This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of this Annual Report on Form 10-K. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” or the negative or plural of those terms, and similar expressions.

Forward-looking statements include, but are not limited to, statements about:

statements regarding the impact of the COVID-19 pandemic and its effects on our operations, access to capital, research and development and clinical trials and potential disruption in the operations and business of third-party manufacturers, contract research organizations, or CROs, other service providers, and collaborators with whom we conduct business;

~~our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;~~

•our ability to identify additional novel compounds with significant commercial potential to acquire or in-license;

•our ability to successfully acquire or in-license additional drug candidates on reasonable terms;

•our estimates regarding expenses, future revenue, including any royalty or milestone payments, capital requirements and needs for additional financing;

•our ability to obtain regulatory approval of our current and future drug candidates;

Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1A, “Risk Factors,” herein and for the reasons described elsewhere in this Annual Report on Form 10-K. Any forward-looking statement in this Annual Report on Form 10-K reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs and consumer products, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources and

In this Annual Report on Form 10-K, unless otherwise stated or as the context otherwise requires, references to “Ovid,” “the Company,” “we,” “us,” “our” and similar references refer to Ovid Therapeutics Inc. and its wholly owned ~~subsidiaries.~~subsidiary. This Annual Report on Form 10-K also contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to, including logos, artwork and other visual displays, may appear without the ® or TM™ symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under

ii

applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

~~Summary of Selected Risks Associated with Our Business~~

~~Our business is subject to numerous risks and uncertainties, including those discussed at length in the section titled “Risk Factors.” These risks include, among others, the following:~~

Collectively, these development programs are anticipated to create a range of value-creating milestones in the near- and mid-term for investors.

Although it is one of the earliest known maladies documented by humanity four millennia ago, epilepsy remains a common, and often intractable, medical diagnosis. Approximately 50 million people globally experience epilepsy, including an estimated three million adults living with epilepsy in the United States.

While modern drug discovery efforts have produced more than 30 ASMs over the last ~~few~~100 years, ~~and today represent~~ a substantial ~~opportunity medically~~number of epilepsy patients continue to experience breakthrough seizures that can cause enduring damage to the brain. Individuals who suffer from rare forms of refractory epilepsies may experience persistent seizure rates ranging from 50 - 90%. The seizures they suffer can have a devastating impact both upon patients and ~~commercially. Based on~~their families, by triggering permanent motor, cognitive and developmental delays, as well as epileptogenesis, which is a cascade of seizures begetting more seizures. Some patients with developmental epileptic encephalopathies experience even greater rates of refractory seizures that are resistant to drug therapy.

With an estimated 70% of epilepsy diagnoses occurring in people less than 20 years of age, the ~~rapid increase~~need to treat seizures early and effectively is critical to mitigate worsening and permanent later-life disabilities. In the search for seizure control, approximately half of patients take a polypharmacy regimen of five or more ASMs, requiring careful management of drug side effects and interactions. The large population of patients requiring multiple drug therapies to control seizures, and persistent rates of breakthrough seizures, signal the urgent need for effective new medicines. For these patients, new mechanisms of action that demonstrate improved efficacy, safety and tolerability profiles are optimal, as they may be more easily incorporated into existing treatment regimens without the fear of drug-to-drug interactions (“DDIs”).

Scientific progress, including the availability of genetic testing, improved radiographic scanning tools, and more accurate means of measuring non-seizure symptoms are illuminating the underpinning seizure disorders. The great unmet medical need and scientific advancements have set the stage for a potential era of neurotherapeutics, which we believe will be led by ASMs.

The science underlying the discovery and development of new drugs for the brain has changed fundamentally over the last decade. We believe that major developments in ~~scientific~~the understanding of the ~~role~~biology of ~~genetics~~these diseases means that key areas of unmet need, including many epilepsies and ~~key biological pathways relevant~~seizure disorders, are now addressable and offer significant medical potential. Our team has proven expertise in understanding MoAs that underlie seizures and shaping potential therapies to ~~diseases~~treat rare epilepsies and disorders with seizures. Specifically, we have built a pipeline focused on treating the extrinsic or intrinsic causes of neuronal hyperexcitability. This know-how affords us an ability to build Ovid in a manner focused on delivering successive, novel medicines for epilepsies and seizure-related neurological conditions.

Our strategy is to create sustainable, long-term value by advancing an exciting and differentiated pipeline of small molecules that culminates in a fully integrated neurotherapeutics company with multiple commercial medicines and clinical stage programs. Over time, we intend to seek to expand our current pipeline of predominantly ASMs to include additional franchises of neurology programs via focused clinical development and business development activities. This corporate strategy is underpinned by specific research and development, financial and business development strategies. In addition, our Company seeks to protect shareholder value by creating multiple sources of potential revenue via clinical and commercial milestones from our pipeline, strategic collaborations and partnerships.

Our approach to building an epilepsy franchise has already resulted in success, namely the ~~brain,~~development and subsequent repurchase of our rights to soticlestat by Takeda. In 2017, we ~~aim~~in-licensed a 50% stake in soticlestat for $26.0 million, and further invested $57.0 million in designing and executing soticlestat’s early and mid-stage clinical trials. In 2021, following encouraging Phase 2 findings, which we delivered six months ahead of schedule, we entered into a Royalty, License and Termination Agreement (“RLT Agreement”) through which we sold back our rights to ~~identify, discover~~soticlestat to Takeda. The RLT Agreement provided us with $196.0 million paid in Q1 2021 and, ~~develop novel compounds~~if soticlestat is approved and successfully commercialized, we are eligible to receive up to $660.0 million in sales and regulatory milestone payments and low double-digits up to 20% of potential net sales-based tiered royalty payments. The RLT Agreement provides us with a potential stream of non-dilutive capital. The funds received from this transaction have enabled us to invest in and secure what we believe is a world-leading pipeline during a period when we believe the cost of capital would have been unduly expensive. In 2023, we sold a 13% stake in the royalty, regulatory and commercial milestone payments that we are eligible to receive under the RLT Agreement to Ligand Pharmaceuticals Incorporated (“Ligand”) for $30.0 million.

Our near-term strategy is focused on building a franchise of potential small molecule medicines to treat certain epilepsies and conditions with seizure symptoms. In alignment with this focus, in 2023, we made the ~~treatment of rare neurological disorders.~~ decision to both out-

We have built a highly specialized, efficient, and focused infrastructure that supports us in our chosen area of neurotherapeutics development. This infrastructure spans the critical domains of research and development, commercial and market access strategy. Importantly, it positions us to be a potential partner of choice for leading biopharmaceutical companies who wish to pursue valuable drug candidates and research platforms in neurology.

Our cohesive focus in epilepsies and conditions with seizure symptoms, clear strategy reinforced by our professional experience and pipeline of differentiated assets, gives us confidence we can succeed in our mission.

As the field of ASM advances, we believe connections may be ~~efficacious in patients with a given genetic profile.~~

We take a scientifically driven approach to identify promising drug candidates for our pipeline. We are building our portfolio based on the existence of ~~clear~~known biological rationales ~~including a focus on disorders~~ that ~~have, where possible, a direct genetic linkage. We use our deep understanding of the area to identify mechanisms of action, appropriate~~are associated with targets, and ~~initial drug candidates.~~which can be evaluated using validated biomarkers and/or clear endpoints, for study in clinical trials. As we advance our drug candidates ~~into~~through nonclinical and ~~through the~~ clinical evaluation, we ~~are building on the~~apply a systematic approach for de-risking compounds using emerging ~~body of~~tools, animal models and trial designs. This paradigm is continuously informed and refined with emerging scientific and clinical insights ~~developed by us~~to strengthen and ~~others in the biopharmaceutical industry to target these important disease pathways of the brain. As we evaluate data from previous~~de-risk development for prospective programs and ~~ongoing preclinical studies and clinical trials, we intend to refine and improve our scientific approach and apply these insights to continue to build our pipeline and conduct our clinical~~ trials.

~~In particular,~~

The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA or BLA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements.

After evaluating the application and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical testing in order for the FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that particular contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Under the Orphan Drug Act of 1983, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the name of the sponsor, identity of the drug or biologic and its potential orphan use are disclosed publicly by the FDA. The orphan drug designation does not shorten the duration of the regulatory review or approval process, but does provide certain advantages, such as a waiver of PDUFA fees, enhanced access to FDA staff and potential waiver of pediatric research requirements.

If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA or BLA, or an abbreviated NDA ~~(ANDA)~~(“ANDA”) or Biosimilar application, to market a drug or biologic with the same active moiety for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. Orphan drug exclusivity does not prevent FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the application user fee. A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

~~Fast Track Designation~~

The FDA is required to facilitate the development and expedite the review of pharmaceutical products that are intended for the treatment of a serious or life-threatening condition for which there is no effective treatment, and which demonstrate the potential to address unmet medical needs for the condition. Under the fast-track program, the sponsor of a new drug candidate may request the FDA to designate the product for a specific indication as a fast-track product concurrent with or after the filing of the IND for the product candidate. The FDA must determine if the product candidate qualifies for fast-track designation within 60 days after receipt of the sponsor’s request.

In addition to other benefits, such as the ability to have more frequent interactions with the FDA, the agency may initiate review of sections of a fast-track product’s NDA or BLA before the application is complete. This rolling review is available if the applicant provides and the FDA approves a schedule for the submission of the remaining information and the applicant pays applicable user fees. However, the FDA’s PDUFA review period for a fast-track application does not begin until the last section of the application is submitted. In addition, the fast-track designation may be withdrawn by the FDA if the agency believes that the designation is no longer supported by data emerging in the clinical trial process.

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

The FDA may impose a number of post-approval requirements as a condition of approval of a marketing authorization. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of

post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

Sales of our drug candidates, if approved, will depend, in part, on the extent to which such products will be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly limiting coverage or reducing reimbursements for medical products and services. In addition, the U.S. government, state legislatures, and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Third-party payors decide which therapies they will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. Further, no uniform policy for coverage and reimbursement exists in the United States. Therefore, decisions regarding the extent of coverage and amount of reimbursement to be provided for any drug candidates that we develop will be made on a payor-by-payor basis. Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed. The position on a payor’s list of covered drugs, or formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. Decreases in third-party reimbursement for our drug candidates or a decision by a third-party payor to not cover our drug candidates could reduce physician usage of our drug candidates, once approved, and have a material adverse effect on our sales, results of operations and financial condition. Coverage policies and third-party payor reimbursement rates may change at any time. Therefore, even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future.

Because of our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors, we will also be subject to healthcare regulation and enforcement by the federal government and the ~~states~~state and foreign governments in which we will conduct our business, including our clinical research, proposed sales, marketing and educational programs. ~~Failure to comply with these laws, where applicable, can result in the imposition of significant civil, criminal, and administrative penalties.~~

In addition, many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. Additionally, to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws.

Failure to comply with these laws, where applicable, can result in the imposition of significant penalties, including civil, criminal, and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, imprisonment, and integrity oversight and reporting obligations.

Current and future legislative proposals to further reform healthcare or reduce healthcare costs may result in lower reimbursement for our products. The cost containment measures that payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could significantly reduce our revenues from the sale of our products.

In addition, other legislative changes have been proposed and adopted since the PPACA was enacted. In August 2011, then President Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals for spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government programs. This includes reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments, including the BBA, will remain in effect ~~through 2030~~until 2032 unless additional Congressional action is taken. ~~However, COVID-19 relief support legislation suspended the 2% Medicare sequester from May 1, 2020 through March 31, 2021.~~ Additionally, in January 2013, then President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Congress is also considering additional health reform measures.

We have equity incentive plans that are designed to attract, retain and motivate selected employees, consultants and directors through the granting of equity-based compensation awards and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

In addition, our governance is overseen by an independent and diverse Board of Directors who provide and complement our expertise to help oversee the strategy and performance of our Company. Among our Board of Directors, five out of six members are independent. Collectively, our Board of Directors provides insight and expertise in areas of importance to the performance and growth of our enterprise, including experience as: senior operators of public companies; financial, transactional and oversight experience at public companies; proven biopharmaceutical and neuroscience experience; research and regulatory acumen in drug development; and corporate governance.

We lease the space for our principal executive offices, which are located at ~~1460 Broadway,~~441 Ninth Avenue, 14th Floor, New York, New York. In June 2022, we formally instituted our hybrid work policies. In 2022, we executed what we believe was a smooth transition to a hybrid work environment while ensuring that ample resources, support and flexibility were available to our employees.

Our headquarter office facilities in New York, New York ~~on a monthly basis. We believe that our facilities are adequate to meet our current needs.~~

have received LEED Platinum certification.

We were incorporated in Delaware in April 2014. Our principal executive offices are located at ~~1460 Broadway, Suite 15021~~441 Ninth Avenue, 14th Floor, New York, New York ~~10036~~10001 and our telephone number is (646) 661-7661. Our corporate website address is www.ovidrx.com. Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only.

Our business faces significant risks ~~may~~and uncertainties. If any of the following risks are realized, our business, financial condition and results of operations could be ~~amplified by~~materially and adversely affected. Some of the ~~COVID-19 pandemic and its potential impact on Ovid’s business and~~more significant risks we face include the ~~global economy.~~

~~Risks Related to Our Financial Position and Need for Additional Capital~~

Wefollowing:

We have historically incurred significant operating losses. Our net loss was ~~$81.0~~$52.3 million for the year ended December 31, ~~2020.~~2023. As of December 31, ~~2020,~~2023, we had an accumulated deficit of ~~$294.2~~$277.9 million. We expect to continue to incur ~~significant expenses and~~ increasing operating losses for the foreseeable future. Since inception, we have devoted substantially all of our efforts to research and preclinical and clinical development of our drug candidates, as well as hiring employees and building our infrastructure.

We have no drugs approved for commercialization and have never generated any revenue from drug sales. Most of our drug candidates are still in the preclinical testing stage. It could be several years, if ever, before we have a commercialized drug. ~~The~~We expect to continue to incur significant expenses and operating losses over the next several years, and the net losses we incur may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially if, and as, we:

Even if we ~~are unable to continue as a going concern,~~complete the development and regulatory processes described above, we ~~may have to liquidate~~anticipate incurring significant costs associated with launching and commercializing our ~~assets~~current and may receive less than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all or a part of their investment. Further, the perception that we may be unable to continue as a going concern may impede our ability to pursue strategic opportunities or operate our business due to concerns regarding our ability to discharge our contractual obligations.

~~Even if~~future drug candidates.

If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations.

~~We have never generated any revenue from drug sales.~~

Our operations have consumed substantial amounts of cash since our inception, ~~in April 2014,~~ primarily due to research and development of our drug candidates, organizing and staffing our company, business planning, raising capital, and acquiring ~~assets and undertaking the development of OV101 and OV935.~~assets. We have not yet demonstrated the ability to obtain marketing approvals, manufacture a commercial-scale drug or conduct sales and

marketing activities necessary for successful commercialization. Consequently, any predictions about our future success or viability may not be as accurate as they could be if we had more experience developing drug candidates.

Our ability to generate revenue from drug sales and achieve profitability depends on our ability, alone or with any current or future collaborative partners, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, our current and future drug candidates. We do not anticipate generating revenue from drug sales for the next several years, if ever. Our ability to generate revenue from drug sales depends heavily on our, or any current or future collaborators’, success in the following areas, including but not limited to:

~~timely and successfully completing preclinical and clinical development of our current and future drug candidates;~~

~~obtaining regulatory approvals for our current and future drug candidates for which we successfully complete clinical trials;~~

launching and commercializing any drug candidates for which we obtain regulatory approval by establishing a sales force, marketing and distribution infrastructure or, alternatively, collaborating with a commercialization partner;

~~qualifying for coverage and adequate reimbursement by government and third-party payors for any drug candidates for which we obtain regulatory approval, both in the United States and internationally;~~

developing, validating and maintaining a commercially viable, sustainable, scalable, reproducible and transferable manufacturing process for our current and future drug candidates that is compliant with current good manufacturing practices, (“cGMP”);

establishing and maintaining supply and manufacturing relationships with third parties that can provide an adequate amount and quality of drugs and services to support clinical development, as well as the market demand for our current and future drug candidates, if approved;

obtaining market acceptance, if and when approved, of our current or any future drug candidates as a viable treatment option by physicians, patients, third-party payors and others in the medical community;

~~effectively addressing any competing technological and market developments;~~

~~implementing additional internal systems and infrastructure, as needed;~~

~~negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations pursuant to such arrangements;~~

~~our ability to obtain and maintain orphan drug exclusivity for any of our current and future drug candidates for which we obtain regulatory approval;~~

~~maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how;~~

~~avoiding and defending against third-party interference or infringement claims; and~~

~~securing appropriate pricing in the United States, the European Union and other countries.~~

We expect our financial condition and operating results to continue to fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. We will need to eventually transition from a company with a research and development focus to a company capable of undertaking commercial activities. We may encounter unforeseen expenses, difficulties, complications and delays and may not be successful in such a transition.

Our operations have consumed substantial amounts of cash since our inception. We expect our expenses to increase ~~in connection with our ongoing and planned activities, particularly~~ as we ~~continue to develop~~advance our current and future drug candidates through preclinical studies and clinical trials, commercialize our drug candidates, ~~in addition to costs associated with~~and pursue the acquisition or in-licensing of any additional drug ~~candidates we may pursue.~~candidates. Our expenses could increase beyond expectations if the FDA or other regulatory authorities require us to perform preclinical studies or clinical ~~and other studies~~trials in addition to those that we currently anticipate. In addition, even if we obtain marketing approval for our drug candidates, they may not achieve commercial success. Our revenue, if any, will be derived from sales of drugs that we do not expect to be commercially available for a number of years, if at all. If we obtain marketing approval for any drug candidates that we develop or otherwise acquire, we expect to incur significant expenses related to manufacturing, marketing, sales and distribution. ~~Furthermore, we expect to continue to incur additional costs associated with operating as a public company.~~

As of December 31, ~~2020,~~2023, our cash, ~~and~~ cash equivalents and marketable securities were ~~$72.0~~$105.8 million and we had an accumulated deficit of ~~$294.2~~$277.9 million. ~~Management has identified certain conditions or events, which, considered in the aggregate, raise substantial doubt about~~We believe that our ~~ability to continue as a going concern, including the risk that we~~existing cash, cash equivalents and marketable securities will ~~be unable to raise adequate additional capital to~~ fund our

~~operations~~ current operating plans through at least ~~the~~ 12 months ~~following~~from the filing ~~date~~ of this ~~annual report~~Annual Report on Form 10-K. ~~Substantial doubt about~~However, our ~~ability~~operating plans may change because of many factors currently unknown to ~~continue as a going concern may create negative reactions to the price of our common stock. If we are unable to raise capital,~~us, and we may ~~be required~~need to ~~delay, reduce the scope~~seek additional funds sooner than planned, through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of or eliminate research and development programs, or obtain funds through arrangements with collaborators or others that may require us to relinquish rights to certain drug candidates that we might otherwise seek to develop or commercialize independently. In addition, if we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all or a part of their investment. Further, the perception that we may be unable to continue as a going concern may impede our ability to pursue strategic opportunities or operate our business due to concerns regarding our ability to discharge our contractual obligations.

these approaches.

We will require more capital in order to ~~continue our~~advance the preclinical and clinical ~~activities, to~~development, obtain regulatory approval and, ~~for the commercialization of~~following regulatory approval, commercialize our current or future drug candidates. Any additional capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our current and future drug candidates. ~~The COVID-19 pandemic~~

While the long-term economic impacts associated with public health crises and geopolitical tensions, like the ongoing war between Russia and Ukraine and war in Israel, are difficult to assess or predict, each of these events has ~~already resulted in a~~caused significant ~~disruption of~~disruptions to the global financial ~~markets.~~markets and contributed to a general global economic slowdown. Furthermore, inflation rates have increased recently to levels not seen in decades. Increased inflation may result in increased operating costs (including labor costs) and may affect our operating budgets. In addition, the U.S. Federal Reserve has raised interest rates in response to concerns about inflation. High interest rates, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. If the ~~disruption persists~~disruptions and ~~deepens,~~slowdown deepen or persist, we ~~could experience an inability~~may not be able to access additional ~~capital. If we do not raise additional~~ capital on favorable terms, or at all, which could in ~~sufficient amounts, or on terms acceptable to us, we may be prevented from pursuing development~~the future negatively affect our financial condition and ~~commercialization efforts, which will harm our business, operating results and prospects.~~

Raising additional capital or acquiring or licensing assets by issuing equity or debt securities may cause dilution to our stockholders, and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights.

Until such time as we can generate substantial revenue from drug sales, if ever, we expect to finance our cash needs through a combination of equity and debt financings, strategic alliances, and license and development agreements in connection with any collaborations. We do not have any committed external source of funds. To the extent that we issue additional equity securities, our stockholders may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. In addition, we may issue equity or debt securities as consideration for obtaining rights to additional compounds. For example, in our arrangement with Takeda, upon the achievement of a certain development milestone, we will be obligated to issue to Takeda additional securities equal to up to 8% of our outstanding capital stock in certain situations which will dilute our stockholders. In addition, further dilution may occur if we elect to issue shares of common stock to Takeda as payment for the remaining potential global commercial and regulatory milestone payments, which aggregate to approximately $35.0 million. In March 2021, we entered into a royalty, license and termination agreement (“Takeda License and Termination Agreement”) with Takeda under which Takeda will secure global rights at closing from us to develop and commercialize the investigational medicine OV935 for the treatment of developmental and epileptic encephalopathies, including DS and LGS. Closing of the Takeda License and Termination Agreement is subject to satisfaction of customary closing conditions. See “Business—License and Collaboration Agreements—Agreements with Takeda—2021 Royalty, License and Termination Agreement with Takeda” for a discussion of the terms of the Takeda License and Termination Agreement.

~~Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting~~ our ability to ~~take specific actions, such as redeeming~~pursue our shares, making investments, issuing additional equity, incurring additional debt, making capital expenditures, declaring dividends or placing limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could negatively impact our ability to conduct our business. If we raise additional capital through future collaborations, strategic alliances or third-party licensing arrangements, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or drug candidates, or grant licenses on terms that may not be favorable to us. For example, on July 9, 2020, we entered into a collaboration and license agreement (the “Angelini License Agreement”) with Angelini Pharma Rare Diseases AG, pursuant to which we granted to Angelini exclusive rights to develop and commercialize OV101 in the European Economic Area as well as Switzerland, the United Kingdom, Russia and Turkey. The licenses granted to Angelini include sublicenses under our existing license agreement with H. Lundbeck A/S (“Lundbeck”), as well as licenses under our patents and know-how covering OV101.

business strategy.

If we are unable to raise additional capital when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts, or grant rights to develop and market drug candidates that we would otherwise develop and market ourselves.

In addition, under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” its ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points (by value) over their lowest ownership percentage over a rolling three-year period. We may have experienced ownership changes in the past and may experience ownership changes in the future as a result of shifts in our stock ownership (some of which are outside our control). As a result, if we earn net taxable income, our ability to use our pre-change NOLs and certain other

For the years ended December 31, 2023 and 2022, we recorded no U.S. federal or state income tax provision, based on pre-tax losses of $52.3 million and $54.2 million, respectively. As of December 31, 2023, we had available approximately $150.2 million of unused NOL carryforwards for U.S. federal income tax purposes, $12.6 million of unused NOL carryforwards for Massachusetts income tax purposes, $164.1 million of unused NOL carryforwards for New York income tax purposes, and $163.9 million of unused NOL carryforwards for New York City income tax purposes, that may be applied against future taxable income. Our NOL carryforwards are significantly limited such that if we achieve profitability in future periods, we may not be able to utilize ~~a material portion~~most of ~~our~~the NOL carryforwards, ~~and certain other tax attributes,~~ which could have a material adverse effect on cash flow and results of operations.

