It's a GABA aminotransferase inhibitor, and we also are prosecuting a program for a target in the brain called KCC2. Sounds like a Soviet satellite, but it is potentially the great white whale of neurology and neuropsychiatry. It's a target that strategics have long wanted to drug because activating this ion transporter in the brain, KCC2, may have very broad therapeutic utility. And now we have a molecule that's suggesting that is indeed what could be the case. So, in the span of the next 6, 12, 18, and 24 months, we have four to six proof of concept and proof of signal readouts across that epilepsy program and our KCC2 direct activator program. Starting a couple of months from now and reading out both in terms of translational biomarker studies, but importantly, in terms of also RCT proof of concept studies as well. A lot going on.
Yes, very busy. So, what do you think that investors are most overlooking Ovid and not giving you enough credit for?
I have a lot of opinions on this, but where I think our stock is valued today is primarily in our epilepsy program. I would argue it's undervalued. I think we've got some pretty exciting card turnovers ahead, both in focal-onset seizures, which is a well-characterized space, but an area where there's still a lot of unmet need, as well as in developmental epileptic encephalopathies. But what's not valued in our stock today, but sitting in the room and one-to-ones today and with other funds and investors, is really getting value for our KCC2 program. There's probably reasons why that hasn't translated in our stock, but I think that is set up to change in the very near future.
We're in field right now with a phase I study, the first company that has ever drugged this target, KCC2, and we're within a reasonably short period of time of results from a translational study called a ketamine challenge. And I think that will be very meaningful because if we see the results from that that we want, we will be the only public company to have ever drugged KCC2.
What we will be able to establish in that is that we're getting into the brain, we're neuroactive, hopefully that we're modulating electrophysiology that's consistent with the mechanism of drugging KCC2, which would be more GABAergic, so more inhibition or the braking system in the brain working the right way. Maybe we have some really exciting biomarkers that we're applying, where we may actually even be able to see predictive data relative to clinical effect and efficacy, which, if KCC2 is as broad of a therapeutic target as what our pharmacodynamic data is suggesting and what the literature has long suggested, this would be early validation about the right first indications for us to walk into. Because there actually may be many that we could go into. We have extremely positive data for KCC2 acting as an antipsychotic.
Yeah.
It also has applications in areas like epilepsies.
Yeah
Rett syndrome, anxiety, chronic neuropathic pain.
Yeah.
Clearly, we're not going to do all those things at Ovid.
Yeah
but making the best indications about the most direct shot on goal for proof of concept is the aspiration.
We're going to start with KCC2 because it is very exciting, this magic-
Thank you.
bullet for the brain. Then we're going to move on to OV329 and talk about focal seizures and the rare epileptic disorders. For investors who are less familiar with KCC2, what's the biologic rationale for direct activation here of this transporter? What does it do?
Right. I've said broad therapeutic utility a few different times. Why I say that is KCC2 is very unique as a target. It's essentially a more precise way of tuning GABA, the primary braking system in our brain. Why it's a target that strategics and clinicians have long wanted to drug is it's an ion transporter. We hear that. There's other companies that have programs for ion transporters, but KCC2 is only in the brain, in the CNS, so it's neuron-specific. Essentially, when this particular transporter, which balances potassium and chloride, is dysfunctional, GABA can't do its job. It can't be a braking system. So, this transporter essentially pumps out enough chloride from the neuron that enables GABA to be the brakes, to be inhibitory.
When you start to take a look across the literature, and you look at where KCC2 is implicated, you start to reveal essentially a panoply of studies showing that it's related to either the underlying disease biology or symptoms of many diseases. Specifically, in some of the indications that we're looking at, we know KCC2 expression and function is reduced in key regions of the brain that are driving symptoms of diseases. For example, we're very interested in it for psychoses because we now have more than 40 pharmacodynamic studies that are showcasing really profound rescue effect of positive, negative, and cognitive symptoms, which is the holy grail for an antipsychotic, particularly if you don't come with all the safety and tolerability baggage that, unfortunately, prior classes of medicines have done. But KCC2, in the case of schizophrenia, we know is reduced in the prefrontal cortex.
We've been able to show in animals, now we're looking to do this more in humans, of course, and in patients. But we've been able to show that in human postmortem data and in animals that have genetic versions of schizophrenia, that KCC2 is less expressed in the prefrontal cortex. We know that when we add our direct activators, we are able to help rescue KCC2 function, and we're able to see the downstream effects when we actually go back and we look at these animals. For example, in genetic models of schizophrenia, we know that there's less expression there, and we can see that because essentially too much excitation in the prefrontal cortex drives a lot of dopamine in the striatum.
