Leerink bullish on Ovid Therapeutics, initiates with an Outperform

As previously reported, Leerink analyst Marc Goodman initiated coverage of Ovid Therapeutics (OVID) with an Outperform rating and $5 price target The firm notes OV329 is a second-gen GABA-AT inhibitor with greater potency and potentially improved safety, including the lack of retinal toxicity compared with the first-gen GABA-AT inhibitor. Leerink likes the epilepsy market; the FDA wants to approve new drugs, payer pushback is relatively low since patients are refractive to many AEDs, polypharmacy is the norm, so this is not a zero-sum game, and importantly physicians like to try new therapies. The firm believe the KCC2 portfolio represents an interesting opportunity targeting a novel mechanism with strong biological validation, as genetic and preclinical evidence links KCC2 dysregulation to developmental and neuropsychiatric disorders.