New tax laws, statutes, rules, regulations, or ordinances could be enacted at any time. For instance, the recently enacted Inflation Reduction Act of 2022 (the “IRA”) imposes, among other rules, a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases. Further, existing tax laws, statutes, rules, regulations, or ordinances could be interpreted differently, changed, repealed, or modified at any time. Any such enactment, interpretation, change, repeal, or modification could adversely affect us, possibly with retroactive effect. In particular, changes in corporate tax rates, the realization of our net deferred tax assets, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act, as amended by the CARES Act or any future tax reform legislation, could have a material impact on the value of our deferred tax assets, result in significant one-time charges, and increase our future tax expenses.

We are early in our development efforts. We previously publicly announced we anticipate filing three INDs in three years, beginning in 2022; however, we cannot guarantee success of preclinical development to achieve all such INDs. Following IND acceptance, each of our drug candidates will need to be progressed through clinical development in order to achieve regulatory approval, and we will also need to address issues relating to manufacture and supply, which may involve building our own capacity and expertise. In order to commercialize any product that achieves regulatory approval, we will need to build a commercial organization or successfully outsource commercialization, all of which will require substantial investment and significant marketing efforts before we have the ability to generate any revenue from drug sales. We do not have any drugs that are approved for commercial sale, and we may never be able to develop or commercialize marketable drugs.

Our ability to generate revenue from drug sales and achieve profitability depends on our ability, alone or with any current or future collaborative partners, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, our current and future drug candidates. We do not anticipate generating revenue from drug sales for the next several years, if ever. Our ability to generate revenue from drug sales depends heavily on our, or any current or future collaborators’, success in the following areas, including but not limited to:

If we are not successful with respect to one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize the drug candidates we develop, which would materially harm our business. If we do not receive marketing approvals for any drug candidate we develop, we may not be able to continue our operations.

We do not have any drugs that have received regulatory approval. Our business is dependent on our ability to successfully complete preclinical and clinical development of, obtain regulatory approval for, and, if approved, successfully commercialize our current and future drug candidates in a timely manner. Activities associated with the development and commercialization of our current and future drug candidates are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and similar regulatory authorities outside the United States. Failure to obtain regulatory approval in the United States or other jurisdictions would prevent us from commercializing and marketing our current and future drug candidates. An inability to effectively develop and commercialize our current and future drug candidates ~~whether due to the impacts of the ongoing COVID-19 pandemic or otherwise,~~ could have an adverse effect on our business, financial condition, results of operations and growth prospects.

Soticlestat, the most advanced compound we helped to develop, is continuing to be developed by Takeda and is currently in a pivotal trial program. If the pivotal trials are unsuccessful, or the compound is not approved, we will not receive the milestone payments and royalties from the RLT Agreement. Without those funds, we may need to raise significant additional capital to pursue the development and commercialization of our current and future pipeline.

Further, activities associated with the development and commercialization of our current and future drug candidates are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and similar regulatory authorities outside the United States. Failure to obtain regulatory approval in the United States or other jurisdictions would prevent us from commercializing and marketing our current and future drug candidates.

Even if we obtain approval from the FDA and comparable foreign regulatory authorities for our current and future drug candidates, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements. If we are unable to obtain regulatory approval, or any approval contains significant limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of that drug candidate or any other drug candidate that we may in-license, develop or acquire in the future. In certain circumstances, ~~including under our license agreement with Angelini for OV101,~~ our third-party

Furthermore, even if we obtain regulatory approval for our current and future drug candidates, we will still need to develop a commercial organization, establish a commercially viable pricing structure and obtain approval for adequate reimbursement from third-party and government payors. If we are unable to successfully commercialize our current and future drug candidates, we may not be able to generate sufficient revenue to continue our business.

From time to time, we have and may in the future publish or report preliminary or interim data from our clinical trials, such as the initial data we announced from the ENDYMION open label extension trial for OV935 in September 2019, which involved data from the first six patients enrolled in that extension trial which showed promising signs of efficacy over the treatment period, or the topline data from the ELEKTRA trial for OV935 in August 2020.trials. Preliminary or interim data from our clinical trials and those of our partners may not be indicative of the final results of the trial and are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and/or more patient data become available. Preliminary or topline results also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published or reported. As a result, preliminary or interim data should be considered carefully and with caution until final data are available. Differences between preliminary or interim data and final data could significantly harm our business prospects and may cause the trading price of our common stock to fluctuate significantly.

We

All of our current drug candidates are in early clinical or preclinical development and their risk of failure is high. We must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that each of our drug candidates ~~we must conduct extensive clinical trials to demonstrate the safety~~are safe and ~~efficacy of the drug candidate~~effective for its intended ~~indications. Clinical~~indications before we are prepared to submit an NDA or BLA for regulatory approval. We cannot predict with any certainty if or when we might submit an NDA or BLA for any of our product candidates or whether any such application will be approved by the FDA. Human clinical trials are very expensive ~~time-consuming~~ and ~~uncertain as~~difficult to ~~outcome. Further, delays~~design and ~~interruptions~~implement, in part because they are subject to ~~ongoing trials related~~rigorous review and regulatory requirements by numerous government authorities in the United States and in other countries where we intend to test and market our product candidates. For instance, the ~~COVID-19 pandemic~~FDA may ~~also increase~~not agree with our proposed endpoints for any future clinical trial of our product candidates, which may delay the ~~duration and costs~~commencement of such ~~trials.~~clinical trial.

We estimate that the successful completion of clinical trials of our product candidates will take at least several years to complete, if not longer. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. AFurthermore, failure ~~of one or more clinical trials~~ can occur at any stage ~~of testing.~~and we could encounter problems that cause us to abandon or repeat clinical trials. Events that may prevent successful or timely completion of clinical development include:

•our inability to generate sufficient preclinical, toxicology or other data to support the initiation of clinical trials;

•our inability to develop and validate disease-relevant clinical endpoints;

•delays in reaching a consensus with regulatory authorities on trial design;

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•delays in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical trial sites;

•delays in opening investigational sites;

•delays or difficulty in recruiting and enrollment of suitable patients to participate in our clinical ~~trials, whether as a result of the COVID-19 pandemic or otherwise;~~

trials;

•imposition of a clinical hold by regulatory authorities because of a serious adverse event, concerns with a class of drug candidates or after an inspection of our clinical trial operations or trial sites;

•delays in having patients complete participation in a trial or return for post-treatment follow-up;

•occurrence of serious adverse events associated with the drug candidate that are viewed to outweigh its potential benefits;

•changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; or

•business interruptions resulting from ~~geo-political actions,~~global geopolitical tensions, including the ongoing war between Russia and Ukraine and war in Israel, any other war or the perception that hostilities may be imminent, including terrorism, or natural disasters ~~and~~or public health ~~epidemics.~~

crises.

~~In addition, our clinical trials may be affected by the COVID-19 pandemic.~~

Clinical site initiation and patient enrollment may be delayed due to prioritization of hospital resources toward the COVID-19 pandemic. Patients may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, could be limited, which in turn could adversely impact our clinical trial operations. Additionally, we may experience interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel, quarantines or social distancing protocols imposed or recommended by federal or state governments, employers and others in connection with the ongoing COVID-19 pandemic. As a result of the COVID-19 pandemic, we have faced and may continue to face delays in meeting our anticipated timelines for our ongoing and planned clinical trials.

Further, clinical endpoints for certain diseases we are targeting, such as ~~Angelman syndrome and Fragile X syndrome,~~CCM, have not been established, and accordingly we may have to develop new modalities or modify existing endpoints to measure efficacy, which may increase the time it takes for us to commence or complete clinical trials. In addition, we believe investigators in this area may be inexperienced in conducting trials in this area due to the current lack of drugs to treat these disorders, which may result in increased time and expense to train investigators and open clinical sites.

Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue from future drug sales and regulatory and commercialization milestones. In addition, if we make manufacturing or formulation changes to our drug candidates, we may need to conduct additional testing to bridge our modified drug candidate to earlier versions. Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our drug candidates, if approved, or allow our competitors to bring comparable drugs to market before we do, which could impair our ability to successfully commercialize our drug candidates and may harm our business, financial condition, results of operations and prospects.

Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our drug candidates, we may:

•be delayed in obtaining marketing approval, if at all;

•obtain approval for indications or patient populations that are not as broad as intended or desired;

•obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

•be subject to additional post-marketing testing requirements;

•be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;

•have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy (“REMS”);

•be subject to the addition of labeling statements, such as warnings or contraindications;

•be sued; or

•experience damage to our reputation.

Our 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.

Further, we, the FDA or an ~~institutional review board (“IRB”)~~IRB may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including the FDA’s current ~~Good Clinical Practice (“GCP)~~GCP regulations, that we are exposing participants to unacceptable health risks, or if the FDA finds deficiencies in our ~~investigational new drug (“IND”)~~IND applications or the conduct of these trials. Therefore, we cannot predict with any certainty the schedule for commencement

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and completion of future clinical trials. If we experience delays in the commencement or completion of our clinical trials, or if we terminate a clinical trial prior to completion, the commercial prospects of our drug candidates could be negatively impacted, and our ability to generate revenues from our drug candidates may be delayed.

Angelman syndrome has no treatments approved by the U.S. Food and Drug Administration, and the primary clinical endpoint, CGI-I-AS, has not previously been used as a sole primary endpoint in a pivotal clinical trial.

Angelman syndrome is characterized by a variety of signs and symptoms, such as delayed development, intellectual disability, severe speech impairment, problems with movement and balance, seizures, sleep disorders and anxiety. In order to obtain a broad indication for treatment of Angelman syndrome from the FDA, we may need to demonstrate efficacy on several of the key symptoms of Angelman syndrome. If we fail to do so, our clinical development may be delayed and/or our label may be limited. I~~n December 2020, we reported the primary endpoint of the NEPTUNE study was not achieved.~~ ~~Based on the results of the NEPTUNE trial, further development of OV101, other than the ELARA trial, is currently on hold.~~

We may need to develop a new liquid formulation of OV101 for use in infant patients if our existing formulation in capsules that can be opened and sprinkled on semi-solid foods is not acceptable to the regulatory authorities, and we may be unable to successfully develop an appropriate liquid formulation

Our existing formulation of OV101 is an oral capsule. We have recently developed lower strength capsules that can be opened and sprinkled on applesauce or similar semi-solid foods. However, we may need to develop an oral liquid formulation of OV101 for use in very young pediatric patients. While we have begun developing this formulation, we do not know if our efforts will be successful or if the FDA will agree that the new formulation is comparable to our current formulation. We may experience manufacturing problems that may affect solubility or stability, or we may discover that the new formulation is less effective than an oral capsule. In addition, we will need to conduct bridging studies to demonstrate that the new formulation is equivalent to our oral capsule, which could result in delays in development and additional costs.

If 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.

A key element of our current strategy is to discover, develop and potentially commercialize a portfolio of drug candidates to treat rare epilepsies, seizure-related disorders, and rare neurological disorders. However, our business development activities and research activities may present attractive opportunities outside of epilepsies and seizure-related disorders and we may choose to pursue drug candidates in other areas of interest including other disorders that we believe would be in the best interest of the Company and our stockholders. We plan to continuously review our strategies and modify as necessary based on attractive areas of interest and assets that we choose to pursue. We intend to ~~do so~~develop our portfolio of drug candidates by in-licensing and entering into collaborations with leading biopharmaceutical companies or academic institutions for new drug candidates. Identifying new drug candidates requires substantial technical, financial and human resources, whether or not any drug candidates are ultimately identified. Our approach to business development, including our efforts to map the biological pathways related to orphan disorders of the brain and our relationships among the pharmaceutical industry, may not result in viable drug candidates for clinical development. The COVID-19 pandemic could also impact our ability to do in person due diligence, negotiations and other interactions to identify new opportunities. Even if we identify drug candidates that initially show promise, we may fail to in-license or acquire these assets and may also fail to successfully develop and commercialize such drug candidates for many reasons, including the following:

•the research methodology used may not be successful in identifying potential drug candidates;

•competitors may develop alternatives that render any drug candidate we develop obsolete;

•any drug candidate we develop may nevertheless be covered by third parties’ patents or other exclusive rights;

•a drug candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

•a drug candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and

•a drug candidate may not be accepted as safe and effective by physicians, patients, the medical community or third-party ~~payors.~~

payors, even if approved.

We have limited financial and management resources and, as a result, we may forego or delay the pursuit of opportunities with other drug candidates or for other indications that later prove to have greater market potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities. If we do not accurately evaluate the commercial potential or target market for a particular drug candidate, we may relinquish valuable rights to that drug candidate through collaboration, licensing or other royalty arrangements in circumstances under which it would have been more advantageous for us to retain sole development and commercialization rights to such drug candidate.

If we are unsuccessful in identifying and developing additional drug candidates or are unable to do so, our key growth strategy and business will be harmed.

~~Clinical trials are very expensive, time-consuming and difficult to design and implement.~~

Our drug candidates will require clinical testing before we are prepared to submit a new drug application (“NDA”) for regulatory approval. We cannot predict with any certainty if or when we might submit an NDA for regulatory approval for any of our drug candidates or whether any such NDA will be approved by the FDA. Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. For instance, the FDA may not agree with our proposed endpoints for any future clinical trial of our drug candidates, which may delay the commencement of our clinical trials. In addition, we may not succeed in developing and validating disease-relevant clinical endpoints based on insights regarding biological pathways for the disorders we are studying. The clinical trial process is also time-consuming. We estimate that the successful completion of clinical trials of our drug candidates will take at least several years to complete, if not longer. Furthermore, failure can occur at any stage and we could encounter problems that cause us to abandon or repeat clinical trials.

Enrollment 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.

Identifying and qualifying patients to participate in our clinical trials is critical to our success. The number of patients suffering from ~~Angelman syndrome, Fragile X syndrome~~some of the seizure-related disorders and ~~DEE, such as Dravet syndrome, Lennox-Gastaut syndrome, Dup15q syndrome and CDKL5 deficiency disorder~~rare neurological disorders we are pursuing is small and has not been established with precision. If the actual number of patients with these disorders is smaller than we anticipate, we may encounter difficulties in enrolling patients in our clinical trials, thereby delaying or preventing development and approval of our drug candidates. Even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials. Patient enrollment and retention in clinical trials depends on many factors, including the size of the patient population, the nature of the trial protocol, the existing body of safety and efficacy data, the number and nature of competing treatments and ongoing clinical trials of competing therapies for the same indication, the proximity of patients to clinical sites and the eligibility criteria for the trial, any such enrollment issues could cause delays or prevent development and approval of our drug candidates. Because we are focused on addressing seizure-related disorders and rare neurological disorders, there are limited patient pools from which to draw in order to complete our clinical trials in a timely and cost-effective manner. Furthermore, our efforts to build relationships with patient communities may not succeed, which could result in delays in patient enrollment in our clinical trials. In addition, any negative results we may report in clinical trials

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of our drug candidate may make it difficult or impossible to recruit and retain patients in other clinical trials of that same drug candidate. Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop our drug candidates or could render further development impossible.For example, the impact of public health pandemics, such as COVID-19, may delay or prevent patients from enrolling or from receiving treatment in accordance with the protocol and the required timelines, which could delay our clinical trials, or prevent us or our partners from completing our clinical trials at all, and harm our ability to obtain approval for such product candidate. In addition, we may rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will be limited in our ability to compel their actual performance.

Our 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.

During the conduct of clinical trials, patients report changes in their health, including illnesses, injuries and discomforts, to their doctor. Often, it is not possible to determine whether or not the drug candidate being studied caused these conditions. Regulatory authorities may draw different conclusions or require additional testing to confirm these determinations, if they occur. In addition, it is possible that as we test our drug candidates in larger, longer and more extensive clinical programs, or as use of these drug candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by subjects. Many times, side effects are only detectable after investigational drugs are tested in large-scale, Phase 3 trials or, in some cases, after they are made available to patients on a commercial scale after approval. For example, in one of the trials conducted by Lundbeck, there were reports of hallucinations in drug abusers at 30mg and 45mg doses of OV101, which are higher than the 10mg and 15mg doses that were effective for insomnia. In addition, some patients treated with OV101 in the Lundbeck Phase 3 trials experienced headaches, nausea and dizziness. In the STARS study, the most frequent adverse events were reported in certain clinical trials for OV101, ~~treated arms that were greater than placebo arm included pyrexia, rash, seizure, enuresis, myoclonic epilepsy, otitis media~~our former drug candidate, and ~~viral infection. Patients in our ongoing or planned clinical~~soticlestat. Clinical trials may experience similar or other adverse events after treatment with OV101. In the Phase 1b/2a OV935 trial, adverse events that occurred more frequently in the OV935-treatment group versus the placebo group were dysarthria, insomnia, lethargy, seizure cluster, and upper respiratory infection.not demonstrate any ocular safety benefits for OV329 relative to vigabatrin. If ~~additional~~ clinical experience indicates that any of our ~~current~~ drug candidates ~~including OV101 and OV935, or any future drug candidates has~~causes adverse events or ~~causes~~ serious or life-threatening adverse events, the development of that drug candidate may fail or be delayed, or, if the drug candidate has received regulatory approval, such approval may be revoked, which would harm our business, prospects, operating results and financial condition.

Moreover, if we elect, or are required, to delay, suspend or terminate any clinical trial of our drug candidates, the commercial prospects of our drug candidates may be harmed and our ability to generate revenue through their sale may be delayed or eliminated. Any of these occurrences may harm our business, financial condition and prospects significantly.

Additionally, if any of our drug candidates receive marketing approval, the FDA could require us to include a black box warning in our label or adopt REMS to ensure that the benefits outweigh its risks, which may include, among other things, a medication guide outlining the risks of the drug for distribution to patients and a communication plan to health care practitioners. Furthermore, if we or others later identify undesirable side effects caused by our drug candidates, several potentially significant negative consequences could result, including:

•regulatory authorities may suspend or withdraw approvals of such drug candidate;

•regulatory authorities may require additional warnings on the label;

•we may be required to change the way a drug candidate is administered or conduct additional clinical trials;

•we could be sued and held liable for harm caused to patients;

•we may need to conduct a recall; and

•our reputation may suffer.

Any 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.

If the market opportunities for our drug candidates are smaller than we believe they are, even assuming approval of a drug candidate, our business may suffer. Because the patient populations in the market for our drug candidates may be small and difficult to assess, we must be able to successfully identify patients and acquire a significant market share to achieve profitability and growth.

We focus our research and drug development on treatments for rare epilepsies, seizure-related disorders and rare neurological disorders. Given the small number of patients who have the disorders that we are targeting, our eligible patient population and pricing estimates may differ significantly from the actual market addressable by our drug candidates. Our projections of both the number of people who have these disorders, as well as the subset of people with these disorders who have the potential to benefit from treatment with our drug candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including the scientific literature, patient foundations, or market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these

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disorders. The number of patients may turn out to be lower than expected. Likewise, the potentially addressable patient population for each of our drug candidates may be limited or may not be amenable to treatment with our drug candidates, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our results of operations and our business.

We face substantial competition, which may result in others developing or commercializing drugs before or more successfully than us.

The development and commercialization of new drugs is highly competitive. We face competition with respect to our current drug candidates and will face competition with respect to any other drug candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell drugs or are pursuing the development of drug candidates for the treatment of the indications that we are pursuing. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

More established companies may have a competitive advantage over us due to their greater size, resources and institutional experience. In particular, these companies have greater experience and expertise in securing collaboration or partnering relationships, reimbursement, government contracts, relationships with key opinion leaders, conducting testing and clinical trials, obtaining and maintaining regulatory approvals and distribution relationships to market products, and marketing approved drugs. These companies also have significantly greater research and marketing capabilities than we do. If we are not able to compete effectively against existing and potential competitors, our business and financial condition may be harmed.

As a result of these factors, our competitors may obtain regulatory approval of their drugs before we are able to, which may limit our ability to develop or commercialize our drug candidates. Our competitors may also develop therapies that are safer, more effective, more widely accepted and cheaper than ours, and may also be more successful than us in manufacturing and marketing their drugs. These appreciable advantages could render our drug candidates obsolete or non-competitive before we can recover the expenses of such drug candidates’ development and commercialization.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and subject registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Even 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.

Even if our current or future drug candidates receive marketing approval, they may fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. If they do not achieve an adequate level of acceptance, we may not generate significant drug revenue and may not become profitable. The degree of market acceptance of our current or future drug candidates, if approved for commercial sale, will depend on a number of factors, including but not limited to:

•the efficacy and potential advantages compared to alternative treatments and therapies;

•the safety profile of our drug candidate compared to alternative treatments and therapies;

•effectiveness of sales and marketing efforts;

•the strength of our relationships with patient communities;

•the cost of treatment in relation to alternative treatments and therapies, including any similar generic treatments;

•our ability to offer such drug for sale at competitive prices;

•the convenience and ease of administration compared to alternative treatments and therapies;

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•the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

•the strength of marketing and distribution support;

•the availability of third-party coverage and adequate reimbursement;

•the prevalence and severity of any side effects; and

•any restrictions on the use of the drug together with other medications.

Our efforts to educate physicians, patients, third-party payors and others in the medical community on the benefits of our drug candidates may require significant resources and may never be successful. Such efforts may require more resources than are typically required due to the complexity and uniqueness of our drug candidates. Because we expect sales of our drug candidates, if approved, to

generate substantially all of our drug revenues for the foreseeable future, the failure of our drugs to find market acceptance would harm our business and could require us to seek additional financing.

If we are unable to establish sales and marketing capabilities, or enter into agreements with third parties to market and sell our current or any future drug candidates, we may be unable to generate any revenue from drug sales.

To successfully commercialize any drug candidate that may result from our development programs, we will need to build out our sales and marketing capabilities, either on our own or with others. The establishment and development of our own commercial team or the establishment of a contract sales force to market any drug candidate we may develop will be expensive and time-consuming and could delay any drug launch. Moreover, we cannot be certain that we will be able to successfully develop this capability. We may seek to enter into additional collaborations with other entities to utilize their established marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. If any current or future collaborators do not commit sufficient resources to commercialize our drug candidates, or we are unable to develop the necessary capabilities on our own, we will be unable to generate sufficient revenue to sustain our business. We compete with many companies that currently have extensive, experienced and well-funded marketing and sales operations to recruit, hire, train and retain marketing and sales personnel. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our current and future drug candidates. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.

Even 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.

Approval of a drug candidate in the United States by the FDA does not ensure approval of such drug candidate by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Sales of our current and future drug candidates outside of the United States will be subject to foreign regulatory requirements governing clinical trials and marketing approval. Even if the FDA grants marketing approval for a drug candidate, comparable regulatory authorities of foreign countries also must approve the manufacturing and marketing of the drug candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and more onerous than, those in the United States, ~~including~~which may require additional preclinical studies or clinical trials. In many countries outside the United States, a drug candidate must be approved for reimbursement before it can be approved for sale in that country. In some cases, the price that we intend to charge for any drug candidates, if approved, is also subject to approval. Obtaining approval for our current and future drug candidates in the European Union from the European Commission following the opinion of the ~~EMA,~~European Medicines Agency, if we choose to submit a marketing authorization application there, would be a lengthy and expensive process. ~~Even if a drug candidate is approved,~~The FDA and comparable foreign regulatory authorities have the ~~FDA or the European Commission, as the case may be, may~~ability to limit the indications for which the drug may be marketed, require extensive warnings on the drug labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our current and future drug candidates in certain countries. In certain cases, ~~including under our license with Angelini, which covers the European Economic Area as well as Switzerland, the United Kingdom, Russia and Turkey,~~ we are dependent on third parties to obtain such foreign regulatory approvals, and any delay or failure of performance of such third parties could delay or prevent our ability to commercialize our products in the affected countries. Due to the ongoing COVID-19 pandemic, it is possible that we could experience delays in the timing of our interactions with regulatory authorities due to absenteeism by governmental employees, inability to conduct planned physical inspections related to regulatory approval, or the diversion of regulatory authority efforts and attention to approval of other therapeutics or other activities related to COVID-19, which could delay anticipated approval decisions and otherwise delay or limit our ability to make planned regulatory submissions or obtain new product approvals.

Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Also, regulatory approval for our drug candidates may be withdrawn. If we fail to comply with the regulatory requirements, our target market will be reduced and our ability to realize the full market potential of our current and future drug candidates will be harmed and our business, financial condition, results of operations and prospects could be harmed.

If we seek approval to commercialize our current or future drug candidates outside of the United States, ~~in particular in the European Union and Israel,~~ a variety of risks associated with international operations could harm our business.

If we seek approval of our current or future drug candidates outside of the United States, we expect that we will be subject to additional risks in commercialization including:

•different regulatory requirements for approval of therapies in foreign countries;

•reduced protection for intellectual property rights;

•the potential requirement of additional clinical studies in international jurisdictions;

•unexpected changes in tariffs, trade barriers and regulatory requirements;

•economic weakness, including inflation, or political instability in particular foreign economies and markets;

•compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

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•foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

•foreign reimbursement, pricing and insurance regimes;

•workforce uncertainty in countries where labor unrest is more common than in the United States;

•production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

•business interruptions resulting from geopolitical ~~actions,~~tensions, including the ongoing war between Russia and Ukraine and the war in Israel, any other war or the perception that hostilities may be imminent, terrorism, or natural disasters ~~and~~or public health ~~pandemics, such as COVID-19;~~

crises.

We have no prior experience in these areas. In addition, there are complex regulatory, tax, labor and other legal requirements imposed by ~~both the European Union, Israel and~~ many of the individual countries in and outside of Europe with which we will need to comply. Many biopharmaceutical companies have found the process of marketing their own products in foreign countries to be very challenging.

Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any drug candidate that we may develop.

We face an inherent risk of product liability exposure related to the testing of our current and any future drug candidates in clinical trials and may face an even greater risk if we commercialize any drug candidate that we may develop. If we cannot successfully defend ourselves against claims that any such drug candidates caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

•decreased demand for any drug candidate that we may develop;

•loss of revenue;

•substantial monetary awards to trial participants or patients;

•significant time and costs to defend the related litigation;

•withdrawal of clinical trial participants;

•the inability to commercialize any drug candidate that we may develop; and

•injury to our reputation and significant negative media attention.

Although we maintain product liability insurance coverage, such insurance may not be adequate to cover all liabilities that we may incur. We anticipate that we will need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any drug candidate. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

Risks Related to Licensing and Collaboration Arrangements

We

Under the RLT Agreement, we are ~~heavily dependent on our relationship~~entitled to receive royalty and milestone payments in connection with ~~Takeda for~~ the development and commercialization of ~~OV935. Any disruption in our relationship with~~soticlestat. If Takeda ~~could lead~~fails to ~~delays in,~~progress or ~~the termination of,~~discontinues the development of ~~OV935,~~soticlestat, we may not receive some or all of such payments, which would materially harm our business.

We are jointly developing OV935 with Takeda pursuant to the Takeda collaboration, which also granted us intellectual property rights to OV935. The development and commercialization of OV935 is highly dependent upon our relationship with Takeda, including Takeda’s submission of the IND to the FDA. If for any reason the Takeda collaboration is terminated, or we otherwise lose the intellectual property rights to OV935, our business would be adversely affected. The Takeda collaboration imposes on us rights and obligations, including but not limited to exclusivity, territorial rights, development, commercialization, funding, payment, diligence, sublicensing, insurance and intellectual property protection. After a negotiated time period, each party has the right to

terminate the license for convenience upon six to twelve months’ notice to the other party, which would result in us being unable to co-develop and sell OV935. Further, if we breach any material obligations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages to Takeda, and Takeda may have the right to terminate the license. Takeda could also breach its obligations under the agreement or may not commit a sufficient amount of resources to satisfy its obligations, which would result in the development of OV935 being materially delayed or terminated. In March 2021, we entered into the ~~Takeda License and Termination~~RLT Agreement, ~~under~~pursuant to which Takeda ~~will secure~~secured rights to our 50% global ~~rights at closing~~share in soticlestat, which we had originally licensed from usTakeda, and we granted to Takeda an exclusive worldwide license under our relevant intellectual property rights to develop and commercialize the investigational medicine ~~OV935~~soticlestat for the treatment of developmental and epileptic encephalopathies, including DSDravet syndrome and ~~LGS. Closing~~Lennox-Gastaut syndrome. All rights in soticlestat are now owned by Takeda or exclusively licensed to Takeda by us. Following the closing date of the RLT Agreement, Takeda ~~License~~assumed all responsibility for, and ~~Termination~~costs of, both development and commercialization of soticlestat, and we will no longer have any financial obligation to Takeda under the original collaboration agreement, including for milestone payments or any future development and commercialization costs. Upon closing of the RLT Agreement, we received a one-time, upfront payment of $196.0 million and, if soticlestat is ~~subject~~successfully developed, we will be eligible to ~~satisfaction~~receive up to an additional $660.0 million upon Takeda achieving specified regulatory and sales milestones. In addition, if soticlestat achieves regulatory approval, we will be entitled to receive tiered royalties at percentages ranging from the low double-digits up to 20% on sales of ~~customary closing conditions. See “Business—License~~soticlestat. Royalties will be payable on a country-by-country and ~~Collaboration Agreements—Agreements with Takeda—2021~~ ~~Royalty, License~~product-by-product basis during the period beginning on the date of the first commercial sale of such

37

product in such country and ~~Termination~~ending on the later to occur of the expiration of patent rights covering the product in such country and a specified anniversary of such first commercial sale. Pursuant to the Ligand Agreement, ~~with Takeda” for~~Ligand will receive a ~~discussion~~13% portion of the royalties and milestones owed to us pursuant to the RLT Agreement.

Under the terms of the RLT Agreement, Takeda ~~License and Termination Agreement.~~

~~We are dependent on our relationship with Angelini for~~now has sole discretion over the conduct of the development and commercialization of OV101 in European Economic Area as well as Switzerland, the United Kingdom, Russia and Turkey. Any disruption in our relationship with Angelini could lead to delays in the development and achievement of regulatory approval in these countries, which would materially harm our business.

Under our license agreement with Angelini, Angelini obtained exclusive rights to develop and commercialize OV101 in the European Economic Area as well as Switzerland, the United Kingdom, Russia and Turkey. The development and commercialization of OV101 is highly dependent upon our relationship with Angelini, and on Angelini’s performance of its obligations under the agreement, including with respect to the preparation and submission of applications for marketing approval in Europe and the other licensed countries.soticlestat. If for any reason, ~~Angelini~~Takeda fails to ~~perform its obligations,~~progress, or elects to terminate the development of soticlestat as contemplated by the RLT Agreement, or if the development or commercialization of soticlestat is delayed or deprioritized by Takeda, we may not ~~be able~~receive some or all of the royalty and milestone payments under such agreement. We are dependent upon Takeda’s progression of such development and the resulting payments to ~~achieve~~fund the regulatory ~~approval for OV101 in~~development of our current and future drug candidates. If we are unable to find alternative sources of revenue, our inability to receive royalty or milestone payments under the ~~licensed countries, or may be materially delayed in doing so, and~~RLT Agreement would negatively impact our business ~~would be adversely affected.~~

~~We may be required to make significant payments in connection with our licenses~~and results of ~~OV101 from Lundbeck and OV935 from Takeda.~~

We acquired rights to OV101, pursuant to a license agreement with Lundbeck in March 2015 (the “Lundbeck Agreement”), as amended on May 10, 2019. Under the Lundbeck Agreement, as amended, we are subject to significant obligations, including payment obligations upon achievement of specified milestones and royalties on drug sales, as well as other material obligations. We are obligated to pay Lundbeck milestone payments up to an aggregate of $189.0 million upon the achievement of certain development, regulatory and sales milestone events. In addition, we are obligated to pay Lundbeck tiered royalties based on net sales of OV101. If these payments become due under the terms of the Lundbeck agreement, we may not have sufficient funds available to meet our obligations and our development efforts may be harmed.

We also acquired rights to OV935 pursuant to a license and collaboration agreement with Takeda (the “Takeda collaboration”) in January 2017. Under the Takeda collaboration, we are obligated to pay Takeda future payments upon achievement of specified milestones. Upon the first patient enrollment in the first Phase 3 trial for the first of the initial indications we and Takeda are focusing on pursuant to the Takeda collaboration, we are obligated to issue to Takeda the number of unregistered shares of our common stock equal to the lesser of (i) 8% of our outstanding capital stock on the issuance date or (ii) $50.0 million divided by the applicable share price, unless certain events occur. The remaining potential global commercial and regulatory milestone payments equal approximately $35.0 million and can be satisfied in cash or unregistered shares of our common stock at our election, unless certain events occur in which Takeda can require us to pay such payments in cash. In the event a payment settled in shares of our common stock would cause Takeda to own over 19.99% of our outstanding capital stock or other events occur, such payment must be paid in cash. If these payments become due under the terms of the Takeda collaboration and we can only pay, or choose to pay, these payments in cash, we may not have sufficient funds available to meet our obligations and our development efforts may be harmed. In March 2021, we entered into the Takeda License and Termination Agreement under which Takeda will secure global rights at closing from us to develop and commercialize the investigational medicine OV935 for the treatment of developmental and epileptic encephalopathies, including DS and LGS~~. Closing of the Takeda License and Termination Agreement is subject to satisfaction of customary closing conditions. See “Business—License and Collaboration Agreements—Agreements with Takeda—2021~~ ~~Royalty, License and Termination Agreement with Takeda” for a discussion of the terms of the Takeda License and Termination Agreement.~~

operations.

Risks associated with the in-licensing or acquisition of drug candidates could cause substantial delays in the preclinical and clinical development of our drug candidates.

~~Prior to March 2015, we had no involvement with or control over the preclinical and clinical research and development of OV101.~~

We have ~~relied on Lundbeck or its prior licensee to have conducted such research~~previously acquired and development in accordance with the applicable protocol, legal, regulatory and scientific standards, having accurately reported the results of all clinical trials conducted prior to our acquisition of OV101 and having correctly collected and interpreted the data from these trials. If the research and development processes or the results of the development programs prior to our acquisition of OV101 prove to be unreliable, this could result in increased costs and delays in the development of OV101, which could adversely affect any future revenue from this drug candidate.

~~Similarly, we acquired rights to OV935 from Takeda in January 2017. Because we were not involved in the development of OV935 prior to January 2017,~~ we may experience difficulties in the transition of certain development activities from Takeda and its affiliates to us, which may result in delays in clinical trials, as well as problems in our development efforts. In March 2021, we entered into the Takeda License and Termination Agreement under which Takeda will secure global rights at closing from us to develop and commercialize the investigational medicine OV935 for the treatment of developmental and epileptic encephalopathies, including DS and LGS~~. Closing of the Takeda License and Termination Agreement is subject to satisfaction of customary closing conditions. See “Business—License and Collaboration Agreements—Agreements with Takeda—2021~~ ~~Royalty, License and Termination Agreement with Takeda” for a discussion of the terms of the Takeda License and Termination Agreement.~~

~~We may also~~ acquire or in-license ~~additional~~ drug candidates for preclinical or clinical development in the future as we continue to build our pipeline. ~~The risks associated~~Such arrangements with ~~acquiring~~third parties may impose, diligence, development and commercialization obligations, milestone payments, royalty payments, indemnification and other obligations on us. Our obligations to pay milestone, royalty and other payments to our licensors may be substantial, and the amount and timing of such payments may impact our ability to progress the development and commercialization of our drug candidates. Our rights to use any licensed intellectual property may be subject to the continuation of and our compliance with the terms of any such agreements. Additionally, disputes may arise regarding our rights to intellectual property licensed to us or ~~in-licensing current~~acquired by us from a third party, including but not limited to:

•the scope of intellectual property rights included in, and rights granted under, any license or other agreement;

•the sublicensing of patent and other rights under such agreements;

•our compliance with our diligence obligations under any license agreement;

•the ownership of inventions and know-how resulting from the creation or use of intellectual property by us, alone or with our licensors and collaborators;

•the scope and duration of our payment obligations, and our ability to make such payments when they are owed;

•our need to acquire additional intellectual property rights from third parties that may impact payments due under such agreements;

•the rights of our licensors to terminate any such agreement;

•our rights and obligations upon termination of such agreement; and

•the scope and duration of exclusivity obligations of each party to the agreement.

Disputes over intellectual property and other rights that we have licensed or acquired, or may license or acquire in the future, ~~drug candidates~~from third parties could prevent or impair our ability to maintain any such arrangements on acceptable terms, result in delays in the commencement or completion of our preclinical studies and clinical trials ~~if ever,~~ and impact our ability to ~~generate revenues from~~successfully develop and commercialize the affected drug candidates. If we fail to comply with our ~~drug candidates~~obligations under any future licensing agreements, these agreements may be ~~delayed.~~

terminated or the scope of our rights under them may be reduced and we might be unable to develop, manufacture or market any product that is licensed under these agreements.

We may be required to relinquish important rights to and control over the development and commercialization of our drug candidates to any future collaborators.

Our current and future collaborations could subject us to a number of risks, including:

•we may be required to undertake the expenditure of substantial operational, financial and management resources;

•we may be required to issue equity securities that would dilute our stockholders’ percentage of ownership;

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•we may be required to assume substantial actual or contingent liabilities;

•we may not be able to control the amount and timing of resources that our strategic collaborators devote to the development or commercialization of our drug candidates;

•strategic collaborators may delay clinical trials, provide insufficient funding, terminate a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new version of a drug candidate for clinical testing;

•strategic collaborators may not pursue further development and commercialization of products resulting from the strategic collaboration arrangement or may elect to discontinue research and development programs;

•strategic collaborators may not commit adequate resources to the marketing and distribution of our drug candidates, limiting our potential revenues from these products;

•we rely on our current collaborators to manufacture drug substance and drug product and may do so with respect to future collaborators, which could result in disputes or delays;

•disputes may arise between us and our strategic collaborators that result in the delay or termination of the research, development or commercialization of our drug candidates or that result in costly litigation or arbitration that diverts management’s attention and consumes resources;

•disputes may arise between us and our current or future collaborators regarding any termination of any collaboration, license, or other business development arrangement in which we may enter;

•strategic collaborators may experience financial difficulties;

•strategic collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation;

•business combinations or significant changes in a strategic collaborator’s business strategy may also adversely affect a strategic collaborator’s willingness or ability to complete its obligations under any arrangement;

•strategic collaborators could decide to move forward with a competing drug candidate developed either independently or in collaboration with others, including our competitors; and

•strategic collaborators could terminate the arrangement or allow it to expire, which would delay the development and may increase the cost of developing our drug candidates.

If 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.

Our business plan is to continue to evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary drugs, intellectual property rights, technologies, or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:

•increased operating expenses and cash requirements;

•the assumption of additional indebtedness or contingent liabilities;

•assimilation of operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel;

•the diversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership, merger or acquisition;

•retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;

•risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or drug candidates and regulatory approvals;

•our inability to generate revenue from acquired technology and/or drugs sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs;

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•challenges related to integrating acquired businesses or entering into or realizing the benefits of strategic transactions generally; and

•risks associated with potential international acquisition transactions, including in countries where we do not currently have a material presence.

In addition, if we engage in future acquisitions or strategic partnerships, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or drugs that may be important to the development of our business.

We may explore additional strategic collaborations that may never materialize or may fail.

Our business strategy is based on acquiring or in-licensing compounds directed at rare epilepsies, seizure-related disorders, and rare neurological disorders. As a result, we intend to periodically explore a variety of possible additional strategic collaborations in an effort to gain access to additional drug candidates or resources. At the current time, we cannot predict what form such a strategic collaboration might take. We are likely to face significant competition in seeking appropriate strategic collaborators, and strategic collaborations can be complicated and time consuming to negotiate and document. We may not be able to negotiate strategic collaborations on acceptable terms, or at all. We are unable to predict when, if ever, we will enter into any additional strategic collaborations because of the numerous risks and uncertainties associated with establishing them.

Further, our business development activities and research activities may present attractive opportunities outside of rare epilepsies and seizure-related disorders and we may choose to pursue drug candidates in other areas of interest including other disorders and diseases that we believe would be in the best interest of the Company and our stockholders. We plan to continuously review our strategies and modify as necessary based on attractive areas of interest and assets that we choose to pursue.

Risks Related to Regulatory Compliance

Our relationships with customers, physicians, and third-party payors may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

Healthcare providers and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any drug candidates for which we obtain marketing approval. Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors may subject us to various federal and state fraud and abuse laws and other healthcare laws, including, without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and the law commonly referred to as the Physician Payments Sunshine Act and regulations. These laws will impact, among other things, our clinical research, proposed sales, marketing and educational programs. In addition, we may be subject to patient privacy laws by both the federal government and the states in which we conduct or may conduct our business. The laws that will affect our operations include, but are not limited to:

•the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in return for the purchase, recommendation, leasing or furnishing of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “PPACA”), amended the intent requirement of the federal Anti-Kickback Statute. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation;

•federal civil and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. The PPACA provides, and recent government cases against pharmaceutical and medical device manufacturers support, the view that federal ~~Anti-Kickback~~Anti-

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Kickback Statute violations and certain marketing practices, including off-label promotion, may implicate the False Claims Act;

•the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created additional federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor (e.g., public or private);

•HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act; Other Modifications to HIPAA, published in January 2013, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, individuals or entities that perform certain services on behalf of a covered entity that involves the use or disclosure of individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information;

•Physician Payments Sunshine Act, which is part of the PPACA, that require certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services (“CMS”), information related to: (i) payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals; and (ii) ownership and investment interests held by physicians and their immediate family members which will be expanded beginning in 2022, to require applicable manufacturers to report information regarding payments and other transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives during the previous year;

members;

•state and foreign law equivalents of each of the above federal laws, state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and/or information regarding drug pricing, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers, state laws and regulations that require drug manufacturers to file reports relating to drug pricing and marketing information, and state and local laws that require the registration of pharmaceutical sales representatives; and

•state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Because 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.

It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.

The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. The shifting compliance environment and the need to build and maintain robust and expandable systems to

41

comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

Coverage 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.

Market acceptance and sales of any drug candidates that we commercialize, if approved, will depend in part on the extent to which coverage and adequate reimbursement for these drugs and related treatments will be available from third-party payors, including government health administration authorities, managed care organizations and other private health insurers. Third-party payors decide which therapies they will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any drug candidates that we develop will be made on a payor-by-payor basis. One third-party payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Each third-party payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed. The position on a third-party payor’s list of covered drugs, or formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our drugs unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our drugs.

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for any drug that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any drug for which we obtain marketing approval. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize our current and any future drug candidates that we develop. Further, coverage policies and third-party payor reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future.

Healthcare legislative reform measures may have a negative impact on our business and results of operations.

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of drug candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any drug candidates for which we obtain marketing approval.

Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. In March 2010, the PPACA was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry.

There have been executive, judicial, Congressional and executive branch challenges to certain aspects of the PPACA. For example, ~~President Trump signed Executive Orders and other directives designed to delay~~on June 17, 2021 the implementation of certain provisions of the PPACA or otherwise circumvent some of the requirements for health insurance mandated by the PPACA. Concurrently, Congress considered legislation to repeal or repeal and replace all or part of the PPACA. While Congress has not passed comprehensive repeal legislation, it has enacted lawsU.S. Supreme Court dismissed a challenge on procedural grounds that modify certain provisions of the PPACA such as removing penalties, starting January 1, 2019, for not complying with the PPACA’s individual mandate to carry health insurance, delaying the implementation of certain PPACA-mandated fees, and increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D. Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the PPACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer tax. On December 14, 2018, a Texas U.S. District Court Judge ruled thatargued the PPACA is unconstitutional in its entirety because the “individual mandate” was repealed by ~~Congress as part~~Congress. Further, there have been a number of health reform measures by the ~~Tax Cuts and Jobs Act of 2017.~~Biden administration that have impacted the PPACA. On ~~December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was~~

unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the PPACA are invalid as well. The United States Supreme Court is currently reviewing this case, but it is unknown when a decision will be reached. Although the Supreme Court has not yet ruled on the constitutionality of the PPACA, on January 28, 2021,August 16, 2022, President Biden ~~issued an executive order to initiate a special enrollment period from February 15, 2021 through May 15, 2021~~signed the IRA into law, which among other things, extends enhanced subsidies for ~~purposes of obtaining~~individuals purchasing health insurance coverage in PPACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and by creating a new manufacturer discount program. It is possible that the PPACA ~~marketplace. The executive order also instructs certain governmental agencies~~will be subject to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create barriers to obtaining access to health insurance coverage through Medicaidjudicial or Congressional challenges in the ~~PPACA.~~future. It is unclear how ~~the Supreme Court ruling, other~~any such ~~litigation~~challenges and the healthcare reform measures of the Biden administration will impact the PPACA and our business.

Other legislative changes have been proposed and adopted since the PPACA was enacted. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of

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2011, which began in 2013, and due to subsequent legislative amendments to the statute, ~~including the BBA,~~ will remain in effect ~~through 2030~~until 2032 unless additional Congressional action is taken. ~~However, COVID-19 relief legislation suspended the 2% Medicare sequester from May 1, 2020 through March 31, 2021.~~ The American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), which ended the use of the statutory formula and established a quality payment program, also referred to as the Quality Payment Program. ~~In November 2019, CMS issued a final rule finalizing~~This program provides clinicians with two ways to participate, including through the ~~changes to~~Advanced Alternative Payment Models (“APMs”) and the ~~Quality~~Merit-based Incentive Payment ~~Program. At this time, the full impact to overall physician reimbursement as a result of the introduction of the Quality Payment Program remains unclear.~~

System (“MIPS”). Under both APMs and MIPS, performance data collected each performance year will affect Medicare payments in later years, including potentially reducing payments.

Also, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which have resulted in several Presidential executive orders, Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. At the federal level,, in July 2021, the ~~Trump~~Biden administration ~~used several means~~released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to ~~propose or implement~~Biden’s executive order, on September 9, 2021, the U.S. Department of Health and Human Services (“HHS”) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform ~~including through federal budget proposals, executive orders~~ and ~~policy initiatives. For example, on July 24, 2020~~sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and ~~September 13, 2020,~~biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023. On August 29, 2023, HHS announced the ~~Trump administration announced several executive orders related to prescription drug pricing that attempt to implement several~~list of the ~~administration’s proposals. The FDA also released a final rule, effective November 30, 2020, implementing a portion of~~first ten drugs that will be subject to price negotiations, although the ~~importation executive order providing guidance for states~~Medicare drug price negotiation program is currently subject to ~~build and submit importation plans for drugs from Canada.~~ Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The implementation of the rule has been delayed bylegal challenges. Additionally, the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed pending review by the Biden administration until March 22, 2021. ~~On November 20, 2020, CMS issued~~released an ~~interim final rule implementing President Trump’s Most Favored Nation~~additional executive order ~~which would tie~~on October 14, 2022, directing HHS to report on how the Center for Medicare ~~Part B payments~~and Medicaid Innovation can be further leveraged to test new models for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021. On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule. It is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.lowering drug costs for Medicare and Medicaid beneficiaries. At the state level, legislatures have increasingly passed and implemented regulations designed to control pharmaceutical and biological product pricing, including pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. We expect that these and other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved drug. For example, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Centers for Medicare & Medicaid Services Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs.

