Benzinga | Jan 3, 2022 06:36AM EST

Ovid Therapeutics Pays AstraZeneca $5M Cash and 7.5M Shares of Stock for a Library of Early-Stage Small Molecules Targeting the KCC2 Transporter

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 percent 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.

"Ovid's focus in neuroscience and experience in developing novel anti-epileptics make it an optimal choice to advance KCC2 activators, including OV350," noted Iain Chessell, Global Head of Neuroscience, BioPharmaceuticals R&D, AstraZeneca. "This transaction continues to align development resources to our stated areas of strategic focus."

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.1,2

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.