutical's epilepsy drug candidate soticlestat, in which Ovid holds significant financial interest.

Takeda on Monday said soticlestat, which Ovid co-developed through Phase 2, missed its primary endpoints in a pair of Phase 3 studies in the rare epilipsies Dravet syndrome and Lennox-Gastaut syndrome.

Ovid sold its soticlestat rights to Takeda in 2021 for an initial $196 million and remains eligible for up to $660 million in potential regulatory and commercial milestone payments, along with royalties on sales of the drug.

Ovid last year sold a 13% stake in its potential royalty, regulatory and commercial milestone payments to Ligand Pharmaceuticals for $30 million in a deal that extended the New York biopharmaceutical company's cash runway into the first half of 2026.

Ovid on Monday said its R&D and financial strategy is independent of soticlestat's outcome, and that it plans to prioritize and pursue its clinical programs with financial discipline.

The company said it will update its guidance on potential milestones and royalty payments related to soticlestat after Takeda determines how it will proceed on the drug.

Ovid shares, which closed Friday at $3.29, were recently down 66% at $1.11 in premarket trading.


Write to Colin Kellaher at colin.kellaher@wsj.com


(END) Dow Jones Newswires

06-17-24 0934ET