~~It is possible that additional governmental action is taken in response to the ongoing COVID-19 pandemic.~~

We 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.

Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act of 1983, the FDA may designate a drug as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States. Generally, if a drug with an orphan drug designation subsequently receives the first marketing approval for an indication for which it receives the designation, then the drug is entitled to a period of marketing exclusivity that precludes the

applicable regulatory authority from approving another marketing application for the same drug for the same indication for the exclusivity period except in limited situations. For purposes of small molecule drugs, the FDA defines “same drug” as a drug that contains the same active moiety and is intended for the same use as the drug in question. A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.

For OV101, the FDA granted orphan drug designation for OV101 for the treatment of Angelman syndrome and for the treatment of Fragile X syndrome in September 2016 and October 2017, respectively. The EMA granted orphan designation for OV101 for the treatment of Angelman syndrome in June 2019. The FDA granted orphan drug designation for OV935 for the treatment of Dravet syndrome and Lennox-Gastaut syndrome both in December 2017. We intend to pursue orphan drug designation for OV101 in additional indications, pending our further analysis of the NEPTUNE trial data and analysis of data from ELARA, for OV935 in additional indications, pending closing of the Takeda License and Termination Agreement, and for potential other future drug candidates.

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Obtaining orphan drug designations is important to our business strategy; however, obtaining an orphan drug designation can be difficult and we may not be successful in doing so. Even if we were to obtain orphan drug designation for a drug candidate, we may not obtain orphan exclusivity and that exclusivity may not effectively protect the drug from the competition of different drugs for the same condition, which could be approved during the exclusivity period. Additionally, after an orphan drug is approved, the FDA could subsequently approve another application for the same drug for the same indication if the FDA concludes that the later drug is shown to be safer, more effective or makes a major contribution to patient care. Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition. The failure to obtain an orphan drug designation for any drug candidates we may develop, the inability to maintain that designation for the duration of the applicable period, or the inability to obtain or maintain orphan drug exclusivity could reduce our ability to make sufficient sales of the applicable drug candidate to balance our expenses incurred to develop it, which would have a negative impact on our operational results and financial condition.

~~We have received Fast Track designations for OV101 for~~ ~~the treatment of Angelman syndrome and Fragile X syndrome, but such designations may not actually lead to a faster development or regulatory review or approval process.~~

~~The FDA granted Fast Track designations to OV101~~ ~~for the treatment of Angelman syndrome and Fragile X syndrome in December 2017 and March 2018, respectively~~. If a drug is intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical need for such condition, a sponsor may apply for FDA Fast Track designation. Even though we received Fast Track designations for OV101, such Fast Track designations do not ensure that we will receive marketing approval or that approval will be granted within any particular timeframe for any of these fast track-designated indications. We may not experience a faster development or regulatory review or approval process with Fast Track designation compared to conventional FDA procedures. In addition, the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures.

Although the FDA has granted Rare Pediatric Disease Designation for OV101 for the treatment of Angelman Syndrome, an NDA for OV101, if approved, may not meet the eligibility criteria for a priority review voucher.

Rare Pediatric Disease Designation has been granted for OV101 for the treatment of Angelman Syndrome. In 2012, Congress authorized the FDA to award priority review vouchers to sponsors of certain rare pediatric disease product applications. This provision is designed to encourage development of new drug and biological products for prevention and treatment of certain rare pediatric diseases. Specifically, under this program, a sponsor who receives an approval for a drug or biologic for a “rare pediatric disease” may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product. The sponsor of a rare pediatric disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor. The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the transfer has not yet submitted the application. The FDA may also revoke any priority review voucher if the rare pediatric disease drug for which the voucher was awarded is not marketed in the U.S. within one year following the date of approval. For the purposes of this program, a “rare pediatric disease” is a (a) serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents; and (b) rare disease or conditions within the meaning of the Orphan Drug Act. Congress has only authorized the Rare Pediatric Disease Priority Review Voucher program until September 30, 2024. However, if a drug candidate receives Rare Pediatric Disease Designation before September 30, 2024, it is eligible to receive a voucher if it is approved before September 30, 2026.

However, OV101 for the treatment of Angelman Syndrome may not be approved by that date, or at all, and, therefore, we may not be in a position to obtain a priority review voucher prior to expiration of the program, unless Congress further reauthorizes the program. Additionally, designation of a drug for a rare pediatric disease does not guarantee that an NDA will meet the eligibility criteria for a rare pediatric disease priority review voucher at the time the application is approved. Finally, a Rare Pediatric Disease Designation does not lead to faster development or regulatory review of the product, or increase the likelihood that it will receive marketing approval. We may or may not realize any benefit from receiving designation or a voucher.

Even if we obtain regulatory approval for our current or future drug candidates, they will remain subject to ongoing regulatory oversight.

Even if we obtain any regulatory approval for our current or future drug candidates, such approvals will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information. Any regulatory approvals that we receive for our current or future drug candidates may also be subject to a REMS, limitations on the approved indicated uses for which the drug may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 trials, and surveillance to monitor the quality, safety and efficacy of the drug.

In addition, drug manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the NDA, BLA or foreign marketing application. If we, or a regulatory authority, discover previously unknown problems with a drug, such as adverse events of unanticipated severity or frequency, or problems with the facility where the drug is manufactured or if a regulatory authority disagrees with the promotion, marketing or labeling of that drug, a regulatory authority may impose restrictions relative to that drug, the manufacturing facility or us, including requesting a recall or requiring withdrawal of the drug from the market or suspension of manufacturing.

If we fail to comply with applicable regulatory requirements following approval of our current or future drug candidates, a regulatory authority may:

•issue an untitled letter or warning letter asserting that we are in violation of the law;

•seek an injunction or impose administrative, civil or criminal penalties or monetary fines;

•suspend or withdraw regulatory approval;

•suspend any ongoing clinical trials;

•refuse to approve a pending NDA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners;

•restrict the marketing or manufacturing of the drug;

•seize or detain the drug or otherwise require the withdrawal of the drug from the market;

•refuse to permit the import or export of drug candidates; or

•refuse to allow us to enter into supply contracts, including government contracts.

Moreover, the FDA strictly regulates the promotional claims that may be made about drug products. In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant civil, criminal and administrative penalties.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize our current or future drug candidates and harm our business, financial condition, results of operations and prospects.

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In addition, the FDA’s policies, and those of equivalent foreign regulatory agencies, may change and additional government regulations may be enacted that could cause changes to or delays in the drug review process, or suspend or restrict regulatory approval of our drug candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would harm our business, financial condition, results of operations and prospects.

Risks Related to Our Intellectual Property

If 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.

We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to our development programs and drug candidates. Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our current and any future drug candidates. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our current and future development programs and drug candidates. The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

Pursuant to the Lundbeck Agreement, as amended, we obtained an exclusive, worldwide license to develop, manufacture and commercialize OV101 for the treatment of human disease. However, the Lundbeck Agreement, as amended, permits Lundbeck and certain other entities to manufacture and research OV101 and, in certain situations, to perform additional non-commercial activities involving OV101, all of which could result in new patentable inventions concerning the manufacture or use of OV101. While the Lundbeck Agreement, as amended, prohibits Lundbeck from filing certain patent applications regarding OV101 and obligates Lundbeck to include certain newly filed patents in the license granted to us, if new patents issue that cover valuable methods for making or using OV101, we would be prohibited from employing such methods to manufacture or use OV101 unless we obtain a license to such patents.

It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our current or any future drug candidates in the United States or in other foreign countries. There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue and even if such patents cover our current or any future drug candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated, or held unenforceable. Any successful opposition to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any drug candidates or companion diagnostic that we may develop. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a drug candidate and companion diagnostic under patent protection could be reduced.

If the patent applications we hold or have in-licensed with respect to our development programs and drug candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for our current or any future drug candidates, it could dissuade companies from collaborating with us to develop drug candidates, and threaten our ability to commercialize, future drugs. Any such outcome could have a negative effect on our business.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does. Publications of discoveries in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or drugs, in whole or in part, or which effectively prevent others from commercializing competitive technologies and drugs. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.

Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. On December 16, 2011, the Leahy-Smith America Invents Act ~~(the “Leahy-Smith~~(“Leahy-Smith Act”) was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation. The United States Patent Office recently developed new regulations and procedures to govern

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administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could harm our business and financial condition.

Moreover, we may be subject to a third-party pre-issuance submission of prior art to the ~~U.S. Patent and Trademark Office (the “USPTO”)~~USPTO or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference

proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or drugs and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize drugs without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future drug candidates.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad. An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and drugs, or limit the duration of the patent protection of our technology and drugs. Moreover, patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years from the earliest filing date of a non-provisional patent application. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Without patent protection for our current or future drug candidates, we may be open to competition from generic versions of such drugs. Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.

~~We may be unable to prevent third parties from selling, making, promoting, manufacturing, or distributing alternative polymorphic forms of OV101.~~

We currently have issued patents directed to polymorphic forms of OV101. These patents would not prevent a third-party from creating, making and marketing alternative polymorphic forms that fall outside the scope of these patent claims. There can be no assurance that any such alternative polymorphic forms will not be therapeutically equivalent and/or commercially feasible. In the event an alternative polymorphic form of OV101 is developed and approved for use in indications that we may seek approval for, the marketability and commercial success of OV101, if approved, could be materially harmed.

Obtaining 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.

Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and/or applications will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of our owned and licensed patents and/or applications and any patent rights we may own or license in the future. We rely on our outside counsel or our licensing partners to pay these fees due to non-U.S. patent agencies. The USPTO and various non-U.S. government patent agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply and we are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market and this circumstance could harm our business.

Patent terms may be inadequate to protect our competitive position on our drug candidates for an adequate amount of time.

Given the amount of time required for the development, testing and regulatory review of new drug candidates, ~~such as OV101,~~ patents protecting such candidates might expire before or shortly after such candidates are commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we are prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved indication (or any additional indications approved during the period of extension). However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their drug earlier than might otherwise be the case.

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Intellectual property rights do not necessarily address all potential threats to our business.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business. The following examples are illustrative:

•others may be able to make compounds or formulations that are similar to our drug candidates but that are not covered by the claims of any patents, should they issue, that we own or control;

•we or any strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or control;

•we might not have been the first to file patent applications covering certain of our inventions;

•others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

•it is possible that our pending patent applications will not lead to issued patents;

•issued patents that we own or control may not provide us with any competitive advantages, or may be held invalid or unenforceable because of legal challenges;

•our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive drugs for sale in our major commercial markets;

•we may not develop additional proprietary technologies that are patentable; and

•the patents of others may have an adverse effect on our business.

The proprietary map of disease-relevant biological pathways underlying orphan disorders of the brain that we developed would not be appropriate for patent protection and, as a result, we rely on trade secrets to protect this aspect of our business.

Third 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.

Our commercial success depends, in part, upon our ability and the ability of our current or future collaborators to develop, manufacture, market and sell our current and any future drug candidates and use our proprietary technologies without infringing the proprietary rights and intellectual property of third parties. The biotechnology and pharmaceutical industries are characterized by extensive and complex litigation regarding patents and other intellectual property rights. We may in the future become party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our current and any future drug candidates and technology, including interference proceedings, post grant review and inter partes review before the USPTO. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of their merit. There is a risk that third parties may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us. Even if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, which could have a negative impact on our ability to commercialize our current and any future drug candidates. In order to successfully challenge the validity of any such U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court of competent jurisdiction would invalidate the claims of any such U.S. patent. If we are found to infringe a third party’s valid and enforceable intellectual property rights, we could be required to obtain a license from such third party to continue developing, manufacturing and marketing our drug candidate(s) and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or drug candidate. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. A finding of infringement could prevent us from manufacturing and commercializing our current or any future drug candidates or force us to cease some or all of our business operations, which could materially harm our business. Claims that we have misappropriated the confidential information or trade

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secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects. See the section herein titled “Legal Proceedings” for additional information.

We 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.

Certain of our employees, consultants or advisors are currently, or were previously, employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary

information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.

We 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.

Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights. To counter infringement or unauthorized use, we may be required to file legal claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. The initiation of a claim against a third party may also cause the third party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or lack of statutory subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the USPTO, or made a materially misleading statement, during prosecution. Third parties may also raise similar validity claims before the USPTO in post-grant proceedings such as ex parte reexaminations, inter partes review, or post-grant review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. We cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. For the patents and patent applications that we have licensed, we may have limited or no right to participate in the defense of any licensed patents against challenge by a third party. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of any future patent protection on our current or future drug candidates. Such a loss of patent protection could harm our business.

We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other employees.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our common stock.

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Changes 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.

The United States has recently enacted and implemented wide-ranging patent reform legislation. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future. Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.

We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.

Filing, prosecuting and defending patents covering our current and any future drug candidates throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own drugs and, further, may export otherwise infringing drugs to territories where we may obtain patent protection, but where patent enforcement is not as strong as that in the United States. These drugs may compete with our drugs in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

Reliance 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.

If we rely on third parties to manufacture or commercialize our current or any future drug candidates, or if we collaborate with additional third parties for the development of our current or any future drug candidates, we must, at times, share trade secrets with them. We may also conduct joint research and development programs that may require us to share trade secrets under the terms of our research and development partnerships or similar agreements. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure could have an adverse effect on our business and results of operations.

In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentially relating to our trade secrets. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any third-party collaborators. A competitor’s discovery of our trade secrets would harm our business.

Risks Related to Our Dependence on Third Parties

We 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.

We 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. The drug substance for OV101 was manufactured by Lundbeck. We believe that the drug substance transferred from Lundbeck under the Lundbeck Agreement will be sufficient for us to complete our ongoing and future clinical trials. Until the closing of the ~~Takeda License and Termination Agreement, we will also continue to rely on Takeda to provide the drug product supply for our planned clinical trials of OV935.~~

Further, we also will rely on third-party manufacturers to supply us with sufficient quantities of our drug candidates ~~including OV101 and OV935,~~ to be used, if approved, for commercialization. Any significant delay in the supply of a drug candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could

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considerably delay completion of our clinical trials, product testing and potential regulatory approval of our drug candidates.

Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured drug candidates ourselves including:

•inability to meet our drug specifications and quality requirements consistently;

•delay or inability to procure or expand sufficient manufacturing capacity;

•issues related to scale-up of manufacturing;

•costs and validation of new equipment and facilities required for scale-up;

•failure to comply with cGMP and similar foreign standards;

•inability to negotiate manufacturing agreements with third parties under commercially reasonable terms, if at all;

•termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;

•reliance on single sources for drug components;

•lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier;

•operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier; and

•carrier disruptions or increased costs that are beyond our control.

Any of these events could lead to clinical trial delays, failure to obtain regulatory approval or impact our ability to successfully commercialize our current or any future drug candidates once approved. Some of these events could be the basis for FDA action, including injunction, request for recall, seizure, or total or partial suspension of production.

We 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.

We do not currently have the ability to independently conduct any preclinical studies or clinical trials. We intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our preclinical studies and clinical trials, and we expect to have limited influence over their actual performance. We intend to rely upon CROs to monitor and manage data for our clinical programs, as well as the execution of future ~~nonclinical~~preclinical studies. We expect to control only certain aspects of our CROs’ activities. Nevertheless, we will be responsible for ensuring that each of our preclinical studies or clinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.

We and our CROs will be required to comply with good laboratory practices (“GLPs”) and ~~good clinical practices (“GCPs”),~~GCPs, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International ~~Conference on~~Council for Harmonization guidelines for any of our drug candidates that are in preclinical and clinical development. The regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites. Although we will rely on CROs to conduct GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations, and our reliance on the CROs does not relieve us of our regulatory responsibilities. If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of subjects, we may be required to repeat clinical trials, which would delay the regulatory approval process.

While we will have agreements governing their activities, our CROs will not be our employees, and we will not control whether or not they devote sufficient time and resources to our future clinical and ~~nonclinical~~preclinical programs. These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm our business. We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret

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protection and allow our potential competitors to access and exploit our proprietary technology. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any drug candidate that we develop. As a result, our financial results and the commercial prospects for any drug candidate that we develop would be harmed, our costs could increase, and our ability to generate revenue could be delayed.

If our relationship with these CROs terminates, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. Switching or adding additional CROs involves substantial cost and requires management time and

focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can negatively impact our ability to meet our desired clinical development timelines. Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a negative impact on our business, financial condition and prospects.

In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the trial. The FDA may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA and may ultimately lead to the denial of marketing approval of our current and future drug candidates.

If our ~~contemplated royalty, license~~relationship with these CROs terminates, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. Switching or adding additional CROs involves substantial cost and ~~repurchase agreement with Takeda is not successfully closed or if we fail to realize the benefits we anticipate from such strategic alliance,~~ ~~it may harm our business~~.

~~In March 2021, we entered into the Takeda License~~requires management time and Termination Agreement under which Takeda will secure global rights at closing from us to develop and commercialize the investigational medicine OV935 for the treatment of developmental and epileptic encephalopathies, including DS and LGS.

Under the Takeda collaboration, Takeda received equity in us and was eligible to receive up to $85.0 million in payments for regulatory milestones, including the initiation of Phase 3 clinical trials. Since signing the agreement, we led global development of OV935.

Should we close the Takeda License and Termination Agreement, all rights in OV935 will be owned by Takeda, or exclusively licensed to Takeda by us. Takeda will assume sole responsibility for further worldwide development and commercialization, and we will no longer have any financial obligation to Takeda under the original collaboration agreement, including for milestone payments or any future development and commercialization costs. Under the Takeda License and Termination Agreement we will be eligible to receive an upfront payment of $196.0 million at closing and eligible to receive up to an additional $660.0 million upon Takeda achieving development, regulatory and sales milestones.focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can negatively impact our ability to meet our desired clinical development timelines. Though we ~~would~~intend to carefully manage our relationships with our CROs, there can be ~~entitled to receive tiered royalties beginning in the low double-digits, and up to 20% on sales of OV935, if approved and commercialized.~~

We expect to close the Takeda License and Termination Agreement in the first half of 2021, subject to the satisfaction of customary closing conditions, including regulatory review by the appropriate regulatory agencies under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”). We cannot assure youno assurance that such closing conditions will be satisfied or that the post-closing filing will be approved by the appropriate regulatory agencies under the HSR Act. If the regulatory agencies do not approve our filing, such agencies may request us to rescind the transactions related to the Takeda License and Termination Agreement. If we fail to close the Takeda License and Termination Agreement, then we will not ~~be entitled to any of~~encounter challenges or delays in the ~~payments described above, and the current terms of collaboration and related risks~~future or that these delays or challenges will ~~remain in effect and~~not have a negative impact on our business, ~~and~~ financial condition ~~may be harmed.~~

and prospects.

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

~~COVID-19 could adversely impact our business, including our clinical trials and access to capital.~~

The ongoing COVID-19 pandemic has resulted in travel and other restrictions in order to reduce the spread of the disease, including state and local orders across the country, which, among other things, direct individuals to shelter at their places of residence, direct businesses and governmental agencies to cease non-essential operations at physical locations, prohibit certain non-essential gatherings, and order cessation of non-essential travel. In response to these public health directives and orders, we have implemented work-from-home policies for all employees. Our current plans to return to the office remain fluid as federal, state and local guidelines, rules and regulations continue to evolve. The effects of the executive orders, the shelter-in-place orders and our work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

Quarantines, shelter-in-place and similar government orders related to COVID-19 may adversely impact our business operations and the business operations of our contract research organizations conducting our clinical trials and our third-party manufacturing facilities in the United States and other countries. In particular, some of our third-party manufacturers which we use for the supply of materials for product candidates or other materials necessary to manufacture product to conduct preclinical studies and clinical trials are located in countries affected by COVID-19, and should they experience disruptions, such as temporary closures or

~~suspension of services, we would likely experience delays in advancing these tests and trials. Currently, we expect no material impact on the clinical supply of any of our product candidates.~~

~~In addition, our clinical trials may be affected by the COVID-19 pandemic.~~

Clinical site initiation and patient enrollment may be delayed due to prioritization of hospital resources toward the COVID-19 pandemic. Some patients may not be willing or able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 and adversely impact our clinical trial operations. As a result of the COVID-19 pandemic, we have faced and may continue to face delays in meeting our anticipated timelines for our ongoing and planned clinical trials.

The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

The global pandemic of COVID-19 continues to rapidly evolve. The extent to which the COVID-19 pandemic impacts our business, our clinical development and regulatory efforts will depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, travel restrictions, quarantines, social distancing requirements and business closures in the United States and other countries, and business disruptions, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease. Accordingly, we do not yet know the full extent of potential delays or impacts on our business, our clinical and regulatory activities, healthcare systems or the global economy as a whole. However, these impacts could adversely affect our business, financial condition, results of operations and growth prospects.

In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties described in this ‘‘Risk Factors’’ section.

We 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.

We are highly dependent on our senior management team, including our Chairman and Chief Executive Officer, Dr. Levin. The employment agreements we have with these officers do not prevent such persons from terminating their employment with us at any time. The loss of the services of any of these persons could impede the achievement of our research, development, operational, financial and commercialization objectives.

In addition, we are dependent on our continued ability to attract, retain and motivate highly qualified additional management, clinical and scientific personnel. If we are not able to retain our management and to attract, on acceptable terms, additional qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or grow. This risk may be further amplified given the particularly competitive hiring market in New York City, the location of our corporate headquarters.

We may not be able to attract or retain qualified personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses. Many of the other pharmaceutical companies that we compete against for qualified personnel and consultants have greater financial and other resources, different risk profiles and a longer history in the industry than we do. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality candidates and consultants than what we have to offer. If we are unable to continue to attract, retain and motivate high-quality personnel and consultants to accomplish our business objectives, the rate and success at which we can discover and develop drug candidates and our business will be limited and we may experience constraints on our development objectives.

Our future performance will also depend, in part, on our ability to successfully integrate newly hired executive officers into our management team and our ability to develop an effective working relationship among senior management. Our failure to integrate these individuals and create effective working relationships among them and other members of management could result in inefficiencies in the development and commercialization of our drug candidates, harming future regulatory approvals, sales of our drug candidates and our results of operations. Additionally, we do not currently maintain “key person” life insurance on the lives of our executives or any of our employees.

As of December 31, ~~2020,~~2023, we had 6740 full-time employees. As our development and commercialization plans and strategies for our current pipeline of product candidates develop, we expect to need additional managerial, operational, sales, marketing, financial, legal and other resources. Our management may need to divert a disproportionate amount of its attention away from our day-to-day operations and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational inefficiencies, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of our current and potential future drug candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and grow revenue could be reduced and we may not be able to implement our business strategy. Our future financial performance, our ability to commercialize drug candidates, develop a scalable infrastructure and compete effectively will depend, in part, on our ability to effectively manage any future growth.

We are exposed to the risk that our employees, consultants, distributors, and collaborators may engage in fraudulent or illegal activity. Misconduct by these parties could include intentional, reckless or negligent conduct or disclosure of unauthorized activities to us that violates the regulations of the FDA and non-U.S. regulators, including those laws requiring the reporting of true, complete and accurate information to such regulators, manufacturing standards, healthcare fraud and abuse laws and regulations in the United States and abroad or laws that require the true, complete and accurate reporting of financial information or data. In particular, sales, marketing and business arrangements in the healthcare industry, including the sale of pharmaceuticals, are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. Further, because of ~~the work from home~~our hybrid-work policies, ~~we implemented due to COVID-19,~~ information that is normally protected, including company confidential information, may be less secure. If actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations. Whether or not we are successful in defending against such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations.

