Ovid Therapeutics (OVID) risk factors, FY2024 10-K

Other

1. 01Summary of Select Risks Associated with Our Business
2. 02condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock

Risks Related to Our Financial Position and Need for Additional Capital

1. 03We will require additional capital to finance our operations, which may not be available on acceptable terms, if at all. Failure to obtain this necessary capital when needed will force us to delay, limit or terminate certain of our drug development efforts or other operations
2. 04We expect to continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability
3. 05Even if we complete the development and regulatory processes described above, we anticipate incurring significant costs associated with launching and commercializing our current and future drug candidates
4. 06Our operating history may make it difficult to evaluate the success of our business to date and to assess our future viability
5. 07Our business could be adversely affected by economic downturns, changes in inflation and interest rates, changes in trade policy, natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which may in the future negatively impact our business and financial performance
6. 08Our ability to raise capital may be limited by applicable laws and regulations
7. 09We may sell additional equity or debt securities or enter into other arrangements to fund our operations, which may result in dilution to our stockholders and impose restrictions or limitations on our business
8. 10Sales of a substantial number of shares of our common stock in the public market could cause the market price of our common stock to drop significantly

Risks Related to the Development and Commercialization of Our Drug Candidates

1. 11We are early in our drug development efforts. If we are unable to successfully develop, receive regulatory approval for and commercialize our drug candidates, or successfully develop any other drug candidates, or experience significant delays in doing so, our business will be harmed
2. 12Because the results of preclinical studies or earlier clinical trials are not necessarily predictive of future results, our drug candidates may not have favorable results in planned or future preclinical studies or clinical trials, or may not receive regulatory approval
3. 13Interim topline and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures, which could result in material changes in the final data
4. 14Our drug development costs will also increase if we experience delays in testing or obtaining marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, need to be restructured or be completed on schedule, if at all
5. 15If we are not successful in discovering, developing and commercializing additional drug candidates, our ability to expand our business and achieve our strategic objectives would be impaired
6. 16Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control
7. 17Our drug candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial potential or result in significant negative consequences following any potential marketing approval
8. 18Any of these events could prevent us from achieving or maintaining market acceptance of our drug candidates and could significantly harm our business, prospects, financial condition and results of operations
9. 19We face substantial competition, which may result in others developing or commercializing drugs before or more successfully than us
10. 20private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization
11. 21Even if our current or future drug candidates receive marketing approval, they may fail to achieve market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success
12. 22Even if we obtain and maintain approval for our current or future drug candidates from the FDA, we may never obtain approval for our current or future drug candidates outside of the United States, which would limit our market opportunities and could harm our business
13. 23If we seek approval to commercialize our current or future drug candidates outside of the United States, a variety of risks associated with international operations could harm our business
14. 24Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any drug candidate that we may develop

Risks Related to Licensing and Collaboration Arrangements

1. 25We may be required to relinquish important rights to and control over the development and commercialization of our drug candidates to any future collaborators
2. 26If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks
3. 27We may explore additional strategic collaborations that may never materialize or may fail
4. 28uncertainties associated with establishing them, and we cannot predict the success of any collaborations that we enter into. We may enter into strategic collaborations that we subsequently no longer wish to pursue

Risks Related to Regulatory Compliance

1. 29Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws
2. 30Coverage and adequate reimbursement may not be available for our current or any future drug candidates, which could make it difficult for us to sell profitably, if approved
3. 31Healthcare legislative reform measures may have a negative impact on our business and results of operations
4. 32We may not be able to obtain or maintain orphan drug designations or exclusivity for our drug candidates, which could limit the potential profitability of our drug candidates
5. 33Even if we obtain regulatory approval for our current or future drug candidates, they will remain subject to ongoing regulatory oversight

Risks Related to Our Intellectual Property

1. 34If we are unable to obtain and maintain patent protection for our current or any future drug candidates, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets
2. 35Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
3. 36Patent terms may be inadequate to protect our competitive position on our drug candidates for an adequate amount of time
4. 37Intellectual property rights do not necessarily address all potential threats to our business
5. 38Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a negative impact on the success of our business
6. 39We may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property
7. 40We may be involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time consuming and unsuccessful
8. 41Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our current and any future drug candidates
9. 42We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business
10. 43Reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed

Risks Related to Our Dependence on Third Parties

1. 44We do not have our own manufacturing capabilities and will rely on third parties to produce clinical and commercial supplies of our current and any future drug candidates
2. 45We do not own or operate, and we do not expect to own or operate, facilities for drug manufacturing, drug formulation, storage and distribution or testing. We have been in the past, and will continue to be, dependent on third parties to manufacture the clinical supplies of our drug candidates
3. 46considerably delay completion of our clinical trials, product testing and potential regulatory approval of our drug candidates
4. 47We intend to rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business

Risks Related to Our Business Operations, Employee Matters and Managing Growth

1. 48We are highly dependent on the services of our senior management team, including our Chairman and Chief Executive Officer, Dr. Jeremy Levin, and if we are not able to retain these members of our management team or recruit and retain additional management, clinical and scientific personnel, our business will be harmed
2. 49We may need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations
3. 50Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading
4. 51trials, claims that we breached our data protection obligations, harm to our reputation, and a loss of future customers or sales and other adverse consequences
5. 52failure to comply with such obligations could result in regulatory investigations or actions, litigation (including class actions), fines and penalties, disruptions of our business operations, loss of revenue or profits, reputational damage and other adverse business consequences
6. 53Our ability to use our net operating loss (“NOL”) carryforwards and certain other tax attributes to offset future taxable income may be subject to limitation

Risks Related to Being a Public Company

1. 54We are a “smaller reporting company” and the reduced disclosure requirements applicable to such companies may make our common stock less attractive to investors
2. 55our voting and non-voting ordinary shares held by non-affiliates is less than $700.0 million measured on the last business day of our most recently completed second fiscal quarter

Risks Related to the Ownership of Our Common Stock and Other General Matters

1. 56If we fail to satisfy all applicable requirements of Nasdaq and it determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease
2. 57The market price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for our common stock
3. 58There is no public market for our Series A convertible preferred stock
4. 59Stockholders will be diluted by any conversions of outstanding Series A convertible preferred stock and exercises of outstanding options
5. 60Based upon shares of our common stock outstanding as of December 31, 2024, our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock, in the aggregate, beneficially own shares representing approximately 50.1% of our outstanding common stock
6. 61If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline
7. 62Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be stockholders’ sole source of gain
8. 63Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
9. 64which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner
10. 65We may be subject to securities litigation, which is expensive and could divert management attention
11. 66Some provisions of our charter documents and the DGCL may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would benefit our stockholders and may prevent attempts by our stockholders to replace or remove our current management