When we look at the animals that are drugged and then not drugged with our direct activators of KCC2, we can see that we've actually reduced levels of dopamine in the striatum, basically helping the braking system in the prefrontal cortex work because we've activated this target, compared to animals that don't get our drug. That's one example, but we've now replicated this again across 40 different models. The data is deeply compelling. We're excited.
Yeah. Tell us a little bit more about the development path here and the path to validation in the clinic.
Right. What we are looking to do is based on that broad armamentarium of pharmacodynamic data, we have established translational biomarkers. The way we try to work at Ovid is to try to ask and answer as many questions early in development to make the right decisions about not just clinical development, but also deployment of capital. We have established translational biomarkers in animals using electrophysiology, both genetic models of disease as well as wild-type animals. Where we are in terms of the clinic and where we go next, I said we are in a phase I study. We are doing that right now. We are subsequently starting a ketamine challenge that will run concurrently. The ketamine challenge is nice because it essentially makes KCC2 dysfunctional, so we can make the brain more aberrant, more like a disease state, so someone who has a form of psychosis.
We can use extremely sophisticated electrophysiology that has been well-codified before we ever got here. Again, looking at those biomarkers that I mentioned. Are we getting into the brain? Are we neuroactive? Are we modulating electrophysiology that is consistent with what the mechanism of action should be doing? Are we moving the needle on translational biomarkers that give us a predictive lens of the types of psychoses indications that we may want to pursue over time? Because if we are right, I think KCC2 could be a Karuna or a COBENFY x 5. I think we are looking at something much more significant. If the world of opportunity is that big, making the best indications about the proof-of-concept studies is essential. Right now, our plan is following the ketamine challenge to initiate a phase II acute schizophrenia proof-of-concept study.
The world of opportunity, as I said, is bigger than that as well. Those are the immediate plans, and if you see a positive sign in an acute schizophrenia, starting to consider and unlock the world of other forms of neurodegenerative psychoses are certainly of interest. Alzheimer's psychosis and agitation, Lewy body dementia psychosis, Parkinson's disease psychosis.
Yeah.
That is an aspiration. Although, again, we have not just OV4071 in the clinic. We have a discovery engine behind this because it is our goal at Ovid that if the bet is right about KCC2, we want to be the company that can really unlock this target and fully exploit the therapeutic opportunity that could be here, which is bigger than just psychoses, we believe.
The pipeline programs that you have, the differentiation there being different levels of activation of-
Yeah
KCC2 or different profiles, or?
Yes. I think all of the above. If this is sort of an Orexin or a PD1-like target for the brain, we want to be able to think about how can we fully realize the opportunity. The differences between the different molecules is one, having basically a backup to the first one that we have in the clinic, OV4071, is attractive. Being able to pursue different forms of mood, behavioral psychoses indications. But then we also have molecules that have an affinity to, for example, be a little bit more anxiolytic in property, anti-stress. We have molecules that have had extremely good activity in indications like Rett and genetic models.
A world doesn't work where you're pricing for a mass market, obviously, condition and an orphan. But by being able to have multiple molecules where we can really target the molecule relative to the therapeutic areas where we've already seen this class have activity would be the opportunity. Particularly in places like pain, where KCC2 is directly implicated in areas like diabetic neuropathic pain.
I would argue Ovid isn't a pain company, but if I have a separate molecule that's completely distinct from our areas of interest, gives us more optionality to truly realize what this target could be, potentially with partners over time.
Yeah. This phase I study that's going on in Australia in healthy volunteers, but elderly healthy volunteers, what are you hoping to learn from that study?
Right. No one's ever safely drugged and directly activated KCC2. We had a tool program where we did that in a small group of humans, but never in the way that we're endeavoring to do now. For the phase I study, we'll be looking at safety, tolerability, PK, the standard things. We also will conduct exploratory electrophysiology, and our hope would be that we may be able to establish a signal on EEG, in particular, in healthy humans. The big question is can we do that in a situation where you've got essentially brains in a typical physiological state? Hopefully for you and me, our KCC2 transporters are not dysregulated, right, and dysfunctional, such that if I were to give you OV4071 and study your brain on EEG, the shift in chloride gradient for you might be too subtle to pick up.
I don't know that yet. We're actively looking at that now. Versus someone who has a patient, someone like an acute schizophrenic at rest.
Yeah.
Or in the case of our ketamine challenge, we're essentially taking a healthy brain and modulating the neurobiology and seeking to then ameliorate it. We'll be looking for that. That would be great. But it's not necessary. It's very much exploratory. We think the ketamine challenge is probably the best way of being able to simulate the brain processes of a disease state before we can actually get to a patient.