We are increasingly dependent on information technology systems and infrastructure, including mobile technologies, to operate our business. In the ordinary course of our business, we collect, store, process and transmit large amounts of sensitive ~~information, including intellectual property, proprietary business information, personal information~~data, and, ~~other confidential information. It is critical~~as a result, we and the third parties upon which we rely face a variety of evolving threats that ~~we do so in a secure manner to maintain the confidentiality, integrity and availability of such sensitive information.~~could cause security incidents. We have also outsourced elements of our operations (including elements of our information technology infrastructure) to third parties, and as a result, we manage a number of third-party vendors who may or could have access to our computer networks or our ~~confidential information.~~sensitive data. In addition, many of those third parties in turn subcontract or outsource some of their responsibilities to other third parties. While all information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks and exposures, the accessibility and distributed nature of our information technology systems, and the sensitive ~~information~~data stored on those systems, make such systems ~~potentially~~ vulnerable to unintentional or malicious, internal and external attacks on our technology environment. Furthermore, our ability to monitor the aforementioned third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages

In addition, due to ~~the COVID-19 pandemic,~~our hybrid-work environment, we ~~have enabled all~~may be more vulnerable to cyberattacks as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations. Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to ~~work remotely, which~~additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may ~~make us more vulnerable~~discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to ~~cyberattacks.~~ integrate companies into our information technology environment and security program.

Potential vulnerabilities can be exploited from inadvertent or intentional actions of our employees, third-party vendors, business partners, or by malicious third parties. ~~Attacks~~We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of ~~this nature~~third parties upon which we rely); however we may not detect and remediate all such vulnerabilities on a timely basis. Further, we may experience delays in deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident.

Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities are increasing in their frequency, levels of persistence, sophistication and intensity, and are also being conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise, including organized criminal groups, “hacktivists,” nation states and others. ~~In addition to the extraction of sensitive information, such~~Such attacks could include the deployment of harmful malware (including as a result of advanced persistent threat intrusions), ransomware attacks, denial-of-service attacks, credential stuffing and/or harvesting, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of sensitive data or other information technology assets, adware, attacks enhanced or facilitated by artificial intelligence, telecommunications failures, earthquakes, fires, floods and other means to affect service reliability and threaten the

confidentiality, integrity and availability of ~~information.~~our information systems and sensitive data. In ~~addition,~~particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the ~~prevalent use~~negative impact of ~~mobile devices increases the risk of data security incidents.~~

a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

Significant disruptions of our, our third-party vendors’ and/or business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive ~~information,~~data, which could result in financial, legal, regulatory, business and reputational harm to us. In addition, information technology system disruptions, whether from attacks on our technology environment or from computer viruses, natural disasters, terrorism, war and telecommunication and electrical failures, could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

~~There is no way~~

We may expend significant resources or modify our business activities to try to protect against security incidents. Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.

Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of ~~knowing~~security incidents. Such disclosures are costly, and the disclosure or the failure to comply with ~~certainty whether~~such requirements could lead to adverse consequences.

If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced ~~any data~~a security incidents that have not been discovered. While we have no reason to believe this to be the case, attackers have become very sophisticated in the way they conceal access to systems, and many companies that have been attacked are not aware that they have been attacked. Any event that leads to unauthorized access, use or disclosure of personal information,incident, including but not limited to a security incident involving personal information regarding our patients or employees, ~~could disrupt~~we may experience adverse consequences, such as disruptions to our business, harm to our reputation, ~~compel us to comply with applicable federal~~government enforcement actions (for example, investigations, fines, penalties, audits, and inspections), additional reporting requirements, and/or ~~state breach notification laws and foreign law equivalents,~~oversight, or we may otherwise be subject us to time consuming, distracting and expensive litigation, regulatory investigation and oversight, mandatory corrective action, require us to verify the correctness of database contents, or otherwise subject us to liability under laws, regulations and contractual obligations, including those that protect the privacy and security of personal information. This could result in increased

While we have implemented security measures intended to protect our information technology systems and infrastructure, there can be no assurance that such measures will ~~successfully prevent service interruptions~~be effective. Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security ~~incidents.~~

obligations.

In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions, clinical trial data and financial information (collectively, sensitive data).

Our data processing activities subject us to laws and regulations covering data privacy and the protection of personal information ~~including health information.~~and other sensitive data. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which may affect our business. In the ~~U.S.,~~United States, we may be subject to state security breach notification laws, state health information privacy laws and federal and state consumer protections laws which impose requirements for the collection, use, disclosure and transmission of personal information. Each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues for us. If we fail to comply with applicable laws and regulations, we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain individually identifiable health information from a covered entity in a manner that is not authorized or permitted by HIPAA or for aiding and abetting the violation of HIPAA.

Numerous other countries have, or are developing, laws governing the collection, use and transmission of personal information as well. EU member states and other jurisdictions have adopted data protection laws and regulations, which impose significant compliance obligations. For example, in May 2016, the EU formally adopted the General Data Protection Regulation ~~or GDPR,~~(“GDPR”), which applies to all EU member states as of May 25, 2018 and replaces the former EU Data Protection Directive. The regulation introduces new data protection requirements in the EU and imposes substantial fines for breaches of the data protection rules. The GDPR must be implemented into national laws by the EU member states imposes strict obligations and restrictions on the ability to collect, analyze, and transfer personal data, including health data from clinical trials and adverse event reporting. Data protection authorities from different EU member states have interpreted the privacy laws differently, which adds to the complexity of processing personal data in the EU, and guidance on implementation and compliance practices are often updated or otherwise revised. Any failure to comply with the rules arising from the GDPR and related national laws of EU member states could lead to government enforcement actions and ~~significant penalties against us,~~fines of up to 20 million Euros or 4% of annual global revenue, whichever is greater, and adversely impact our operating results. The GDPR will increase our responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms ensuring compliance with EU data protection rules.

In addition to data privacy and ~~potential liability.~~

security laws, we may be bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. We also publish privacy policies, marketing materials, and other statements regarding data privacy and security and if these policies, materials, or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations. If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data (including clinical trial data); and orders to destroy or not use personal data.

We are ~~an emerging growth company (“EGC”),~~currently a “smaller reporting company” as defined in the ~~Jumpstart Our Business Startups~~Securities Exchange Act of ~~2012~~1934, as amended (the ~~“JOBS~~“Exchange Act”). We will ~~remain an EGC until~~be a smaller reporting company and may take advantage of the ~~earlier of:~~scaled-back disclosures available to smaller reporting companies for so long as (i) the market value of our voting and non-voting ordinary shares held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or (ii) (a) our annual revenue is less than $100.0 million during the most recently completed fiscal year ~~in which we have total annual gross revenues~~and (b) the market value of ~~$1.07 billion or more; (ii) December 31, 2022,~~our voting and non-voting ordinary shares held by non-affiliates is less than $700.0 million measured on the last business day of ~~the~~our second fiscal year following the fifth anniversary of the date of the completion of our IPO; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on whichquarter.

As a smaller reporting company, we are ~~deemed~~permitted to comply with scaled-back disclosure obligations in our SEC filings compared to other issuers, including with respect to disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We have elected to adopt the accommodations available to smaller reporting companies. Until we cease to be a ~~large accelerated filer under~~smaller reporting company, the ~~rules~~scaled-back disclosure in our SEC filings will result in less information about our company being available than for other public companies. If investors consider our common shares less attractive as a result of our election to use the scaled-back disclosure permitted for smaller reporting companies, there may be a less active trading market for our common shares and our share price may be more volatile.

We may take advantage of certain of the ~~Securities~~scaled-back disclosures available to smaller reporting companies, including but not limited to:

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures. We are required, under Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. ~~However,~~

Our compliance with Section 404 ~~will~~in future periods may require that we incur substantial expense and expend significant management efforts. We currently do not have an internal audit group, and ~~we will~~rely on experienced consultants to support this function. We may need to hire additional consultants or accounting and financial staff with appropriate public company experience and technical accounting knowledge ~~and compile the system and process documentation necessary~~in order to ~~perform the evaluation needed to~~continually comply with Section 404. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness ~~or significant deficiency~~ in our internal control over financial reporting, ~~once that firm begins its Section 404 reviews,~~ we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by The Nasdaq Stock Market LLC, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

The market price of our common stock ishas been and likely ~~to be~~will remain volatile. The stock market in general and the market for biopharmaceutical or pharmaceutical companies in particular, has experienced extreme volatility that has often been unrelated to the operating performance of particular companies, ~~including very recently in connection with the ongoing COVID-19 pandemic,~~ which has resulted in decreased stock prices for many companies notwithstanding the lack of a fundamental change in their underlying business models or prospects. Broad market and industry factors, including potentially worsening economic conditions and other adverse effects or developments relating to ~~the~~new or ongoing ~~COVID-19 pandemic,~~public health crises or other inflationary factors, may negatively affect the market price of our common stock, regardless of our actual operating performance. As a result of this volatility, you may lose all or part of your investment in our common stock since you might be unable to sell your shares at or above the price you paid for the shares. The market price for our common stock may be influenced by many factors, including:

•results of clinical trials of our current and any future drug candidates or those of our competitors;

•the success of competitive drugs or therapies;

•regulatory or legal developments in the United States and other countries;

•developments or disputes concerning patent applications, issued patents or other proprietary rights;

•the recruitment or departure of key personnel;

•the level of expenses related to our current and any future drug candidates or clinical development programs;

•the results of our efforts to discover, develop, acquire or in-license additional drug candidates;

•actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

•our inability to obtain or delays in obtaining adequate drug supply for any approved drug or inability to do so at acceptable prices;

•disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

56

•significant lawsuits, including patent or stockholder litigation;

•variations in our financial results or those of companies that are perceived to be similar to us;

•changes in the structure of healthcare payment systems;

•market conditions in the pharmaceutical and biotechnology sectors;

•general economic, industry and market conditions; and

•the other factors described in this “Risk Factors” section.

In addition, in the past, stockholders have initiated class action lawsuits against companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources.

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates and uncertainty about economic stability. Global geopolitical tensions have created extreme volatility in the global capital markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.

There is no public market for our Series A convertible preferred stock.

There is no established public trading market for our Series A convertible preferred stock, and we do not expect a market to develop. In addition, we do not intend to apply for listing of the Series A convertible preferred stock on any national securities exchange or other nationally recognized trading system. Without an active market, the liquidity of the Series A convertible preferred stock will be limited.

We 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.

Until such time as we can generate ~~a sufficient amount of~~substantial revenue from ~~our products,~~drug sales, if ever, we expect to finance ~~future~~our cash needs through ~~public~~a combination of equity and debt financings, strategic alliances, and license and development agreements in connection with any collaborations. We do not have any committed external source of funds. To the extent that we issue additional equity securities, our stockholders may experience substantial dilution, and the terms of these securities may include liquidation or ~~private~~other preferences that adversely affect your rights as a stockholder. In addition, we may issue equity or debt ~~offerings.~~ securities as consideration for obtaining rights to additional compounds.

In November 2020, we filed a shelf registration statement on Form S-3 (Registration No. 333-250054) (the “Prior Registration Statement”). In November 2023, upon expiration of the of the Prior Registration Statement, we filed a new shelf registration statement on Form S-3 (Registration No. 333-275307) that allows us to sell up to an aggregate of $250.0 million of our common stock, preferred stock, debt securities and/or warrants (the ~~“S-3~~“Current S-3 Registration Statement”), which includes a prospectus covering the issuance and sale of up to $75.0 million of common stock pursuant to an at-the-market (“ATM”) offering program. As of December 31, ~~2020,~~2023, we had $250.0 million available under our Current S-3 Registration Statement, including $75.0 million available pursuant to our ATM program. ~~Financing activities~~Debt and equity financings, if available, may ~~have an adverse impact on~~involve agreements that include covenants limiting or restricting our stockholders’ rights as well as on our operations, and such additional funding may not be available on reasonable terms, if at all. If we raise additional funds through the issuance of additional debt or equity securities, it may result in dilutionability to our existing stockholders and/or increased fixed payment obligations. Furthermore, these securities may have rights senior to those of our common stock and could contain covenants that would restrict our operations and potentially impair our competitiveness,take specific actions, such as redeeming our shares, making investments, issuing additional equity, ~~limitations on our ability to incur~~incurring additional debt, making capital expenditures, declaring dividends or placing limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could ~~adversely~~negatively impact our ability to conduct our business. ~~Additionally, if~~If we ~~seek funds~~raise additional capital through future collaborations, strategic alliances or third-party licensing arrangements, ~~with collaborative partners, these arrangements~~we may ~~require us~~have to relinquish valuable rights to ~~some of~~ our ~~technologies~~intellectual property, future revenue streams, research programs or ~~product~~drug candidates, or ~~otherwise agree to~~grant licenses on terms ~~unfavorable~~that may not be favorable to us. Any of these events could significantly harm our business, financial condition and prospects.

57

You will be diluted by any conversions of outstanding Series A convertible preferred stock and exercises of outstanding options.

As of December 31, ~~2020,~~2023, we had outstanding options to purchase an aggregate of ~~10,403,420~~15,124,546 shares of our common stock at a weighted average exercise price of ~~$5.26~~$3.87 per share and ~~3,250,000~~1,250,000 shares of common stock issuable upon conversion of outstanding Series A convertible preferred stock for no additional consideration. Such Series A convertible preferred stock is convertible any time at the option of the holder thereof subject to the beneficial ownership limitations described in Note 67 to the consolidated financial statements contained in this Annual Report on Form 10-K. The exercise of such options and conversion of the Series A convertible preferred stock for shares of our common stock will result in further dilution of your investment and could negatively affect the market price of our common stock. In addition, you may experience further dilution if we issue common stock, or securities convertible into common stock, in the future. As a result of this dilution, you may receive significantly less than the full purchase price you paid for the shares in the event of liquidation.

Concentration of ownership of our common stock among our executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.

Based upon ~~our~~ shares of our common stock outstanding as of ~~March 8, 2021,~~December 31, 2023, our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock, in the aggregate, beneficially own shares representing approximately ~~35.54%~~52.4% of our outstanding common stock.

Takeda, a greater than 5% holder, may receive additional securities upon the achievement of certain development, commercial and regulatory milestones pursuant to the Takeda collaboration. Specifically, we will be obligated to issue additional securities to Takeda equal to the lesser of 8% of our outstanding capital stock or $50.0 million unless certain events occur, and may issue, at our discretion, additional securities to Takeda upon the achievement of other milestones. Further, pursuant to the Series B-1 preferred stock purchase agreement entered into with Takeda in January 2017, or the Takeda stock purchase agreement, Takeda has agreed to, among other things, (i) a standstill provision, (ii) restrictions on its ability to sell or otherwise transfer itits shares of our stock, (iii) vote its shares on certain matters in accordance with the holders of a majority of shares of our common stock and (iv) restrictions on the percentage of our outstanding common stock it may ~~own.~~

own, in accordance with the terms of the RLT Agreement.

If our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock acted together, they may be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. The concentration of voting power, Takeda standstill provisions, voting obligations and transfer restrictions could delay or prevent an acquisition of our company on terms that other stockholders may desire or result in the management of our company in ways with which other stockholders ~~disagree with.~~

disagree.

If 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.

The trading market for our common stock relies, in part, on the research and reports that industry or financial analysts publish about us or our business. We do currently have research coverage offered by several industry or financial analysts, although two analysts have withdrawn research coverage recently. We do not have any control over these analysts. If one or more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline. If ~~one or more of these~~additional analysts cease to cover our stock or fail to regularly publish reports, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

Provisions 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.

Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

Additionally, the Takeda standstill provisions and transfer restrictions in the ~~Takeda Stock Purchase~~RLT Agreement may delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.

The market price of our common stock may be volatile. ~~For example, on August 25, 2020, we announced the topline results of our ELEKTRA clinical trial, and our stock experienced a material decline.~~ In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management. These provisions include:

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, who are responsible for appointing the members of our management. Because we are incorporated in Delaware, we are governed by the

None.

We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third-party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, and confidential information that is proprietary, strategic or competitive in nature (“Information Systems and Data”). Our information security function is led by our Director of Information Technology, with the support of our third-party specialists. Our information security function helps identify, assess and manage risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods, including automated tools, domain name system filtering, antivirus protection, vulnerability scanning and penetration testing.

Depending on the environment, systems and data, we implement and maintain various technical, physical and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data. These measures include an incident response policy, encryption of certain data, network security controls, segregation of certain data and system monitoring. Our incident response policy provides the framework for the execution of cybersecurity incident response procedures and internal communications while adhering to applicable legal reporting and disclosure requirements.

Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk management processes. Our information security function works with management to prioritize risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business.

We use third-party service providers to assist us from time to time to identify, assess and manage material risks from cybersecurity threats. In addition, we use third-party service providers to perform a variety of functions throughout our business, including, for example, hosting and processing data, manufacturing our product candidates and assisting with R&D and clinical trial activities. Depending on the nature of the services provided, the sensitivity of the systems and data at issue, and the identity of the provider, our vendor contracting processes may include imposing certain contractual provisions related to privacy and cybersecurity.

Our board of directors maintains oversight of our most significant risks and our processes to identify, manage and mitigate those risks. The audit committee of our board of directors (the “Audit Committee”) has responsibility for oversight of our management of cybersecurity risks.

Our cybersecurity risk assessment and management processes are implemented and maintained by certain management, including our Director of Information Technology, who reports to our Chief Operating Officer. Our Director of Information Technology is responsible for monitoring third-party specialists, helping to integrate cybersecurity risk considerations into our overall risk management strategy and communicating key priorities to relevant personnel. Our Chief Operating Officer is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes and reviewing security assessments and other security-related reports.

Our Incident Response Policy is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our Chief Operating Officer. Our Chief Operating Officer and other senior management work with our incident response team to help mitigate and remediate cybersecurity incidents in which case they are notified. In addition, our Incident Response Policy includes reporting to the Audit Committee for certain cybersecurity incidents. The Incident Response Policy is managed and maintained by our Director of Information Technology, with oversight from our Chief Operating Officer. The Audit Committee receives periodic updates from our Chief Operating Officer regarding the status of our cybersecurity program and our posture to identify and mitigate risks to our information security.

We currently lease the space for our principal executive offices, which are located at ~~1460 Broadway,~~441 Ninth Avenue, New York, New York, onunder a ~~monthly basis.~~ten-year lease agreement which commenced in March 2022. We believe ~~that~~ our facilities are adequate to meet ~~our~~ current needs.

We are not currently subject to any material legal ~~proceedings~~.

proceedings.

Not applicable.

Our common stock began trading on The Nasdaq Global Select Market on May 5, 2017, under the symbol “OVID.”

The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act. The following graph shows a comparison from ~~May 5, 2017 (the date our common stock commenced trading on the Nasdaq Global Select Market)~~December 31, 2018 through December 31, ~~2020,~~2023, of the cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq ~~Biotechnology.~~

Biotechnology Index.

The graph assumes an initial investment of $100 on ~~May 5, 2017.~~December 31, 2018. The comparisons in the graph are not intended to forecast or be indicative of possible future performance of our common stock.

As of March ~~8, 2021,~~5, 2024, we had approximately 1114 holders of record of our common stock. Certain shares are held in ~~“street” name~~“street name” and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings to fund the development and growth of our business. We do not expect to pay any cash dividends in the foreseeable future. Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on then-existing conditions, including our financial conditions, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.

None.

We are a biopharmaceutical company dedicated to meaningfully improving the lives of people affected by certain epilepsies and brain conditions with seizure symptoms. Our approach to achieve this goal is scientifically driven, patient focused, ~~on developing impactful medicines for patients~~ and ~~families living~~coupled with an integrated and disciplined approach to research, clinical development and business development. Our team has significant experience with and understanding of rare epilepsies and neurological ~~disorders. We believe~~conditions, and we continue to gain insight into the ways the different molecular mechanisms and pathways underlying these disorders ~~represent an attractive area for drug development as~~impact the ~~understanding~~symptoms patients suffer. We have set out to be a leader in the field, and have developed a differentiated pipeline containing four novel mechanisms of ~~the underlying biology has grown meaningfully over the last few years~~action to target different causes of certain epilepsies and today represent a substantial opportunity medically and commercially. Based on the rapid increase in scientific understanding of the role of genetics and key biological pathways relevant to diseases of the brain ~~we aim to identify, discover and develop novel compounds for the treatment of rare neurological disorders.~~conditions with seizure symptoms. We have built a ~~deep knowledge~~scalable scientific platform with efficient development capabilities in epilepsies and conditions with seizure symptoms that focuses on clear, clinical endpoints. Three of ~~such diseases, how~~our programs are in clinical trials in humans, and the fourth is in preclinical development and anticipated to ~~treat them~~advance into human safety studies in 2024. We are initially pursuing therapeutic assets for rare disorders as they can leverage accelerated development programs. If successfully developed and ~~how~~marketed in rare conditions, we intend to explore these assets for broader neurologic indications. Our cohesive focus in certain epilepsies and brain conditions with seizure symptoms reinforces our belief that we can develop ~~the clinically meaningful endpoints required for development of a compound~~and produce multiple novel medicines, scale our infrastructure, and thereby succeed in ~~these disorders. As a result of this knowledge, we have developed a pipeline of first-in-class compounds and programs and have demonstrated~~ our model by progressing compounds through to late-stage development. We continue to execute on our strategy to build this pipeline by discovering in-licensing and collaborating with leading biopharmaceutical companies and academic institutions.

~~Our latest pipeline includes two late-stage programs and several earlier stage programs.~~

mission.

Since our inception in April 2014, we have devoted substantially all of our efforts to organizing and planning our business, building our management and technical team, acquiring operating assets and raising capital.

During the ~~year~~years ended December 31, ~~2020,~~2023 and 2022, we generated ~~$12.6~~$0.4 million and $1.5 million of ~~license~~royalty and ~~other~~licensing revenue, ~~through our Collaboration and License Agreement, or the Angelini License Agreement, with Angelini Pharma Rare Diseases AG, or Angelini, and~~respectively. We have otherwise primarily funded our business ~~primarily~~ through the sale of our capital ~~stock.~~stock and through the closing of the RLT Agreement with Takeda, which resulted in a one-time up-front payment of $196.0 million in 2021. Through December 31, ~~2020,~~2023, we have raised net proceeds of $275.4 million from the sale of our convertible preferred ~~stock~~ and ~~our~~ common stock. As of December 31, ~~2020,~~2023, we had ~~$72.0~~$105.8 million in cash, cash equivalents and ~~cash equivalents.~~marketable securities. We recorded net ~~losses~~loss of ~~$81.0~~$52.3 million and ~~$60.5~~$54.2 million for the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, respectively. As of December 31, ~~2020,~~2023, we had an accumulated deficit of ~~$294.2~~$277.9 million.

Revenue of $0.4 million was ~~$12.6~~recognized for the year ended December 31, 2023 related to royalties. Revenue was $1.5 million for the year ended December 31, ~~2020 as a result of revenue recorded in connection with the Angelini License Agreement. We did not generate any revenue during the year ended December 31, 2019.~~

2022 related to licensing and other agreements.

Research and development expenses were ~~$63.4~~$28.6 million for the year ended December 31, ~~2020~~2023 compared to ~~$42.2~~$24.6 million for the year ended December 31, ~~2019.~~ 2022. The increase of ~~$21.3~~$4.9 million in preclinical and development expenses was ~~primarily~~ due to ~~an increase in development~~additional activities related to our ongoing development programs,~~. During the year ended December 31, 2020, total research~~ primarily relating to OV888 (GV101) and ~~development expenses consisted~~OV329. The decrease of ~~$43.6 million in preclinical and development expenses, including a credit of $0.7 million representing costs reimbursable to the Company from Takeda in respect of the Takeda collaboration, $15.4~~$1.0 million in payroll and payroll-related expenses was primarily due to the impact of a reorganization in early 2022 which ~~$2.8 million related to stock-based compensation, and $4.4~~resulted in approximately $1.0 million in ~~other expenses.~~ ~~During~~severance costs during the year ended December 31, 2019, total research and development expenses consisted of $27.0 million in preclinical and development expenses, including a credit of $4.7 million representing costs reimbursed to us from Takeda in respect of the Takeda collaboration, $11.5 million in payroll and payroll-related expenses, of which $2.4 million related to stock-based compensation, and $3.6 million in other expenses.

period.

