Ovid Therapeutics announces significant workforce reduction to extend cash runway
Ovid Therapeutics Inc., a New York-based biopharmaceutical company, has announced a significant reduction in its workforce. This decision, approved by the Board of Directors on June 27, 2024, aims to extend the company’s cash runway by prioritizing its key programs in the development of treatments for epilepsies and brain conditions. The reduction involves 17 employees, which constitutes approximately 43% of the current workforce, effective from July 11, 2024.
The workforce reduction is part of a broader strategy to preserve cash resources amidst ongoing financial pressures. All affected employees will receive severance payments and continued group health insurance coverage for a specified period post-termination, contingent upon the execution of a general release of claims against the company. This initiative is expected to incur a one-time severance-related charge of approximately $4.0 million, covering severance payments, benefits, and related costs.
As part of the workforce reduction, two key executives, Thomas Perone and Jason Tardio, will also depart from their roles as the company’s General Counsel, Chief Compliance Officer, Corporate Secretary, and Chief Operating Officer, respectively. Both executives will receive severance benefits as outlined in their employment agreements, with arrangements in place for them to consult during the transition period.
Despite the reductions, Ovid Therapeutics Inc. remains committed to its mission of developing innovative treatments for neurological conditions. The company is actively advancing a pipeline of novel, targeted small molecule candidates. Among these, OV888 (GV101), a selective ROCK2 inhibitor, is being developed for lesions associated with cerebral cavernous malformations and other brain disorders. Additionally, OV329, a GABA-aminotransferase inhibitor, is targeted at treatment-resistant seizures, and OV350, a direct activator of the KCC2 transporter, is aimed at treating epilepsies and psychiatric conditions.
Ovid Therapeutics anticipates that the cost savings from the workforce reduction will provide sufficient funding to sustain operations into the first half of 2026. This projection reflects the company’s strategic focus on maintaining a robust pipeline while ensuring financial stability.
The decision by Ovid Therapeutics to reduce its workforce, while difficult, is a necessary measure in the context of the current economic environment faced by many in the biopharmaceutical industry. By focusing resources on its most promising programs, Ovid aims to maximize the impact of its research and development efforts. This move could potentially accelerate the path to market for their innovative therapies, benefiting patients with severe neurological conditions in the long run.
Ovid Therapeutics Inc.’s recent workforce reduction underscores the challenges and strategic decisions faced by biopharmaceutical companies in maintaining financial health while continuing to innovate. As the company moves forward, the focus remains on advancing therapies that could significantly improve the quality of life for people with complex neurological diseases.