Mm-hmm. When we see the ketamine challenge data, what are we looking for there? What do you want to see in a ketamine challenge?
I think the simple statements I said earlier are still true here. Getting into the brain, neuroactivity, that is on mechanism. We have established translational biomarkers in animals on EEG, so I would really like to repeat that too. In addition to that, there are biomarkers. It is a multidimensional battery of electrophysiology that we are conducting right now that give us a read-through to how KCC2 may have clinical effect. For example, there are biomarkers that we did not create, by the way. These are well-codified in science and the literature.
We are not innovating new here. We are just trying to ask the questions earlier in development to learn and make smart decisions. But for example, if you or I had some of the brain patterns of someone who has schizophrenia at rest, there are certain tests that we can run, and we can see variances in the basically electrophysiology in the brain compared to potentially you or I. For example, there is different auditory and visual stimuli tests, where if you hear a beep, beep, and then all of a sudden there is a beep that is very out of order. If I am looking into your brain on electrophysiology, your brain recognizes that, and I will see different patterns.
Okay.
Whereas someone who may have acute schizophrenia, they are not going to be able to notice that, and you see that on their electrophysiology. We can essentially replicate the state, again, of a disease-conditioned brain using ketamine and then try to rescue it with OV4071. And we are doing that with five or six very instructive biomarkers, and they have direct read-through then to not just only processing neural synchrony cognition, but it can help us make choices about, again, indication selection and endpoint design for the phase II study. Because psychiatry and translating into psychiatry is a daunting field, so the more that we can ask and learn early, the better.
Mm-hmm. Before we move on to talking about epilepsy, can you remind us of the timelines here for KCC2? When are we going to see data?
Soon. We're in the playoffs. In terms of OV4071, which is the first-ever oral KCC2 activator, we are in the phase I study right now. The molecule has great safety margins, so might take us a little while because if this is even a fraction of what it looks like in animals, we are going to fully characterize this. I expect that to be reading out early next year. We will have an elderly cohort because we think this may be a really exciting mechanism for neurodegenerative forms of psychoses. The ketamine challenge will run concurrent. This is a super potent molecule, so we expect to be in a range reasonably soon where we should have pharmacodynamic activity associated with all those studies that you heard me run. Ketamine challenge likely to read out also early next year. That doesn't even include all of our epilepsy programs, obviously. Soon.
Cool.
Yeah.
Let's talk about epilepsy.
Yeah.
Starting with focal seizures, a kind of hot investor debate is the world doesn't need another ASM.
Yeah.
Tell us why you disagree with this.
Whoever is asking that hasn't asked a patient recently, unfortunately. I would love to see epilepsy cured, and I don't see that happening in the next 10- 15 years. There's a lot of smart people around this room that know epilepsy quite well, so you can ask them too. But in terms of why another ASM is needed, anyone who does diligence on this field will know that unfortunately today there's roughly 30% of people who have seizures who continue to have breakthrough seizures despite really good drugs and other good drugs that are coming from our peers and friends in the space. The unfortunate thing is, even with better drugs coming to the fore, which is great for patients, we still find resistance, we still find drug cocktails where patients can't tolerate them in polypharmacy regimens. These are bad diseases.
These are people who can't drive. They're worried about seizing, taking a shower. They can't hold their children. It's bad, and it's still a number of people. What's needed in this field, and what still doesn't exist today, despite all the advances that we've made, is seizure drugs that work really well, that are safe and well-tolerated, that can play well in polypharmacy regimens, and that offer something different from all the seizure drugs that we've had to date and are also easy to use ideally. OV329 is all those things. This is a validated mechanism. It's just that the first-generation drug had a unique compound-specific toxicity.
We believe that we've de-risked that sufficiently at this point, and it should be a safe drug, and we have a therapeutic index where the first-generation drug didn't. It's a validated mechanism for seizures and the indications that we're going into. People just don't use it today because the first-generation drug was like many drugs 40 years ago. It worked, but it came with a lot of baggage associated with it. No titration, no DDIs. It will be the only drug in focal-onset seizures with this mechanism. So even if you make wildly conservative assumptions about where OV329 plays, like less than 10% penetration, for example, of the focal-onset seizure treatment-resistant market.
It's still more than a billion-dollar opportunity for that indication alone before you even start talking about the developmental and epileptic encephalopathies where we're pursuing and that it's also validated within.
Do you think that the TAM for focal seizures has been held back by the shortcomings of existing ASMs?
I think the challenge is honestly more broadly that we just haven't developed a seizure medicine to date that's that holy grail of efficacy, safety, tolerability.
ease of use.
