On Monday, B.Riley adjusted its stance on Ovid Therapeutics Inc (NASDAQ:OVID), a biopharmaceutical company, by reducing its price target to $3.00 from the previous $9.00. Despite this change, the firm retained a Buy rating on the company's stock. The revision of the price target was attributed to Ovid's limited cash reserves, which are expected to last into the first half of 2026, and the exclusion of anticipated revenue from soticlestat milestones and royalties in their valuation.
The company's financial runway and valuation adjustments reflect a cautious but still optimistic outlook by B.Riley. Ovid Therapeutics has been focusing on developing medicines for rare neurological disorders, and the firm's continued Buy rating suggests a belief in the company's potential. The analyst from B.Riley highlighted the "asymmetric risk/reward profile to the upside" which indicates a view that the potential gains for the stock may outweigh the risks.
Ovid Therapeutics' upcoming catalysts for its drug candidates OV329 and OV888 are seen as key drivers for the company's future performance. These developments are eagerly anticipated by investors and could provide significant momentum for the stock if they prove to be positive.
The adjustment in the price target comes as Ovid Therapeutics navigates the challenges of drug development and seeks to secure its financial position. The company's efforts in advancing its pipeline are critical to its success and are closely watched by industry observers and investors alike.
In conclusion, B.Riley's revised price target for Ovid Therapeutics reflects a balance between the current financial constraints and the potential for future growth driven by its drug development pipeline. The firm's maintained Buy rating suggests confidence in the company's strategic direction and upcoming milestones.
In other recent news, Takeda Pharmaceutical Company (NYSE:TAK) Limited and Ovid Therapeutics Inc. reported mixed results from their Phase 3 clinical trials for soticlestat, a treatment for two rare forms of epilepsy.
The SKYLINE study narrowly missed its primary endpoint, while the SKYWAY study did not meet its primary goal. Despite these outcomes, soticlestat maintained a consistent safety and tolerability profile. Ovid Therapeutics, independent of soticlestat's outcomes, is advancing its pipeline with financial discipline, including clinical programs OV888 and OV329, and preclinical program OV350.
In the financial sphere, Ovid reported earnings per share (EPS) of ($0.17), surpassing the anticipated ($0.24) and ($0.22) projected by Oppenheimer and consensus estimates, respectively. Analyst firm BTIG maintained a Buy rating for Ovid Therapeutics, highlighting the unique characteristic of its molecules that do not directly bind to GABA receptors. Concurrently, Oppenheimer reiterated an Outperform rating, following Ovid's first-quarter 2024 financial results and progress in developing its pipeline.
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