General and administrative expenses were ~~$30.6~~$31.1 million for the year ended December 31, ~~2020~~2023 compared to ~~$19.3~~$32.4 million for the year ended December 31, ~~2019.~~ 2022. The ~~increase~~decrease of ~~$11.4~~$1.3 million was primarily ~~consisted of increases in~~ due to reduced legal ~~fees, compliance and pre-commercialization expenses~~ and professional fees ~~of $8.2 million~~ and ~~payroll-related~~general office expenses, ~~of $3.5 million.~~

partially offset by an increase in non-cash compensation expenses.

As of December 31, ~~2020,~~2023 and 2022, we had total cash, cash equivalents and ~~short-term investments~~marketable securities of ~~$72.0~~$105.8 million ~~as compared to $76.7~~and $129.0 million, respectively. We believe that our cash, cash equivalents and marketable securities as of December 31, ~~2019.~~

~~On July 9, 2020, we entered into~~2023 will fund our projected operating expenses and capital expenditure requirements for at least 12 months from the Angelini License Agreement with Angelini, pursuant to which we granted to Angelini exclusive rights to develop and commercialize OV101 in the European Territory. Under the Angelini License Agreement, Angelini made an upfront payment and a milestone payment related to the transferissuance of a specified amount of compound and related information to the Company of $25.0 million during the year ended December 31, 2020. In addition, Angelini will be required to make additional milestone payments to us upon the completion of the specified components of the technology transfer, and achievement of specified regulatory milestones for OV101 in Angelman syndrome of up to $55.0 million in the aggregate, as well as up to €162.5 million ($199.9 million) in sales milestone payments for achievement of specified levels of net sales in the European Territory. Angelini also will be required to pay tiered royalties on net sales by Angelini, its affiliates or sublicensees at double-digit percentages above the teens, subject to certain standard reductions and offsets.

~~In November 2020, we filed a new shelf registration statement~~this Annual Report on Form S-3 (Registration No. 333-250054) that allows us to sell up to an aggregate of $250.0 million of our common stock, preferred stock, debt securities and/or warrants (the “S-3 Registration Statement”), which includes a prospectus covering the issuance and sale of up to $75.0 million of common stock pursuant to an at-the-market (“ATM”) offering program. As of December 31, 2020, we had $250.0 million available under our S-3 Registration Statement, including $75.0 million available pursuant to our ATM program.

In August 2020, we sold 6,250,000 shares of our common stock at a public offering price of $8.00 per share, for net proceeds of $46.7 million, after deducting underwriting discounts and commissions and other offering expenses payable by us, or the August 2020 Offering.

In February 2019, we sold 13,993,778 shares of our common stock and 2,500 shares of Series A Convertible Preferred Stock at a public offering price of $2.00 and $2,000 per share, respectively, for net proceeds of $30.5 million, after deducting underwriting discounts and commissions and other offering expenses payable by us, or the February 2019 Offering. In October and November 2019, we sold 10,350,000 shares of our common stock, which included the full exercise of the underwriters’ option to purchase additional shares, and 4,000 shares of Series A Convertible Preferred Stock at a public offering price of $2.50 and $2,500 per share, respectively, for net proceeds of $33.5 million after deducting underwriting discounts and commissions and other offering expenses payable by us, or the October 2019 Offering.

During the year ended December 31, 2019, we sold 6,893,888 shares of our common stock under our previous ATM program for net proceeds of $22.3 million after deducting sales agent commissions and other offering expenses payable by us, or the ATM Offering.

10-K.

Similar to other development-stage biotechnology companies, we have generated limited ~~revenue, which has been through the Angelini License Agreement.~~revenue. We have incurred losses and experienced negative operating cash flows in most years since our inception and anticipate that we will continue to incur losses for at least the next several years. We incurred net losses of ~~approximately $81.0~~$52.3 million and ~~$60.5~~$54.2 million for the ~~year~~years ended December 31, ~~2020~~2023 and ~~2019,~~2022, respectively. As of December 31, ~~2020,~~2023, we had an accumulated deficit of ~~$294.2~~$277.9 million and working capital of ~~$52.8~~$98.1 million.

~~Management has identified these conditions or events, which, considered in the aggregate, raise substantial doubt about~~

We believe that our ~~ability to continue as a going concern, including the risk that we will be unable to raise adequate additional capital~~available cash, cash equivalents and marketable securities are sufficient to fund ~~operations through at least the next 12 months from the date of filing of this Annual Report on Form 10-K. Management’s response to these conditions~~existing and events is that the successful closing of the Takeda License and Termination Agreement with Takeda (see note 12 of our Consolidated Financial Statements) will provide the liquidity needed to alleviate the substantial doubt referred to above. As described in note 12 of our Consolidated Financial Statements, there are certain conditions to close the Takeda License and Termination Agreement, however, management has determined that the likelihood of not closing inplanned cash requirements into the first half of ~~2021~~2026. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, clinical costs, legal and other regulatory expenses and general overhead costs. We have based our estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently expect. Additionally, the process of testing drug candidates in clinical trials is ~~remote. In~~costly, and the ~~event that~~timing of progress in these trials is uncertain. We cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether, or when, we ~~are unable to close the Takeda License and Termination Agreement,~~may achieve profitability.

As of December 31, 2023, we had no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancelable, purchase order basis. We cannot estimate whether we will ~~need to raise additional capital in order to~~

~~alleviate substantial doubt about our ability to continue~~receive or the timing of any potential contingent payments upon the achievement by us of clinical, regulatory and commercial events, as a going concern. The failure to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategy. If we are unable to raise capital,applicable, or royalty payments that we may be required to ~~delay, reduce~~make under license agreements we have entered into with various entities pursuant to which we have in-licensed certain intellectual property as contractual obligations or commitments, including agreements with AstraZeneca, Gensaic and Northwestern. Pursuant to these license agreements, we have agreed to make milestone payments up to an aggregate of $660.3 million upon the ~~scope~~achievement of ~~or eliminate research~~certain development, regulatory and ~~development programs, or obtain funds through arrangements~~sales milestones. We excluded these contingent payments from the consolidated financial statements given that the timing, probability, and amount, if any, of such payments cannot be reasonably estimated at this time.

In September 2021, we entered into a 10-year lease agreement for our corporate headquarters with ~~collaborators or others that may require us to relinquish rights to certain drug candidates that we might otherwise seek to develop or commercialize independently.~~

~~In addition to~~a term commencing March 10, 2022, for approximately 19,000 square feet of office space at Hudson Commons in New York, New York. The lease provides for monthly rental payments over the ~~proceeds we expect to receive upon closing~~lease term. The base rent under the lease is currently $2.3 million per year. Rent payments commenced January 10, 2023, and will continue for ten years following the rent commencement date. We issued a letter of credit in the amount of $1.9 million in association with the execution of the ~~Takeda License~~lease agreement, which is reflected as restricted cash on the consolidated balance sheets. Payment obligations under the lease agreement include approximately $2.3 million in the 12 months subsequent to December 31, 2023 and ~~Termination Agreement,~~approximately $23.5 million over the term of the agreement. For additional information see Note 5 to our consolidated financial statements under the heading 'Leases.'

We have no products approved for commercial sale and have not generated any revenues from product sales to date. Until such time, if ever, as we ~~plan~~can generate substantial product revenues, we expect to finance our cash needs through ~~either~~a combination of equity offerings, debt financings ~~collaborations, strategic alliances,~~and additional funding from license and collaboration arrangements. Except for any obligations of our collaborators to reimburse us for research and development expenses or ~~licensing~~to make milestone or royalty payments under our agreements ~~or a combination~~with them, we will not have any committed external source of ~~any such transactions.~~liquidity. To the extent that we raise additional capital through future equity offerings or debt financings, ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. There can be no assurance that such financings will be obtained on terms acceptable to us, if at all. ~~The ongoing COVID-19 pandemic continues~~Additionally, while the long-term economic impact of geopolitical tensions, including the war between Russia and Ukraine and war in Israel, is difficult to ~~rapidly evolve and~~assess or predict, each of these events has ~~already resulted in a~~caused significant ~~disruption of~~disruptions to the global financial ~~markets.~~markets and contributed to a general global economic slowdown. Furthermore, inflation rates have increased recently to levels not seen in decades. In addition, the U.S. Federal Reserve has raised interest rates in response to concerns about inflation. High interest rates, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. If the ~~disruption persists~~disruptions and ~~deepens,~~slowdown deepen or persist, we ~~could experience an inability~~may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ~~operations.~~ ability to pursue our business strategy. If we raise additional funds through collaborations, strategic alliances or licensing agreements with third parties for one or more of our current or future drug candidates, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or to grant licenses on terms that may not be favorable to us. Our failure to raise capital as and when needed would have a material adverse effect on our financial condition and our ability to pursue our business strategy.

See “Risk Factors” for additional risks associated with our capital requirements.

The following table summarizes our cash flows for the periods indicated:

Net cash used in operating activities was ~~$51.6~~$45.8 million for the year ended December 31, ~~2020,~~2023, which consisted of a net loss of ~~$81.0~~$52.3 million offset by a net of ~~$29.5~~$6.6 million of various non-cash charges and ~~indirect~~operating cash changes, ~~primarily related to $7.5~~most significantly $7.3 million ofin stock-based ~~compensation expense and $12.4 million of deferred revenue.~~compensation. Net cash used in operating activities was ~~$51.1~~$55.2 million for the year ended December 31, ~~2019,~~2022, which consisted of a net loss of ~~$60.5~~$54.2 million and $8.3 million decrease in accounts payable and accrued expenses, partially offset by ~~a net of $9.4 million of~~various non-cash charges and ~~indirect~~ cash ~~changes, primarily related to $5.2 million of stock-based compensation expense.~~

changes.

Net cash ~~provided by~~used in investing activities was ~~$34.6~~$2.6 million for the year ended December 31, ~~2020, compared~~2023, which was primarily related to ~~$30.0 million used~~our purchases and sales/maturities of investments in ~~investing activities for~~U.S. treasury funds and the purchase of a long-term equity investment. For the year ended December 31, ~~2019.~~ ~~The change~~2022, $87.9 million was used in ~~net cash provided by~~ investing activities, ~~was~~ primarily ~~due to the higher~~ comprised of purchases and sales/maturities of ~~short-term~~ investments ~~during the year ended December 31, 2020 compared to net purchases during the year ended December 31, 2019.~~

in U.S. treasury funds.

Net cash provided by financing activities ~~of $47.0~~was $30.5 million for the year ended December 31, ~~2020~~2023, which was primarily due to the ~~net proceeds from~~$30.0 million received in connection with the ~~August 2020 Offering. Net~~Ligand Agreement. For the same period in 2022, cash provided by financing activities ~~of $86.5~~was $0.2 million, ~~for the year ended December 31, 2019 was primarily due~~related to ~~the net~~ proceeds from the ~~February 2019 Offering, October 2019 Offering~~exercise of options and ~~ATM Offering.~~

~~Contractual Obligations~~purchases made under the employee stock purchase plan.

Our management’s discussion and analysis of ~~December 31, 2020, we agreed~~financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to ~~continue certain studies~~make estimates and assumptions that ~~were ongoing~~affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the ~~time of signing the Angelini License Agreement.~~ ~~In March 2021, we entered into the Takeda License and Termination Agreement~~ under which Takeda will secure global rights at closing from us to develop and commercialize the investigational medicine OV935 for the treatment of developmental and epileptic encephalopathies, including DS and LGS~~. Closing~~date of the ~~Takeda License~~consolidated financial statements, as well as the revenue and ~~Termination Agreement is subject to satisfaction of customary closing conditions,~~ ~~including regulatory review by~~expenses incurred during the ~~appropriate regulatory agencies~~reported periods. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience and on various other factors that we believe are reasonable under the ~~HSR Act~~. ~~We had no other material contractual obligations or commitments. We had no long-term debt or leases~~circumstances, the results of which form the basis for making judgments about the carrying value of assets and ~~no material non-cancelable~~

purchase commitments with service providers, as we have generally contracted on a cancelable, purchase order basis. We excluded any potential contingent payments upon the achievement by us of clinical, regulatory and commercial events, as applicable, or royalty payments that we may be required to make under license agreements we have entered into with various entities pursuant to which we have in-licensed certain intellectual property as contractual obligations or commitments, including agreements with H. Lundbeck A/S, Northwestern, and our Takeda license agreement. Pursuant to these license agreements, we have agreed to make milestone payments up to an aggregate of $279.3 million upon the achievement of certain development, regulatory and sales milestones. We excluded these contingent payments given that the timing, probability, and amount, if any, of such payments cannot be reasonably estimated at this time.

~~Off-Balance Sheet Arrangements~~

~~We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.~~

~~Emerging Growth Company Status and Smaller Reporting Company Status~~

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company until December 31, 2022. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companiesliabilities that are not ~~emerging growth companies. These exemptions include:~~

apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known.

~~reduced disclosure about~~Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies. Our critical accounting policies are described in greater detail in Note 2 to our ~~executive compensation arrangements;~~

We have listed below our critical accounting estimates that we ~~are no longer an emerging growth company.~~ believe to have the greatest potential impact on our consolidated financial statements. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results.

When accruing research and development expenses, we estimate the ~~our IPO, (c)~~time period over which services will be performed and the ~~date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (d) the date on which we are deemed~~level of effort to be expended in each period. If possible, we obtain information regarding unbilled services directly from our service providers. However, we may be required to estimate the cost of these services based only on information available to us. If we underestimate or overestimate the cost associated with a ~~large accelerated filer under the rules of the SEC.~~ ~~Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period for complying with new~~trial or ~~revised accounting standards.~~ service at a given point in time, adjustments to research and development expenses may be necessary in future periods. Historically, our estimated accrued research and development expenses have approximated actual expense incurred.

We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

~~In addition, we~~ are ~~also~~ a smaller reporting company as defined in the Exchange Act. ~~We may continue to be a smaller reporting company even after we are no longer an emerging growth company.~~ We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

~~Critical Accounting Policies and Estimates~~

Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the revenue and expenses incurred during the reported periods. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from these estimates under different assumptions or conditions.

During the year ended December 31, 2020, we recognized revenue. In addition, see Note 2 of our Consolidated Financial Statements under the heading “Recent Accounting Pronouncements” for new accounting pronouncements or changes to the accounting pronouncements during the year ended December 31, 2020.

~~Accrued Clinical Expenses~~

~~When preparing our consolidated financial statements,~~

As a smaller reporting company, we are ~~required~~permitted to ~~estimate~~comply with scaled-back disclosure obligations in our ~~accrued clinical expenses. This process involves reviewing open contracts~~SEC filings compared to other issuers, including with respect to disclosure obligations regarding executive compensation in our periodic reports and ~~communicating with our personnel~~proxy statements. We have elected to ~~identify services that have been performed on our behalf and estimating~~adopt the ~~level of service performed and the associated cost incurred for the service when we have not yet been invoiced or~~

otherwise notified of actual cost. Payments under some of the contracts we have with third parties depend on factors, such as successful enrollment of certain numbers of patients, site initiation and the completion of clinical trial milestones.

When accruing clinical expenses, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If possible, we obtain information regarding unbilled services directly from our service providers. However, we may be required to estimate the cost of these services based only on informationaccommodations available to us. If we underestimate or overestimate the cost associated with a trial or service at a given point in time, adjustments to research and development expenses may be necessary in future periods. Historically, our estimated accrued clinical expenses have approximated actual expense incurred.

~~Stock-Based Compensation~~

~~We account for stock-based compensation awards in accordance with the Financial Accounting Standards Board Accounting Standards Codification, or ASC, Topic 718,~~ ~~Compensation—Stock Compensation, or ASC 718 (see Note 2 of~~ ~~our Consolidated Financial Statements~~). ASC 718 requires all stock-based compensation awards to be recognized as expense based on their grant date fair values. We recognized expenses over the requisite service period, which is generally the vesting period of the award under the straight-line method. We account for forfeitures as they occur. We record the expense for stock-based compensation awards subject to performance-based milestone vesting over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at eachsmaller reporting ~~date.~~

~~We measure the grant-date fair value based on the Black-Scholes option-pricing model, which uses subjective assumptions and other inputs. These assumptions and inputs include:~~

~~Expected Volatility.~~ Due to the lack of sufficient volatility data, the expected volatility is estimated using weighted average measures of the historical volatility of a representative group of small, publicly traded drug development companies, ~~at a similar stage of development as ourselves.~~

~~Expected Term.~~ The expected term of the options outstanding is determined using the “simplified” method for “plain vanilla” options based on the mid-point between the vesting date and the end of the contractual term as prescribed by Staff Accounting Bulletin No. 107, ~~Share-Based Payment.~~

~~Risk-Free Interest Rate. The risk-free interest rate is based on U.S. Treasury notes with remaining terms similar to the expected term of the option.~~

~~Expected Dividends. The dividend yield assumption is zero since we have never paid cash dividends and do not plan to pay cash dividends in the foreseeable future.~~

~~Revenue Recognition~~

~~We recognize revenue under sublicense agreements in accordance with the ASC 606.~~ ~~We currently have one such agreement, the Angelini License Agreement. The terms of the agreement within this scope may contain multiple performance obligations,~~ including but not limited to:

The primary objectives of our investment activities are to ensure liquidity and to preserve capital. As of December 31, ~~2020,~~2023, we had cash, ~~and~~ cash equivalents and marketable securities of ~~$72.0 million that were held in an interest-bearing money market account.~~$105.8 million. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Due to the short-term maturities of our cash equivalents and marketable securities and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash ~~equivalents.~~equivalents and marketable securities. To minimize the risk in the future, we intend to maintain our portfolio of cash equivalents and marketable securities in institutional market funds that are comprised of U.S. Treasury and U.S. Treasury-backed repurchase ~~agreements.~~

agreements as well as treasury notes and high quality short-term corporate bonds.

Our financial statements, together with the report of our independent registered public accounting firm, appear in this Annual Report on Form 10-K beginning on page F-1.

None.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

As of December 31, ~~2020,~~2023, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our principal executive officer and principal financial officer have concluded based upon the evaluation described above that, as of December 31, ~~2020~~2023 our disclosure controls and procedures were effective at the reasonable assurance level.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management, under the supervision and with the participation of our Chief Executive Officer and Principal Financial and Accounting Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, ~~2020~~2023 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on the results of its evaluation, management concluded that our internal control over financial reporting was effective as of December 31, ~~2020.~~

2023.

There have been no changes in ~~our~~ internal ~~control~~controls over financial reporting during our most recent quarter ended December 31, ~~2020~~2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Not Applicable.

The information required by this item is incorporated by reference to the information set forth in the section titled “Executive Officer and Director Compensation” in our ~~2021~~2024 Proxy Statement.

The information required by this item is incorporated by reference to the information set forth in the section titled “Security Ownership of Certain Beneficial Owners and ~~Management~~Management” and “Equity Compensation Plan Information” in our ~~2021~~2024 Proxy Statement.

The information required by this item is incorporated by reference to the information set forth in the section titled “Transactions with Related Persons” and “Information Regarding the Board and Corporate Governance – Board Independence” in our ~~2021~~2024 Proxy Statement.

The information required by this item is incorporated by reference to the information set forth in Proposal 3 under the section titled “Independent Registered Public Accounting Firm Fees” and “Pre-Approval Policies and Procedures” contained in our ~~2021~~2024 Proxy Statement.

All schedules have been omitted because they are not required or because the required information is given in the Financial Statements or Notes thereto.

The exhibits listed below are filed as part of this Annual Report on Form 10-K.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.

Each person whose individual signature appears below hereby authorizes and appoints Jeremy M. Levin, DPhil, MB BChir and Jeffrey Rona, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Ovid Therapeutics Inc. (the “Company”) was incorporated under the laws of the state of Delaware, commenced operations on April 1, 2014, and maintains its principal executive office in New York, New York. The Company ~~commenced operations on April 1, 2014 (date of inception). The Company~~ is a biopharmaceutical company ~~focused exclusively on developing impactful medicines for patients~~that is dedicated to meaningfully improving the lives of people affected by certain epilepsies and ~~families living~~brain conditions with ~~rare neurological disorders.~~

seizure symptoms.

Since its inception, the Company has devoted substantially all of its efforts to business development, research and development, recruiting management and technical staff, and raising capital, and has financed its operations through the issuance of convertible preferred stock, ~~(“Preferred Stock”),~~ common stock and other equity ~~instruments.~~instruments, the sale and/or licensing of certain assets and the licensing of certain intellectual property. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development and regulatory success, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and the ability to secure additional capital to fund operations.

~~Historically, the~~

The Company’s major sources of cash have been ~~comprised of~~licensing revenue, proceeds from various public and private offerings of its capital stock, option exercises and interest income. As of December 31, ~~2020,~~2023, the Company had approximately ~~$72.0~~$105.8 million in cash, cash equivalents and ~~cash equivalents.~~marketable securities. Since inception, the Company has generated ~~$12.6~~$222.8 million in revenue, ~~as part of~~primarily from the Company’s royalty, license and ~~collaboration~~termination agreement ~~(the “Angelini License~~(“RLT Agreement”) with ~~Angelini Pharma Rare Diseases AG~~Takeda Pharmaceutical Company Limited (“~~Angelini”~~Takeda”). ~~The~~Historically, the Company has incurred recurring losses, has experienced recurring negative operating cash flows and ~~requires~~has required significant cash resources to execute its business ~~plans.~~ plans, which the Company expects will continue for the foreseeable future. The Company has an accumulated deficit of ~~$294.2~~$277.9 million as of December 31, ~~2020~~,2023, working capital of ~~$52.8~~$98.1 million and had cash ~~outflows from~~used in operating activities of ~~$51.6~~$45.8 million for the year ended December 31, ~~2020~~.

2023.

The Company ~~has incurred operating losses since inception~~recorded a net loss of $52.3 million during the year ended December 31, 2023 and expects to ~~continue to~~ incur ~~net~~ losses in subsequent periods for at least the next several ~~years and ongoing operations are~~years. The Company is highly dependent on ~~the Company’s~~its ability to ~~obtain~~find additional sources of ~~funding.~~funding through either equity offerings, debt financings, collaborations, strategic alliances, licensing agreements or a combination of any such transactions. Management ~~has identified these conditions or events, which, considered in the aggregate, raise substantial doubt about our ability to continue as a going concern, including the risk~~believes that the ~~Company~~Company’s existing cash, cash equivalents and marketable securities as of December 31, 2023 will be ~~unable to raise adequate additional capital~~sufficient to fund ~~operations~~its current operating plans through at least ~~the next~~ 12 months from the date of filing of ~~this~~the Company’s Annual Report on Form 10-K. ~~Management’s response~~Adequate additional funding may not be available to ~~these conditions~~the Company on acceptable terms or at all. The failure to raise capital as and ~~events is that the successful closing of the Takeda License and Termination Agreement with Takeda (see note 12) will provide the liquidity~~when needed to alleviate the substantial doubt referred to above. As described in note 12, there are certain conditions to close the Takeda License and Termination Agreement, however management has determined that the likelihood of not closing in the first half of 2021 is remote.

We have implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on our business. The extent to which the ongoing COVID-19 pandemic impacts our business, our clinical development and regulatory efforts, our corporate development objectives and the value of and market for our common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the U.S., Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The ~~global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic~~ could have a ~~material adverse effect~~negative impact on ~~our business,~~the Company’s financial condition ~~results~~and ability to pursue its business strategy. The Company may be required to delay, reduce the scope of ~~operations~~or eliminate research and ~~growth prospects.~~

~~In addition, we are~~development programs, or obtain funds through arrangements with collaborators or others that may require the Company to relinquish rights to certain drug candidates that the Company might otherwise seek to develop or commercialize independently.