Mm-hmm. You have an open-label photo paroxysmal response POC study ongoing.
Yeah.
The data is coming at year-end. How meaningful is the data here for your view of OV329's potential?
I think it's meaningfully conviction-building and de-risking. What it's not is the same thing as a randomized placebo-controlled phase II proof of concept study, which is why we're also running that. But taking a step back, this time last year, we read out data on this asset, OV329, and we were able to unequivocally show that we were delivering inhibition in the brain that was commensurate with basically therapeutic doses of known anti-seizure medicines.
That's pretty good, but that's in a healthy human. That's again, people like you and me. While we're asking and answering the question the right way for the phase II program about how good of an anticonvulsant is this really, for a couple million dollars and a reasonable amount of time in patients who have a type of reflexive epilepsy where they have seizures when exposed to certain light stimuli, we can confirm at the doses that we want to take into our pivotal studies, are we seeing an amelioration of subclinical seizures. So it's one more insurance policy. It's one more de-risking step, while we're answering the question in the phase II study the right way. I think that's helpful. One, it gives us confidence about the doses we have in a patient, which we haven't been able to do yet.
It's a very modest allocation of resources. Let's say, on the flip side, on one side, we see everything we want to see. Great. Gives me confidence about the phase II study that we're running and the design and the dose approach that we have. If we saw something unexpected, gives me time while my phase II is still in flight to modify it. To potentially, if I need to, adjust powering assumptions, if we think differently about doses. We have the ability to do that, and that's what this photosensitivity study allows me to do. We're taking not just the clinical dose that we're planning for a phase II in, but also the doses below and above it, right?
We can confirm the decisions and that all the data has led us to to date, which is frankly very significant and pretty reassuring unto itself. But this is a modestly de-risking step on the way.
Yeah. What do you want to see there in terms of the suppression of seizures? Is it reasonable to compare OV329 to other anti-seizure medications in this setting?
This is a good translational sort of human assay in the sense that it gives you confirmation that you're having an anticonvulsant effect.
It doesn't tell you, is my drug going to reduce seizures to the same degree as my colleagues at Xenon's or Praxis development programs does? It can't do that. But if you go back and you look at the literature and essentially the pioneers of this translational study, they've characterized a number of different seizure mechanisms on these photosensitivity studies. And what you can tell from these studies is that if you're having a partial or a complete response on these photosensitivity assays, that historically has translated well into an anticonvulsant drug in the real world. And I'm not saying this because it's Meg Alexander's opinion. There's good papers that have characterized many seizure mechanisms.
What we'd like to see is a partial or complete response at the doses, and most particularly the doses that we're planning to run in our pivotals.
Yeah.
And our phase II study is a registrational quality study.
Again, it helps me make sure that the capital and the resources we're deploying there is focused on getting the answer right and coming out with-
Yeah
a true answer on the anticonvulsant efficacy.
Cool. We're going to see the phase II-A data next year, and you're testing two different doses there, the five and the seven.
We're doing one. We're doing seven.
One. Oh, sorry. You're doing the seven. You've got the higher dose in the photosensitivity study. Why did you pick the seven, not the nine? Because it looked like you didn't see any-
Yeah
talks at the nine and the MAD either.
Yeah, I'll try to keep it short.
Yeah.
But in essence, the seven really maxed out our pharmacology strategy for the level of drug exposure in the plasma that we wanted to see to have optimal pharmacodynamic effect of reducing the seizures.
Yeah.
And we also know that we get essentially all humans from our characterization to date in a level of drug exposure in the plasma that they should have a response.
Yeah.
That really is the optimal dose for pushing the pharmacology strategy without running into a world where we are concerned about tolerability.
Yeah.
That is in part why we are going with the seven. We are also taking seven into the phase II study because, for those of you who know epilepsy well, you know it is a busy field and there is many pivotal studies running in focal-onset seizures. We have conviction in the 7-mg dose for the phase II. We want to run the study operationally well to enroll the right patients,
Yeah
but to also do so in a timely fashion, and that is the dose that we have conviction in. With that said, I also have the insurance policy and the photosensitivity that we are running the five, seven, nine. If I saw something unexpected, and it would be very unexpected, we could always modify the phase II at that point. It would take a little bit longer to get it done, but it would help ensure that we come out with the right answer for the phase II proof of concept.
Okay, cool. You announced earlier this year that you are also expanding into pediatric epilepsies, tuberous sclerosis complex, and infantile spasms, which was a really exciting update that you had. Tell us why a GABA-AT inhibitor makes sense in these indications. A better GABA-AT inhibitor.
