Takeda to pay Ovid $196M for full rights to Phase 3-ready epilepsy drug
When Takeda Pharmaceutical and Ovid Therapeutics began working together four years ago, the partners aimed to share in the development of a drug with the potential to treat rare forms of epilepsy. The partners are ending the alliance, but Takeda leaves with full rights to a Phase 3 ready compound while Ovid gains $196 million to support its own pipeline of neurological disease drugs.
Under terms of a new agreement announced Wednesday, Takeda assumes responsibility for further clinical development and potential commercialization of the drug, soticlestat. Ovid stands to earn up to $660 million in milestone payments. If Tokyo-based Takeda succeeds in bringing the drug to the market, it will owe its former partner royalties from sales.
The transaction is a homecoming for soticlestat, a small molecule that was originally discovered in Takeda’s labs. In 2017, Takeda licensed the drug to Ovid but arranged to remain part of the drug’s future. The agreement called for both companies to share equally in research and development expenses. If the drug reached the market, the partners agreed to split the profits equally.
Ovid tested soticlestat in Dravet syndrome and Lennox-Gastaut syndrome, two rare forms of epilepsy. The drug is designed to block 24 hydroxylate (24HC), an enzyme found only in the brain. Elevated levels of this enzyme have been linked to activation of NMDA receptors, which play a role in epilepsy. By blocking the key enzyme, soticlestat is intended to reduce signaling from NMDA receptors.
In 2020, Ovid reported Phase 2 results showing that the drug met the main study goal of reducing seizure frequency in children who have Dravet or Lennox-Gastaut. Last September, the company reported additional clinical data in CDKL5 deficiency disorder and 15q duplication syndrome, two other rare forms of epilepsy. The study was small and not designed to show statistical significance. But the results provided additional validation for the compound’s approach to treating seizures.
Full control of soticlestat gives Takeda the opportunity to compete against other drugs that have reached the market for Dravet and Lennox-Gastaut. Cannabis-derived drug Epidiolex won FDA approval in 2018. Last month, Jazz Pharmaceuticals announced a $7.2 billion deal to acquire that drug’s maker, GW Pharmaceuticals. Last year, Zogenix won FDA approval for Fintepla, a drug developed to treat Dravet.
The new agreement between Takeda and Ovid gives the small biotech an opportunity to recover from the failure of OV101, a drug candidate for Angelman syndrome, a rare inherited disorder that leads to developmental delays and cognitive difficulties. Last December, Ovid reported that the drug did not meet the main goal of a Phase 3 study.
Ovid plans to move on to other drugs. Speaking on a conference call, CEO Jeremy Levin said that the upfront payment alone represents four times what his company spent on soticlestat’s development since beginning the collaboration. That payment, and plus the milestone payments tied to the compound’s progress, provide Ovid with the capital to support its drug pipeline, which Levin said has three compounds for rare neurological disorders on track to begin clinical testing in the next three years, starting in the first half of 2022. One of those compounds, OV882, is another potential Angelman treatment.
Levin said that Ovid has learned a great deal from its neuroscience drug research to date, and the company will apply that knowledge to its current drug candidates and potential new assets. Levin left the door open for another deal like the one Ovid initially reached with Takeda in 2017.
“We’re really interested in novel, first in class, genetically focused mechanisms,” Levin said. “Some of these are obviously in smaller biotechs, private companies. Others of them actually are in larger pharmaceutical companies. One of the struggles that these companies have is that they have these interesting constructs. They’re able to drive the early research but what they can’t do is understand how to translate that into a product that you can develop—and we really understand that.”
Takeda and Ovid expect the new agreement will close by the end of this month.
Public domain photo by Flickr user affen ajlfe