RARE Daily

Ligand Acquires Royalty Stake in Ovid’s Experimental Rare Disease Candidate Soticlestat

October 18, 2023

Rare Daily Staff

Ligand Pharmaceuticals has acquired a 13 percent portion of the royalties and milestones owed to Ovid Ovid Therapeutics related to the potential approval and commercialization of soticlestat.

In return, Ovid will receive a $30 million payment, less certain reimbursable expenses, which will extend its cash runway into 2026.

“Ligand conducted an extensive review of the comprehensive scientific and development program supporting soticlestat, and together, we structured a creative and customized transaction that enables both parties to benefit in soticlestat’s expected future success while simultaneously enabling Ovid to propel our current pipeline of potential first-in-class or best-in-class neurological and anti-seizure medicines,” said Jeffrey Rona, chief business and financial officer of Ovid.

Prior to the transaction with Ligand, Ovid’s cash runway was expected to last into 2025, during which time five clinical and regulatory milestones are anticipated for its pipeline programs. With this additional, non-dilutive capital infusion from Ligand, Ovid anticipates that its cash runway is expected to last into 2026 and will enable the expansion of its clinical programs.

Soticlestat is a potent, highly selective, first-in-class inhibitor of the enzyme cholesterol 24-hydroxylase (CH24H), with the potential to reduce seizure susceptibility and improve seizure control. It is currently being evaluated by Takeda in two, pivotal, randomized, placebo-controlled trials in Lennox-Gastaut syndrome and Dravet syndrome, developmental and epileptic encephalopathies that are part of a heterogeneous group of rare epilepsy syndromes. Dravet and Lennox-Gastaut syndrome typically become apparent during infancy or early childhood and are highly refractory to many anti-seizure medications.

“This transaction exemplifies our strategy of investing in differentiated programs and premier teams in therapeutic areas with high unmet need. Our strategy is to offer investors exposure to a diversified set of potential future revenue streams that are diligenced by our team of experts,” said Todd Davis, CEO of Ligand. “Financially, Ligand’s investment in soticlestat when added to our portfolio, and coupled with our stated aim to pursue many future deals like this, offer Ligand investors the potential for high margin growth for years to come.”

Ovid sold its rights in soticlestat to Takeda in 2021 and received an upfront payment of $196 million. Under that agreement, Ovid is eligible to receive regulatory and commercial milestone payments of up to $660 million, as well as tiered royalties on global net sales of soticlestat at percentages ranging from the low double-digits up to 20 percent, if soticlestat is approved and successfully commercialized. Takeda is currently studying soticlestat in two pivotal phase 3 trials for people with Lennox-Gastaut syndrome and Dravet syndrome and announced that it anticipates regulatory filings for soticlestat in its fiscal year 2024. Ovid has no ongoing obligations or costs associated with the development of soticlestat.

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