Reported Earlier: Ovid Therapeutics Has Entered Into A Securities Purchase Agreement For A Private Investment In Public Equity Financing That Is Expected To Result In Gross Proceeds Of Up To $175M To Advance Brain Disease Therapies

Author: Benzinga Newsdesk | October 03, 2025 10:47am

Ovid Therapeutics Inc. (NASDAQ:OVID), a biopharmaceutical company dedicated to developing small molecule medicines for brain conditions with significant unmet need, today announced that it has entered into a securities purchase agreement for a private investment in public equity ("PIPE") financing that is expected to result in gross proceeds of up to $175 million to the Company, including initial gross proceeds of approximately $81 million, in each case before placement agent fees and offering expenses. The PIPE financing is expected to close on or about October 6, 2025, subject to satisfaction of customary closing conditions.

The PIPE financing included participation from new investors Janus Henderson Investors, RA Capital Management, Eventide Asset Management, Coastlands Capital, Blue Owl Healthcare Opportunities, Balyasny Asset Management, Saturn V Capital and Ally Bridge Group, alongside existing investors including ADAR1 Capital Management and Affinity Healthcare Fund, LP, as well as new and existing large investment management firms.

Pursuant to the terms of the securities purchase agreement, the Company is selling an aggregate of (i) 57,722 shares of its Series B non-voting convertible preferred stock (the "Series B Preferred Stock"), (ii) Series A warrants (the "Series A Warrants") to purchase 38,481,325 shares of its common stock and/or pre-funded warrants (the "Pre-Funded Warrants") and (iii) Series B warrants to purchase 28,861,000 shares of its common stock and/or Pre-Funded Warrants (the "Series B Warrants"). Each share of Series B Preferred Stock is being sold together with a Series A Warrant to purchase 666.66 shares of common stock and/or Pre-Funded Warrants (rounded down to next whole share based on each investor's aggregate purchase) and a Series B Warrant to purchase 500 shares of common stock and/or Pre-Funded Warrants, referred to collectively as a "Security." The Security will be sold at a purchase price of $1,400.00 per Security. The Series A Warrants and Series B Warrants will each have an exercise price of $1.40 per share.

The shares of Series B Preferred Stock are convertible into an aggregate of 57,722,000 shares of the Company's common stock, with each share of Series B Preferred Stock being convertible into 1,000 shares of common stock, subject to the approval of the Company's stockholders and certain beneficial ownership limitations set by each holder.

The Series A Warrants will be exercisable following receipt of approval by the Company's stockholders and will terminate upon the earlier of (a) the 30th calendar day following the date on which the Company publicly announces the clearance of the first of any investigational new drug application, clinical trial application or other foreign equivalent with respect to the clinical development of the Company's OV4071 product candidate and (b) October 6, 2030. The Series B Warrants will be exercisable following receipt of Ovid stockholder approval and will terminate on October 6, 2030, subject to the mandatory exercise requirement, which requires the holder to exercise of Series A Warrants upon achievement of certain stock trading prices of the Company's common stock. Subject to the satisfaction of the applicable conditions precedent and assuming the exercise of all the Series A Warrants and Series B Warrants for cash, the Company will receive aggregate gross proceeds of $94.3 million. Assuming the satisfaction of the applicable conditions precedent, the conversion of all shares of Series B Preferred Stock and the exercise of all of the Series A Warrants and Series B Warrants for cash, the Company will issue an aggregate of 125,064,325 shares of its common stock in connection with the PIPE financing.

The Company intends to use the net proceeds from the initial closing of the PIPE financing, together with the Company's existing cash, cash equivalents and marketable securities, to provide financing for research and development, general corporate expenses, and working capital needs. The Company expects that its cash will fund its operating plan into 2028.

TD Cowen, Leerink Partners and Oppenheimer & Co. are acting as joint placement agents for the PIPE financing.

Posted In: OVID