The Company is subject to other challenges and risks specific to ~~our~~its business and ~~our~~its ability to execute on ~~our~~its strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with: ~~obtaining regulatory approval of our late-stage product candidates;~~ delays or problems in the supply of ~~our products,~~the Company's product candidates, loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; ~~and~~ the challenges of protecting and enhancing ~~our~~ intellectual property rights; complying with applicable regulatory ~~requirements. In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business~~requirements; and ~~results~~obtaining regulatory approval of ~~operations, it may also have the effect of heightening many~~any of the ~~other risks and uncertainties discussed above.~~

Company's product candidates.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Ovid Therapeutics Inc. and its ~~wholly-owned~~wholly owned subsidiary, Ovid Therapeutics Hong Kong Limited. All intercompany transactions and balances have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ materially from those estimates.

Marketable securities consist of investments in U.S. treasury instruments which are considered available-for-sale securities. The Company ~~is subject to risks common to companies in the development stage including, but not limited to, dependency on the clinical and commercial success of~~classifies its drug candidates, ability to obtain regulatory approval of its drug candidates, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and consumers, and significant competition and untested manufacturing capabilities.

~~(D) Deferred Transaction Costs~~

Deferred transaction costs, primarily consisted of direct incremental legal, accounting, and other fees related to the Company’s offering of its capital stock are capitalized as incurred. The deferred transaction costs are offset against proceeds upon the consummation of an offering.

~~(E) Comprehensive Loss~~

~~Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.~~

~~(F) Collaboration Arrangement~~

~~License and Collaboration Agreement with Takeda Pharmaceutical Company Limited~~

Under the terms of the current license and collaboration agreement with Takeda Ovid and Takeda are sharing 50/50 in the drug development, the Company records 50% of the development costs in research and development. When Ovid incurs the majority of the costs and Takeda transfers a payment to Ovid to equalize the costs, Ovid records the participation by Takeda as a reduction of its research and development expenses, as the parties under the collaboration are sharing in the costs and the payment represents reimbursement of costs by Takeda. When Takeda incurs the majority of the costs and Ovid transfers a payment to Takeda (to equalize the costs), Ovid records the participation in Takeda’s expenses as research and development costs in its statement of operations, as Ovid and Takeda are sharing in the research and development activities and this participation represents Ovid’s share of the research and development costs in the specific period.

~~(G) Cash and Cash Equivalents~~

The Company’s cash and cash equivalents consist of cash held in checking accounts and money market funds. The Company considers all highly liquid investments with an original maturity date of three months or less to be cash and cash equivalents. Accounts held at U.S. financial institutions are insured by the FDIC up to $250,000. Cash balances could exceed insured amounts at any given time.

~~(H) Short-term Investments~~

~~Short-term investments~~ ~~consist of debt~~marketable securities with maturities ~~greater~~of less than ~~three months~~one year from the balance sheet date ~~of purchase.~~as current assets on its consolidated balance sheets. The Company classifies ~~all~~ its marketable securities with original maturities of less than three months as cash equivalents on its ~~investments as available-for-sale securities. Debt securities are recorded at fair value with unrealized~~consolidated balance sheets. Unrealized gains and losses ~~included in~~on these securities that are determined to be temporary are reported as a separate component of accumulated other comprehensive income (loss) in stockholders' equity.

The Company classifies as restricted cash all cash pledged as collateral to secure long-term obligations and all cash for which use is otherwise limited by contractual provisions. Amounts are reported as non-current unless restrictions are expected to be released in the next 12 months.

Long-term equity investments consist of equity investments in the preferred shares of Gensaic, Inc., formerly M13 Therapeutics, Inc. (“Gensaic”), and Graviton Bioscience Corporation (“Graviton”), both privately held corporations. The preferred shares are not considered in-substance common stock, and the investments are accounted for at cost, with adjustments for observable changes in prices or impairments, and are classified within long-term equity investments on the consolidated balance sheets with adjustments recognized in other income (expense), net on the consolidated statements of operations. The Company has determined that these equity investments do not have a readily determinable fair value and elected the measurement alternative. Therefore, the carrying amount of the equity investments will be adjusted to fair value at the time of the next observable price change for the identical or similar investment of the same issuer, or when an impairment is recognized. Each reporting period, the Company performs a qualitative assessment to evaluate whether the investments are impaired. The assessment includes a review of recent operating results and trends, recent sales/acquisitions of the investees' securities, and other publicly available data. If an investment is determined to be impaired, the Company will then write it down to its estimated fair value. As of December 31, 2023 and 2022, the equity investment in Gensaic had a carrying value of $5.1 million. As of December 31, 2023, the equity investment in Graviton had a carrying value of $11.2 million, which reflects a $1.2 million unrealized gain recognized during the year and recorded in other income (expense), net, in the consolidated statements of operations due to an observable change in price.

The Company determines if an arrangement is a lease at inception and recognizes the lease in accordance with ASC 842, Lease Accounting. Operating leases are included ~~within net loss.~~

in right-of-use (“ROU”) assets, current portion, lease liability and long-term lease liability in the Company's consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. The Company determines the portion of the lease liability that is current as the difference between the calculated lease liability at the end of the current period and the lease liability that is projected 12 months from the current period.

Property and equipment are stated at cost and depreciated over their estimated useful lives of three years using the straight-line method. ~~Repairs~~Repair and maintenance costs are expensed. The Company reviews the recoverability of all long-lived assets, including the related useful life, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable.

The Company expenses the cost of research and development as incurred. Research and development expenses ~~comprise~~are comprised of costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and ~~pre-clinical~~preclinical materials as well as ~~other~~ contracted services, license fees, and other external costs. Research and development expenses also include the cost of licensing agreements acquired from third-parties. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received ~~rather than when the cost is incurred,~~ in accordance with ASC 730, Research and Development.

The Company accounts for its stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, which establishes accounting for stock-based awards granted to employees for services and requires

The Company accounts for ~~options~~option awards granted to nonemployee consultants and directors in accordance with ~~ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.~~ASC 718. The fair value of the option issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock award at the earlier of the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete.

The Company accounted for its sale to Ligand Pharmaceuticals Incorporated (“Ligand”) of a 13% share of royalties and milestones owed to the Company related to the potential approval and commercialization of soticlestat in accordance with ASC 470, Debt, which addresses situations in which an entity receives cash from an investor in return for an agreement to pay the investor a specified percentage of the revenue from a contractual right. The Company classified the proceeds received from the sale to Ligand as debt as the Company determined that it had significant continuing involvement in the generation of the cash flows to Ligand. The Company further elected to account for the debt at fair value in accordance with ASC 825, Financial Instruments,

~~Financial Accounting Standards Board (“FASB”) guidance specifies~~ which permits a ~~hierarchy of valuation techniques based on whether the inputs~~company to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

~~The three levels of~~elect the fair value ~~hierarchy are~~option on an instrument specific basis for a recognized financial liability that is not specifically excluded.

If commercialized, the Company will recognize 100% of the royalties and milestones received for sales of soticlestat as ~~follows:~~

~~Level 1—Unadjusted quoted prices~~revenue and the 13% share of royalties payable to Ligand Pharmaceuticals as a cash outflow from financing activities in ~~active markets~~the consolidated statements of cash flows. Changes in the fair value of the debt will be classified as a component of other income / expense in the consolidated statements of operations. The change in fair value of the debt was immaterial for ~~identical assets or liabilities that~~ the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. The Company’s Level 1 assets consisted of money market funds and short-term investments totaling $70.1 million and $76.2 million as ofyear-ended December 31, ~~2020 and 2019, respectively.~~

2023.

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had no Level 2 assets or liabilities as of December 31, 2020 and 2019.

Level 3—Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company had no Level 3 assets or liabilities as of December 31, 2020 and 2019.

The carrying amounts reported in the balance sheets for cash and cash equivalents, related-party receivables, other current assets, accounts payable, accrued expenses, and current related-party payables approximate their fair value based on the short-term maturity of these instruments.

(M) Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires deferred tax assets and liabilities to be recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts and respective tax bases of existing assets and liabilities, as well as for net operating loss carryforwards and research and development ~~credit.~~credits. Valuation allowances are provided if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of a change in ~~the~~ tax laws is recorded in the period in which the law is enacted.

Net loss per common share is determined by dividing net loss attributable to common stockholders by the basic and diluted weighted-average common shares outstanding during the period. ~~For all periods presented,~~The Company applies the two-class method to allocate earnings between common stock and participating securities.

Net loss per diluted share attributable to common stockholders adjusts the basic earnings per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potential dilutive impact of stock options ~~have been excluded from~~using the ~~calculation because their effect would be anti-dilutive. Therefore,~~treasury-stock method and the ~~weighted-average shares outstanding used to calculate both basic and diluted loss per common share are~~potential impact of preferred stock using the ~~same.~~ Under the terms of the Series A Preferred Stock issued in 2019, Preferred stockholders do not share in losses of the Company and have no obligation to fund losses or transfer assets. Since there is a loss, diluted EPS should be computed in the same manner as basic EPS and because no potential common shares shall be included in the computation of any diluted per-share amounts when a loss exists, the Series A Preferred Stock should be excluded from the computation of basic and diluted EPS.

if-converted method.

The Company maintains a 401(k)-retirement plan for its employees that is intended to qualify under Sections 401(a) and 501(a) of the U.S. Internal Revenue Code of 1986, as amended (“Code”). The Company provides all active employees with a 100% matching contribution equal to 3% of an employee’s eligible deferred compensation ~~deferred~~ and a 50% matching ~~contributions~~contribution on employee contributions that are between 3% and 5% of an employee’s eligible ~~compensation deferred.~~deferred compensation. These safe harbor contributions vest immediately. For the years ended December 31, ~~2020~~2023 and ~~2019~~2022 the Company contributed ~~$321,000~~$311,640 and ~~$285,000,~~$339,405, respectively.

~~(Q)~~

Under ASC 606, Revenue from Contracts with Customers, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. In applying ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the promises and performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) ~~it satisfies~~ the performance ~~obligations.~~obligations are satisfied. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services ~~we transfer~~transferred to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved.

If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price. The standalone selling price is generally determined using expected cost and comparable transactions. Revenue for performance obligations recognized over time is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure.

Non-refundable upfront fees allocated to licenses that are not contingent on any future performance and require no consequential continuing involvement by the Company, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. The Company defers recognition of upfront license fees if the performance obligations are not satisfied.

(R)

The Company has reviewed recently issued accounting standards ~~which have been adopted~~

~~In June 2016,~~and plans to adopt those that are applicable. The Company does not expect the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This new standard requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including loans and trade and other receivables. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The standard also amends the impairment model for available-for-sale debt securities and requires entities to determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Under the new guidance, an entity recognizes an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as was previously required. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. As of December 31, 2020, the Company did not hold any debt securities with

~~credit losses, nor does it have any trade receivables. The~~ adoption of ~~this standard effective January 1, 2020 did not~~those standards to have a material impact on ~~the Company’s consolidated~~its financial ~~statements.~~

~~On August 29, 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other - Internal-Use Software (Subtopic 350-40) - which amends ASC 350-40~~position, results of operations or cash flows.

The Company adopts new pronouncements relating to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. ASU No. 2018-15 aligns the accounting for costs incurred to implement a CCA that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of a CCA that is a service contract and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in a CCA that is considered a service contract. AccordingGAAP applicable to the ~~standard~~Company as they are issued, and based upon the ~~balance sheet line item for~~effective dates included in the ~~presentation of capitalized implementation costs should be the same as~~pronouncements. Management does not believe that for the prepayment of fees related to the hosting arrangement and the manner in which an entity classifies the cash flows related to capitalized implementation costs should be the same as that in which it classifies the cash flows for the fees related to the hosting arrangement. ASU 2018-15 isany recently issued, but not yet effective for the Company for fiscal years beginning after December 15, 2019, including interim periods therein. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance. The adoption of this standard effective January 1, 2020 did not have a material impact on the Company’s consolidated financial statements and wasaccounting standards, if currently adopted, ~~prospectively.~~

On November 5, 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808), - which amends ASC 808 to clarify when transactions between participants in a collaborative arrangement under ASC 808 are within the scope of the FASB’s new revenue standard, ASU 2014-09 (codified in ASC 606). The amendments require the application of ASC 606 existing guidance to determine the units of account that are distinct in a collaborative arrangement for purposes of identifying transactions with customers. If a unit of account within the collaborative arrangement is distinct and is with a customer, an entity shall apply the guidance in Topic 606 to that unit of account. In a transaction between collaborative participants, an entity is precluded by ASU 2018-18 from presenting a transaction together with “revenue from contracts with customers” unless the unit of account is within the scope of ASC 606 and the entity applies the guidance in ASC 606 to such unit of account. The amended guidance is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The retrospective adoption of this standard effective January 1, 2020 did not have a material impact on the Company’s consolidated financial statements.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which updates various codification topics by clarifying or improving disclosure requirements. ASU 2020-10 is effective for annual and interim periods beginning after December 15, 2020. The Company early adopted ASU 2020-10 for the reporting period ending December 31, 2020. The adoption of this update did notwould have a material effect on the ~~Company s~~accompanying consolidated financial statements.

The following tables summarize the fair value of cash, cash equivalents and ~~short-term investments,~~marketable securities as well as gross unrealized holding gains and losses as of December 31, ~~2020~~2023 and ~~December 31, 2019:~~

December 31, 2020

Amortized

Gross unrealized

Gross unrealized

Fair

cost

holding gains

holding losses

value

  Cash

$
1,977,320

$
-

$
-

$
1,977,320

  Money market funds

70,056,610

-

-

70,056,610

Total cash and cash equivalents

$
72,033,930

$
-

$
-

$
72,033,930

  U.S. treasury notes

$
-

$
-

$
-

-

Total short-term investments

$
-

$
-

$
-

$
-

2022:


	December 31, 2023
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Fair value
Cash	$	2,701,396	$	—	$	—	$	2,701,396
Money market funds	24,340,121		—		—		24,340,121
Marketable securities	78,791,156		702		—		78,791,858
Total cash, cash equivalents and marketable securities	$	105,832,673	$	702	$	—	$	105,833,375

December 31, 2019

Amortized

Gross unrealized

Gross unrealized

Fair

cost

holding gains

holding losses

value

  Cash

$
501,537

$
-

$
-

$
501,537

  Money market funds

41,395,607

-

-

41,395,607

Total cash and cash equivalents

$
41,897,144

$
-

$
-

$
41,897,144

  U.S. treasury notes

$
34,839,500

$
2,469

$
-

34,841,969

Total short-term investments

$
34,839,500

$
2,469

$
-

$
34,841,969

F-12


	December 31, 2022
	Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Fair value
Cash	$	2,853,042	$	—	$	—	$	2,853,042
Money market funds	42,014,804		—		—		42,014,804
Marketable securities	84,175,752		—		(42,187)		84,133,565
Total cash, cash equivalents and marketable securities	$	129,043,598	$	—	$	(42,187)	$	129,001,411

The Company did not hold any securities that were in an unrealized loss position for more than 12 months as of December 31, ~~2020~~2023 and ~~2019.~~

2022.

There were no material realized gains or losses on available-for-sale securities during the years ended December 31, ~~2020~~2023 and ~~2019.~~

2022.

NOTE 4 – PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

Property and equipment is summarized as follows:

		December 31,			December 31,
		2020			2019
	December 31, 2023							December 31, 2023	December 31, 2022
Furniture and equipment		$	320,957		$	193,717
Leasehold improvements
Less accumulated depreciation			(185,337	)		(125,354	)
Total property, plant and equipment, net		$	135,620		$	68,363
Total property and equipment, net

Depreciation expense was ~~$60,000~~$419,518 and ~~$39,000~~$319,173 for the years ended December 31, ~~2020~~2023 and ~~2019~~2022 respectively.

Intangible assets, net of accumulated amortization, were ~~$319,000~~$182,974 and ~~$467,000~~$222,100 as of December 31, ~~2020~~2023 and ~~December 31, 2019,~~2022, respectively, and are included in other assets. Amortization expense was ~~$247,000~~$148,764 and ~~$216,000~~$193,333 for the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, respectively.

Accrued expenses consist of the following:

The Company’s capital structure consists of common stock and ~~Preferred Stock.~~preferred stock. Pursuant to the Company’s amended and restated certificate of incorporation, as amended, the Company is authorized to issue up to 125,000,000 shares of common stock and 10,000,000 shares of ~~Preferred Stock.~~preferred stock. The Company has designated 10,000 of the 10,000,000 authorized shares of ~~Preferred Stock~~preferred stock as non-voting Series A Convertible Preferred Stock (“Series A Preferred Stock”).

The holders of common stock are entitled to one vote for each share held. The holders of common stock have no preemptive or other subscription rights, and there are no redemption or sinking fund provisions with respect to such shares. Subject to preferences that may apply to any outstanding series of ~~Preferred Stock,~~preferred stock, holders of the common stock are entitled to receive ratably any dividends declared on a non-cumulative basis. Shares of Series A Preferred Stock will be entitled to receive dividends at a rate equal to (on an as-if-converted-to-common stock basis), and in the same form and manner as, dividends actually paid on shares of common stock. The common stock is subordinate to all series of Preferred Stock with respect to rights upon liquidation, winding up and dissolution of the Company. The holders of common stock are entitled to liquidation proceeds after all liquidation preferences for the ~~Preferred Stock~~preferred stock are satisfied.

Through December 2020, entities affiliated with Biotechnology Value Fund, L.P. elected to convert an aggregate of 2,256 shares of Series A Preferred Stock owned by such holders into an aggregate of 2,256,000 shares of the Company’s common stock.

~~In August 2020,~~31, 2023, the Company sold 6,250,000 shares of its common stock at a public offering price of $8.00 per share, for net proceeds of $46.7 million after deducting underwriting discounts and commissions and other offering expenses payable by the Company, (the “August 2020 Offering”).

In May 2020, entities affiliated with Biotechnology Value Fund, L.P. elected to convert an aggregate of 2,256 shares of Series A Preferred Stock owned by such holders into an aggregate of 2,256,000 shares of the Company’s common stock.

In October and November 2019, the Company sold 10,350,000 shares of its common stock, which included the full exercise of the underwriters’ option to purchase additional shares, and 4,000 shares of Series A Preferred Stock at a public offering price of $2.50 and $2,500 per share, respectively, for net proceeds of $33.5 million after deducting underwriting discounts and commissions and other offering expenses payable by the Company, (the “October 2019 Offering”).

In September 2019, the Company entered into an exchange agreement with entities affiliated with Biotechnology Value Fund, L.P. (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,262,000 shares of the Company’s common stock owned by the Exchanging Stockholders for an aggregate of 1,262 shares of the Company’s Series A Preferred Stock (the “Exchange Shares”). The Exchange Shares were issued without registration under the Securities Act of 1933, as amended, in reliance on the exemption from registration contained in Section 3(a)(9) of the Securities Act.

In February 2019, the Company sold 13,993,778 shares of its common stock and 2,500 shares of Series A Preferred Stock at a public offering price of $2.00 and $2,000 per share, respectively, for net proceeds of $30.5 million after deducting underwriting discounts and commission and other offering expenses payable by the Company (the “February 2019 Offering”).

~~Dividends~~

has not declared any dividends. No dividends on the common stock shall be declared and paid unless dividends on the ~~Preferred Stock~~preferred stock have been declared and paid. ~~Through December 31, 2020, the Company has not declared any dividends.~~

The Company’s Board of Directors (the “Board”) adopted and approved the 2014 Equity Incentive Plan ~~(the “2014~~(“2014 Plan”), which authorized the Company to grant shares of common stock in the form of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock and restricted stock units. The types of stock-based awards, including share purchase rights amount, terms, and ~~exercisability~~ provisions offor exercising grants ~~are~~were determined by the ~~Company’s~~Board.

The Board ~~of Directors.~~

~~The Company's Board of Directors~~ adopted, and the Company's stockholders approved, the 2017 equity incentive plan (“2017 Plan”), which became effective ~~immediately prior to the execution of the underwriting agreement related to the IPO~~ on May 4, 2017. The initial reserve of shares of common stock ~~that may be issued~~ under the 2017 Plan was 3,052,059 shares. The 2017 Plan provides

for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance-based stock awards, and other forms of stock-based awards. Additionally, the 2017 Plan provides for the grant of performance ~~cash~~ awards. The Company's employees, officers, directors, ~~and~~ consultants and advisors are eligible to receive awards under the 2017 Plan. Upon the adoption of the 2017 Plan, no further awards ~~will be~~were granted under the 2014 Plan. Pursuant to the terms of the 2017 Plan, on each January 1st, the plan limit shall be increased by the lesser of (x) 5% of the number of shares of common stock outstanding as of the immediately preceding December 31 and (y) such lesser number as the Board ~~of Directors~~ may determine in its discretion. On January 1, ~~2019,~~2022, an additional ~~1,232,705~~1,000,000 shares were reserved for issuance under the 2017 Plan. On January 1, 2023, an additional 3,523,344 shares were reserved for issuance under the 2017 Plan. As of December 31, ~~2019,~~2023, there were ~~2,199,765~~4,400,759 shares of the Company’s common stock reserved for issuance under the 2017 Plan. On January 1, ~~2020,~~2024, an additional ~~2,735,516~~3,534,600 shares were reserved for issuance under the 2017 Plan. ~~As of December 31, 2020, there were 1,771,772 shares of the Company’s common stock reserved for issuance under the 2017 Plan.~~

The ~~Company's~~ Board ~~of Directors~~ adopted, and the Company's stockholders approved the 2017 employee stock purchase plan ~~(the “2017~~ (“ESPP”), which became effective ~~immediately prior to the execution of the underwriting agreement related to the IPO~~ on May 4, 2017. The initial reserve of shares of common stock that may be issued under the ~~2017~~ ESPP was 279,069 shares. ~~On September 20, 2017, the Company’s Compensation Committee approved an offering period under the 2017 ESPP, which began on October 20, 2017.~~ The ESPP allows employees to purchase common stock of the Company at a 15% discount to the market price on designated purchase dates. During the years ended December 31, ~~2020~~2023 and ~~2019, 105,464~~2022, 63,761 and ~~80,542~~76,455 shares were purchased under the ESPP and the Company recorded expense of ~~$152,973~~$57,148 and ~~$109,319,~~$85,319, respectively. The number of shares of common stock reserved for issuance under the ~~2017~~ ESPP will automatically increase on January 1 of each year, beginning on January 1, 2018 and continuing through and including January 1, 2027, by the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, (ii) 550,000 shares or (iii) such lesser number of shares determined by ~~our~~the Board. OnThe Board acted prior to January 1, ~~2019, an additional 246,541~~2024 to provide that there be no increase in the number of shares ~~were~~ reserved for issuance under the ~~2017~~ ESPP. ~~No shares were reserved for issuance under the 2017 ESPP during the year ended December 31, 2020.~~ As of December 31, ~~2020,~~2023 and 2022, there were ~~553,552~~352,846 and 416,607 shares of the Company’s common stock reserved for issuance under the ~~2017~~ ESPP.

Unless specified otherwise in an individual option agreement, stock options granted under the 2014 Plan and 2017 Plan ~~generally~~ have a ten-year term and a four-year graded vesting period. The vesting requirement is generally conditioned upon the grantee’s continued service with the Company during the vesting period. Once vested, all ~~awards~~options granted are exercisable from the date of grant until they expire. The option grants are non-transferable. Vested options ~~generally~~ remain exercisable for 90 days under the 2017 Plan and 30 days under the 2014 Plan subsequent to the termination of the option holder’s service with the Company. In the event of the option holder’s death or disability while employed by or providing service to the Company, the exercisable period extends to 18 months or 12 ~~months.~~

months, respectively under the 2017 Plan and 6 months under the 2014 Plan..