Yes. A couple areas where focal-onset seizures is competitively dense, yet there is still a lot of unmet need. These particular developmental and epileptic encephalopathies, these are very acute pediatric epilepsies. There has been reasonably good meta-analyses that have been done about looking at different anti-seizure mechanisms in these pediatric epilepsies. Other mechanisms just have not performed well. There is literally a dearth in development in these indications. Where focal-onset seizures, I need to think about our peers and good friends at Praxis and Rapport, and until recently, Xenon, who are having to enroll trials competitively around the world. In the developmental and epileptic encephalopathies that we are looking at, this is a validated mechanism, GABA aminotransferase inhibition, and unfortunately, it is completely empty space for these patient and clinician communities. There are very few drugs in development.
I am particularly excited by this because when I talk to the pediatricians and the moms and dads, there are very few drugs that work here. We knew the first-generation drug worked, but it is undertreated because parents and the doctors who treat these kids have this terrible Damocles sword sort of hanging over their head because you want to stop the seizures so that it does not become lifelong neurodevelopmental challenges and more seizures. But you are worried about making your child blind because that was the unique toxicity that was compound specific to that first-generation drug. What happens is the docs will prescribe that drug for a period of time, but they take it off early, and a lot of time, the seizures return.
Yep.
The opportunity with our medicine, I believe, is that we will be able to be used earlier in the treatment paradigm. It is a validated mechanism, so if we are at the right dose, it should work. They may be able to treat these babies and these children longer, thereby starting to bend the curve on some of the developmental outcomes. These communities are quite desperate for it, and we are going to those because it is the most direct shot on goal. We know this is a validated mechanism. The way OV329 works is a very simple method. It basically is allowing you to have more ambient levels of GABA around your synapse and spilling out into the extrasynaptic region.
What that means is while we are starting here, because it is proven, there is no reason why it may not have therapeutic utility in other DEEs. We are starting here now, but I think there is potentially the opportunity for this to be a medicine for several other DEEs as well. Because it is a very different formulation from what we use in adults, these are developing babies and children. They need an entirely different means of weight-based dosing. It's not interchangeable. I believe that OV329, for these very specific pediatric epilepsies, has a lot of opportunity, as does the formulation that we have for focal-onset seizures in adults.
Mm-hmm. I guess on that difference, is that going to give you the option to have rare orphan pricing in the rare pediatric epilepsies, given that the size of these indications is similar to Dravet and LGS?
Yes.
Okay.
I believe so. That's been a big part of our thinking, both how do we develop a formulation that meets these children's developmental needs first and foremost.
Yeah.
But also in so doing, there are several things that we are doing so that they are not interchangeable.
And this formulation, is it a powder? And then what is the sort of CMC work required to getting that into patients?
Granule and sachet
Okay
is what we are using there. And it has been ongoing. We announced this program earlier this year, and it was backed at the time by Point72, which is now Sirenia, who believed in this approach, as did we. We had been thinking about it for a couple of quarters, and they said, "Have you thought about this?" And we said, "Yes, actually, so let us do it." We had been doing the work for some time, looking at different formulation feasibility. We are actually launching the TSC study before the end of this year.
Okay. Cool. Quickly before we finish up, two things. One, this recent transaction with the Perceptive-backed entity, could you quickly walk us through the mechanics there and any economic impact for Ovid, and then your cash balance?
Sure. I can tell you what we have disclosed to date.
Yeah.
I think Perceptive will probably have more to share in the not too distant future. Soticlestat was a drug where we had 50% rights, and we co-developed with a pharmaceutical company called Takeda through phase II, at which point, the management prior to me sold that back to Takeda for various corporate strategy reasons at the time. Takeda did not take that asset forward after mixed trial results. One arguably failed trial, one trial that probably was effective, but off by a patient or two. Perceptive always believed in this drug and this mechanism.
Yeah.
I've personally looked at the data for every subject of the trial. I believe it's a drug. Perceptive had the wherewithal to pull it out of Takeda and say, "We want to take the regulatory risk based on the data that exists to see can we get it over the fence, or if we need to, we'll run another trial." I think it's in good hands. The team at Perceptive knows this particular mechanism and has followed it for a long time. What does that mean for Ovid? Look, we don't count on it. I think mostly I believe it's a medicine that can help patients.
Yeah.
I'm excited to see that happen. Financially, it's all upside for us. We obviously have royalties. I don't think we've disclosed a lot of details about those, but it's a good thing for patients, and it's a good thing for the company if they're able to get it across the line.
Great. Thank you so much, Meg.
Thanks, Imogen.