Ovid Therapeutics is a buy, this analyst says

Roth Capital Markets analyst Boobalan Pachaiyappan reiterated a “Buy” rating and a 12-month price target of $3.00 on Ovid Therapeutics (Ovid Therapeutics Stock Quote, Chart, News, Analysts, Financials NASDAQ:OVID) following encouraging Phase 1 data from the company’s OV350 program and updated discussions with management on next steps for its KCC2 platform.

Pachaiyappan said results from the Phase 1 single ascending dose study in healthy volunteers, evaluating 50 mg and 100 mg intravenous doses of OV350, demonstrated that the agent was generally safe and tolerable. A subset of participants experienced nausea and vomiting, which management attributed to possible excessive activation of the CCK1 receptor pathway, but no QTc prolongation, clinically meaningful laboratory abnormalities or vital sign concerns were observed.

As outlined in Roth’s initiation report, Pachaiyappan emphasized that OV350 is not being advanced as a development candidate, but rather as a “tool” molecule intended to generate critical safety, tolerability and pharmacokinetic insights applicable across Ovid’s broader KCC2 program.

In the wake of the data, Roth spoke with chief executive officer Meg Alexander, who reiterated the company’s intention to initiate Phase 1 clinical studies of OV4071, a next-generation oral KCC2 activator that management says is approximately 20 times more potent than OV350. Pachaiyappan said advancing OV4071 represents a logical strategic step given the platform-like nature of the KCC2 program and its potential applicability across multiple neurological and neuropsychiatric indications. Phase 1 studies of OV4071 are expected to begin in the first quarter of 2026.

Roth values Ovid Therapeutics using a discounted cash flow methodology, applying a 12% discount rate and a 1% terminal decline rate, which yields an implied equity value of approximately $365-million. The valuation assumes a 35% probability of approval for OV329 in focal onset seizures in both U.S. and ex-U.S. markets, with no contribution from other indications or regions at this time.

While Pachaiyappan said the firm is intrigued by the “pipeline-in-a-program” potential of KCC2 activators, which could ultimately reshape treatment approaches in conditions such as schizophrenia and psychosis associated with Parkinson’s disease and Lewy body dementia, Roth has not yet assigned incremental value to the KCC2 platform pending additional clinical clarity.

Ovid Therapeutics is a New York-based biopharmaceutical company focused on developing new medicines for brain disorders and rare neurological diseases.

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