Performance-based option awards generally have similar vesting terms, with vesting occurring on the date the performance condition is achieved and expire in accordance towith the specific terms of the agreement. At December 31, ~~2020,~~2023 and 2022, there were ~~125,000~~zero and 100,000 performance-based options outstanding and unvested, respectively, that include options to vest upon the achievement of certain research and development ~~milestones~~.

milestones.

All assumptions used to calculate the grant date fair value of nonemployee options are generally consistent with the assumptions used for options granted to employees. In the event the Company terminates any of its consulting agreements, the unvested options underlying the agreements would also be cancelled.

The Company granted ~~10,000~~45,000 and ~~175,000~~zero stock options to nonemployee consultants for services rendered during the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, respectively. There were ~~32,500~~98,542 and ~~145,204~~127,459 unvested nonemployee options outstanding as of December 31, ~~2020~~2023 and ~~2019,~~2022, respectively. Total expense recognized related to the nonemployee stock options for the years ended December 31, ~~2020~~2023 and ~~2019~~2022 was ~~$257,431~~$202,114 and ~~$51,666,~~$575,995, respectively. During the year ended December 31, 2019, the Company recognized a credit of $17,000 related to the nonemployee stock options including the modification of certain options in connection with the separation and consulting agreement with Dr. During (see Note 11). Total unrecognized compensation expenses related to the nonemployee stock options was ~~$186,823~~$133,769 and $626,977 as of December 31, ~~2020.~~2023 and 2022, respectively. During the years ended December 31, ~~2020,~~2023 and ~~2019, the Company recognized $115,240 and zero, respectively, in~~2022, there were no expenses for nonemployee performance-based option ~~awards.~~

awards recognized.

The Company granted ~~3,573,160~~2,993,000 and ~~3,372,513~~4,575,641 stock options to employees during the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, respectively. There were ~~4,975,262~~5,376,910 and ~~3,963,544~~6,090,889 unvested employee options outstanding as of December 31, ~~2020~~2023 and ~~2019,~~2022, respectively. Total expense recognized related to the employee stock options for the years ended December 31, ~~2020~~2023 and ~~2019~~2022 was ~~$7.1~~$7.5 million and ~~$5.0~~$5.9 million, respectively. Total unrecognized compensation expense related to employee stock options was ~~$12.2~~$9.3 million and $11.5 million as of December 31, ~~2020.~~2023 and 2022, respectively. During the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, the Company recognized ~~$2,340,808~~zero and ~~$9,391~~$0.1 million, respectively, in expenses for employee performance-based option awards.

The Company’s stock-based compensation expense was recognized in operating expenses as follows:

The fair value of employee options granted during the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, respectively, was estimated by utilizing the following assumptions:

The fair value of nonemployee options granted and remeasured during the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, respectively, was estimated by utilizing the following assumptions:

At December 31, ~~2020,~~2023, there was ~~$12.3~~$9.4 million of unamortized ~~share–based~~stock-based compensation expense, which is expected to be recognized over a remaining average vesting period of ~~3.04~~2.23 years.

At December 31, 2022, there was $12.1 million of unamortized stock-based compensation expense, which is expected to be recognized over a remaining average vesting period of 2.26 years.

At December 31, ~~2020,~~2023, the Company has available ~~approximately $238.6~~$150.2 million and ~~$186.7~~$190.2 million of unused ~~NOL~~net operating loss (“NOL”) carryforwards for federal and state tax purposes, respectively, that may be applied against future taxable income. The Company also has ~~approximately $165.4~~$163.9 million of unused NOL carryforwards for New York City purposes. The NOL carryforwards will begin to expire in the year ~~2035~~2037 if not utilized prior to that date. ~~There is no provision for~~

Under Section 382 and Section 383 of the Internal Revenue Code of 1986, if a corporation undergoes an ownership change, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income ~~taxes because~~may be limited. On each of August 10, 2015 and February 22, 2019 the Company experienced an ownership change. The Company anticipates a significant portion of its pre-change NOLs to be limited, however has ~~historically incurred operating losses and~~not yet completed a formal Section 382 analysis subsequent to the last ownership change.

The Company maintains a full valuation allowance against its net deferred tax assets. The valuation allowance increased by ~~approximately $13.3~~$18.9 million and ~~$22.5~~$10.4 million during the years ~~2020~~2023 and ~~2019,~~2022, respectively.

The ~~Company may be subject~~increase in valuation allowance in 2023 is primarily due to ~~the~~increases in NOL ~~utilization provisions~~carryforwards and capitalized research and experimental costs.

The tax effects of ~~Section 382~~temporary differences that gave rise to significant portions of the ~~Code. The effect of an ownership change would be the imposition of an annual limitation on the use of NOL carryforwards attributable to periods before the change. The amount~~deferred tax assets and liabilities were as follows:

A reconciliation of the ~~annual limitation depends upon the value of the Company immediately before the change, changes~~statutory U.S. Federal rate to the Company’s capital during a specified period prior to the change, and the federal published interest rate. The Company has not completed a Section 382 analysis to determine if a change in ownership has occurred. Until an analysiseffective tax rate is ~~completed, there can be no assurance that the existing net operating loss carry-forwards or credits are not subject to significant limitation.~~

as follows:

The Company’s reserves related to taxes are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies related to the tax benefit. For the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, the Company had no unrecognized tax benefits or related interest and penalties accrued. The Company has not yet conducted a study of research and development credit carryforwards. This study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed, and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement of operations if an adjustment were required. The Company would recognize both accrued interest and penalties related to unrecognized benefits in provision for income ~~tax~~

~~expense.~~taxes. The Company’s uncertain tax positions yet to be determined would be related to years that remain subject to examination by relevant tax authorities. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S. federal, state and local income tax authorities for all tax years in which a loss carryforward is available.

~~The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities were as follows:~~

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company is not currently involved in any legal matters arising in the normal course of business.

Under the terms of their respective employment agreements, each of ~~our~~the Company's named executive officers is eligible to receive severance payments and benefits upon a termination without “cause” or due to “permanent disability,” or upon “resignation for good reason,” contingent upon the named executive officer’s delivery to the Company of a satisfactory release of claims, and subject to the named executive officer’s compliance with non-competition and non-solicitation restrictive covenants for two years following the termination date.

Pursuant to the Northwestern agreement, Northwestern granted the Company an exclusive license to certain patent rights and know-how, including a patent application covering a specified composition of matter (the “Patent Application”). Northwestern previously entered into a license agreement with Catalyst Pharmaceuticals, Inc. (“Catalyst”), dated August 27, 2009, pursuant to which Northwestern granted Catalyst rights under certain intellectual property rights covering a different composition of matter (the “Catalyst License”). In addition, the Company is a party to a confidential disclosure agreement with Catalyst, dated September 16, 2016 (the “CDA”). On June 25, 2018, Catalyst sent a letter to Northwestern and the Company alleging, among other things, that Northwestern breached the Catalyst License by licensing the Patent Application to the Company. Catalyst’s letter also asserted that the Company had breached its obligations under the CDA by allegedly failing to disclose that the Company had a license to the Patent Application, and that a further breach would occur if the Company makes any use of information obtained under the CDA in connection with its development program arising from the rights granted under the license agreement. Catalyst has asserted that the combined conduct of Northwestern and the Company gives rise to various claims, including breach of contract, fraud, and tortious interference. The Company believes that Catalyst’s claims are without merit and responded by letter dated June 28, 2018, which denies any and all liability to Catalyst, and further denies that Catalyst has been damaged in any way. On May 20, 2019, the Company entered into a Settlement Agreement with Catalyst (the “Settlement Agreement”), pursuant to which Catalyst released the Company from any and all claims, known or unknown, arising from or related to the dispute between Catalyst and Northwestern, the license agreement, and/or the claims that Catalyst asserted against the Company in the June 25, 2018 letter. Under the Settlement Agreement the Company retains all rights and privileges previously granted to the Company under the Northwestern license agreement.

The following tables summarizes the calculation of basic and ~~an exclusive license under our relevant intellectual property rights and~~ ~~global rights at closing~~diluted net loss per share:


			Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS					ii 1

			PART I
Item 1.		Business	3
Item 1. 1A.			~~Business~~	1
~~Item 1A.~~	Risk Factors		23 25
Item 1B.			Unresolved Staff Comments			59 60
Item 2. 1C.		C ybersecurity	~~Properties~~60			59
Item 2.		Properties	61
Item 3.			Legal Proceedings			59 61
Item 4.			Mine Safety Disclosures			59 61

			PART II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and ~~Issuers~~Issuer Purchases of Equity Securities			60 62
Item 6.		[Reserved]	~~Selected Financial Data~~63			61

Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			62 63
Item 7A.			Quantitative and Qualitative Disclosures ~~about~~About Market Risk			70
Item 8.			Financial Statements and Supplementary Data			70 71
Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			70 71
Item 9A.			Controls and Procedures			70 71
Item 9B.			Other Information			70 71
Item 9C.		Disclosure Regarding Foreign Jurisdictions that Prevent Inspections				71
			PART III
Item 10.			Directors, Executive Officers and Corporate Governance			71 72
Item 11.			Executive Compensation			71 72
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			71 72
Item 13.			Certain Relationships and Related Transactions, and Director Independence			71 72
Item 14.			Principal Accountant Fees and Services			71 72

			PART IV
Item 15.			~~Exhibits~~Exhibit and Financial Statement Schedules			72 73
Item 16.			Form 10-K Summary			74 76

Trial	Purpose	Design	Number of Volunteers	Dosage
1	Safety and tolerability	Phase 1, randomized, double-blind, placebo-controlled, single ascending dose trial	48	15-1,350mg, oral

2	Safety and tolerability	Phase 1, randomized, double-blind, placebo-controlled, multiple ascending dose trial	40	100-600mg QD, and 300mg BID, 14 days, oral

3	Brain CH24H enzyme occupancy using positron emission tomography, or PET	Open-label, non-randomized	11	50-600mg, oral

4	Relative bioavailability of tablet versus solution formulation; effect of food	Phase 1, randomized, open-label, single dose trial	9	300mg (tablet), oral; 300mg (solution), oral


	~~Weeks 1-12~~	~~Weeks 13-24~~	~~Weeks 25-36~~	~~Weeks 37-48~~
~~Overall median % reduction in seizure frequency from baseline~~	48% (n=6)	65% (n=6)	84% (n=6)	90% (n=4)*

		Year Ended			Year Ended
		December 31,			December 31,
		2020			2019			Change $
		(in thousands)
	Year Ended December 31, 2023										Year Ended December 31, 2023	Year Ended December 31, 2022		Change $
	(in thousands)												(in thousands)
Revenue:
License and other revenue		$	12,617		$	-		$	12,617
License and other revenue
License and other revenue
Total revenue
Operating expenses:
Research and development
Research and development
Research and development			63,417			42,157			21,260
General and administrative			30,631			19,252			11,379
Total operating expenses			94,048			61,409			32,639
Loss from operations			(81,431	)		(61,409	)		(20,022	)
Other income, net			395			948			(553	)
Other income (expense), net
Loss before provision for income taxes
Provision for income taxes
Net loss		$	(81,036	)	$	(60,461	)	$	(20,575	)

		Year Ended		Year Ended
		December 31,		December 31,
		2020		2019		Change $
		(in thousands)
	Year Ended December 31, 2023									Year Ended December 31, 2023		Year Ended December 31, 2022			Change $
	(in thousands)												(in thousands)
Preclinical and development expenses		$	43,612	$	27,034	$	16,578
Payroll and payroll-related expenses			15,439		11,496		3,943
Other expenses			4,366		3,627		739	Other expenses	3,442		3,405			37
Total research and development		$	63,417	$	42,157	$	21,261


Number		Description

3.1 3.1		Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-38085), filed with the Commission on May 10, 2017).

3.2		Corrected Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-38085), filed with the Commission on September 24, 2019).

3.3		Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-38085), filed with the Commission on May 10, 2017).

4.1		Form of Common Stock Certificate of the Company (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-217245), filed with the Commission on April 25, 2017).

4.2		Second Amended and Restated Investors’ Rights Agreement, by and among the Company and certain of its stockholders, dated January 6, 2017 (incorporated herein by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

~~4.3~~	Description of the Securities of Ovid Therapeutics Inc. ~~(incorporated herein by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K (File No. 001-38085), filed with the Commission on March 12, 2020).~~

~~4.4~~ 4.3		Form of Series A Preferred Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-38085), filed with the Commission on February 21, 2019).

10.1+		Form of Indemnity Agreement by and between the Company and its directors and officers (incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.2+		2017 Equity Incentive Plan (incorporated herein by reference to Exhibit 4.12 to the Company’s Registration Statement on Form S-8 (File No. 001-38085), filed with the Commission on May 22, 2017).

10.3+		Forms of Option Grant Notice and Option Agreement under 2017 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.4+		2014 Equity Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.5+		Amendment to 2014 Equity Incentive Plan, effective as of March 9, 2015 (incorporated herein by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.6+		Amendment to 2014 Equity Incentive Plan, effective as of June 4, 2015 (incorporated herein by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).


10.7+		Amendment to 2014 Equity Incentive Plan, effective as of July 28, 2015 (incorporated herein by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.8+		Amendment to 2014 Equity Incentive Plan, effective as of February 11, 2016 (incorporated herein by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.9+		Form of Restricted Stock Purchase Agreement under the 2014 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.10+		Form of Stock Option Agreement—Early Exercise under the 2014 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.11+		Forms of Stock Option Agreement under the 2014 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.12+		2017 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 4.14 to the Company’s Registration Statement on Form S-8 (File No. 001-38085), filed with the Commission on May 22, 2017).

10.13+		Amended Non-Employee Director Compensation ~~Plan (incorporated herein by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K (File No. 001-38085), filed with the Commission on March 12, 2020)~~Policy, effective May 5, 2022..

10.14+		Executive Employment Agreement between the Registrant and Jeremy M. Levin, dated June 5, 2015 (incorporated herein by reference to Exhibit 10.13 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

10.15+		~~Second Amended and Restated~~ Executive Employment Agreement between the Company and ~~Amit Rakhit,~~Jeff Rona, effective ~~November 1, 2019~~June 2, 2021 (incorporated herein by reference to Exhibit ~~10.15~~10.17 to the Company’s Annual Report on Form 10-K (File No. 001-38085), filed with the Commission on March ~~12, 2020~~15, 2021)..

10.16+		~~Third Amended and Restated~~ Executive Employment Agreement between the Company and ~~Tim Daly,~~Jason Tardio, effective ~~December 18,~~October 21, 2019 (incorporated herein by reference to Exhibit ~~10.16~~10.18 to the Company’s Annual Report on Form 10-K (File No. 001-38085), filed with the Commission on March ~~12, 2020~~15, 2021)..

10.17+		~~Executive Employment Agreement between the Company and Jeff Rona, effective September 30, 2020~~

~~10.18+~~	~~Executive Employment Agreement between the Company and Jason Tardio, effective October 21, 2019~~

~~10.19+~~	Amended and Restated Executive Employment Agreement between the Company and Thomas Perone, effective January 1, 2020

~~10.20†~~	License Agreement by and between H. Lundbeck A/S and the Company, dated March 25, 2015 (incorporated herein by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on May 2, 2017).

~~10.21†~~	Collaboration and License Agreement, by and between the Company and Takeda Pharmaceutical Company Limited, effective January 6, 2017 (incorporated herein by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1 (File No. 333-217245), filed with the Commission on April 10, 2017).

~~10.22†~~	~~Series B-1 Preferred Stock Purchase Agreement, by and between the Company and Takeda Pharmaceutical Company Limited, dated January 6, 2017~~ (incorporated herein by reference to Exhibit 10.19 to the Company’s ~~Registration Statement~~Annual Report on Form ~~S-1~~10-K (File No. ~~333-217245)~~001-38085), filed with the Commission on ~~April 10, 2017)~~March 15, 2021).

~~10.23†~~ 10.18+		License Agreement by and between Northwestern University and the Company, dated December 15, 2016. (incorporated herein by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K (File No. 001-38085), filed with the Commission on April 10, 2017).

~~10.24^~~ 10.19+		~~First Amendment to~~Royalty, License and Termination Agreement, by and between ~~H. Lundbeck A/S and~~ the Company and Takeda Pharmaceutical Company Limited, dated March 2, 2021 (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 10-Q (File No. 001-38085), filed with the Commission on May ~~10, 2019~~13, 2021.

10.20†		License Agreement, dated as of December 30, 2021, by and between the Ovid Therapeutics Inc. and AstraZeneca AB (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form ~~8-K/A~~8-K (File No. 001-38085), filed with the Commission on ~~June 17, 2019)~~January 3, 2022).

10.21^

~~10.25†~~	~~Collaboration~~P urchase and ~~License~~Sale Agreement , dated as of October 1 7 , 2023, by and between the Company and ~~Angelini Pharma Rare Diseases AG, dated July 9, 2020~~Ligand P. harma ceuticals Incorporated.

23.1		Consent of Independent Registered Public Accounting ~~Firm.~~Firm

24.1		Power of Attorney (included on the signature page to this report).



31.1						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1* 32.1						Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97						I ncentive Compensation Reco upment Policy

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

*
104	~~Furnished herewith~~	Cover Page Interactive Data File (formatted as Inline XBRL and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained ~~in such filing.~~ within Exhibit 101)


	OVID THERAPEUTICS INC.

Date: March ~~15, 2021~~ 8, 2024	By:		~~By:~~	/s/ Jeremy M. Levin
				Jeremy M. Levin
				Chief Executive Officer (Principal Executive Officer)

Date: March 8, 2024	By:			/s/ Jeffrey Rona
~~Date: March 15, 2021~~			~~By:~~	~~/s/ Timothy Daly~~
		~~Timothy Daly~~ ~~Executive Vice President, Finance, Corporate Controller~~ Jeffrey Rona Chief Business & ~~Treasurer~~ Financial Officer (Principal Financial and Accounting Officer)


Report of Independent Registered Public Accounting Firm (KPMG LLP, New York, NY PCAOB ID: 185)	~~F-2~~	F-2
Consolidated Balance Sheets	~~F-3~~	F-3
Consolidated Statements of Operations	~~F-4~~	F-4
Consolidated Statements of Comprehensive ~~Loss~~ Income (Loss)	~~F-5~~	F-5
Consolidated Statements of Changes in Stockholders’ Equity	~~F-6~~	F-6
Consolidated Statements of Cash Flows	~~F-7~~	F-7
Notes to Consolidated Financial Statements	~~F-8–F-23~~	F-8

		For the Year Ended December 31,			For the Year Ended December 31,
		2020			2019
	For the Year Ended December 31, 2023							For the Year Ended December 31, 2023	For the Year Ended December 31, 2022
Revenue:
License and other revenue		$	12,617,221		$	-
License and other revenue
License and other revenue

Total revenue
Total revenue
Total revenue
Operating expenses:
Research and development
Research and development
Research and development			63,417,394			42,157,641
General and administrative			30,630,804			19,251,826
Total operating expenses			94,048,198			61,409,467
Loss from operations			(81,430,977	)		(61,409,467	)
Other income, net			395,401			948,224
Other income (expense), net
Loss before provision for income taxes
Provision for income taxes
Net loss		$	(81,035,576	)	$	(60,461,243	)
Net loss attributable to common stockholders		$	(81,035,576	)	$	(60,461,243	)
Net loss per share attributable to common stockholders, basic and diluted		$	(1.39	)	$	(1.54	)
Weighted-average common shares outstanding basic and diluted			58,451,293			39,217,223
Net loss per share, basic
Net loss per share, diluted
Weighted-average common shares outstanding, basic
Weighted-average common shares outstanding, diluted

	Convertible Preferred Stock						Common Stock						Additional Paid-In			Accumulated Other Comprehensive			Accumulated
	Shares			Amount			Shares			Amount			Capital			Income/(Loss)			Deficit			Total
Balance, December 31, 2019		7,762		$	8			54,710,322		$	54,711		$	283,122,894		$	2,469		$	(213,156,521	)	$	70,023,561
ATM costs		-			-			-			-			(114,936	)		-			-			(114,936	)
Issuance of common stock from employee stock purchase plan		-			-			105,464			105			203,361			-			-			203,466
Issuance of common stock from exercise of stock options		-			-			165,384			165			300,656									300,821
Conversion of series A convertible preferred stock to common stock		(4,512	)		(5	)		4,512,000			4,512			(4,507	)		-			-			-
Proceeds from August 2020 Offering, net of underwriting costs and commissions		-			-			6,250,000			6,250			46,725,185			-			-			46,731,435
Stock-based compensation expense		-			-			-			-			7,525,354			-			-			7,525,354
Other comprehensive loss		-			-			-			-			-			(2,469	)		-			(2,469	)
Net loss		-			-			-			-			-			-			(81,035,576	)		(81,035,576	)
Balance, December 31, 2020		3,250		$	3			65,743,170		$	65,743		$	337,758,007		$	-		$	(294,192,097	)	$	43,631,656

	Convertible Preferred Stock						Common Stock						Additional Paid-In			Accumulated Other Comprehensive			Accumulated
	Shares			Amount			Shares			Amount			Capital			Income/(Loss)			Deficit			Total
Balance, December 31, 2018		-		$	-			24,654,114	��	$	24,654		$	191,477,598		$	(1,829	)	$	(152,695,278	)	$	38,805,145
Proceeds from February Offering, net of underwriting costs and commissions		2,500			3			13,993,778			13,994			30,506,838			-			-			30,520,835
Issuance of common stock from employee stock purchase plan		-			-			80,542			81			131,814			-			-			131,895
Conversion of common stock to series A convertible preferred stock		1,262			1			(1,262,000	)		(1,262	)		1,261			-			-			-
Proceeds from October Offering, net of underwriting costs and commissions		4,000			4			10,350,000			10,350			33,519,919			-			-			33,530,273
Proceeds from ATM Offerings, net of underwriting costs and commissions		-			-			6,893,888			6,894			22,279,672			-			-			22,286,566
Stock-based compensation expense		-			-			-			-			5,205,792			-			-			5,205,792
Other comprehensive income		-			-			-			-			-			4,298			-			4,298
Net loss		-			-			-			-			-			-			(60,461,243	)		(60,461,243	)
Balance, December 31, 2019		7,762		$	8			54,710,322		$	54,711		$	283,122,894		$	2,469		$	(213,156,521	)	$	70,023,561


	Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Balance, December 31, 2022	1,250	$	1	70,466,885	$	70,467	$	357,770,825	$	(42,187)	$	(225,526,542)	$	132,272,564
Issuance of common stock from exercise of stock options and employee stock purchase plan	—	—		225,107	225		534,976		—		—		535,201
Stock-based compensation expense	—	—		—	—		7,285,192		—		—		7,285,192
Other comprehensive income	—	—		—	—		—		42,889		—		42,889
Net loss	—	—		—	—		—		—		(52,338,959)		(52,338,959)
Balance, December 31, 2023	1,250	$	1	70,691,992	$	70,692	$	365,590,993	$	702	$	(277,865,501)	$	87,796,887

	Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Balance, December 31, 2021	1,250	$	1	70,364,912	$	70,359	$	351,033,589	$	—	$	(171,357,513)	$	179,746,436
Issuance of common stock from exercise of stock options and employee stock purchase plan	—	—		101,973	108		180,550		—		—		180,658
Stock-based compensation expense	—	—		—	—		6,556,686		—		—		6,556,686
Other comprehensive loss	—	—		—	—		—		(42,187)		—		(42,187)
Net loss	—	—		—	—		—		—		(54,169,029)		(54,169,029)
Balance, December 31, 2022	1,250	$	1	70,466,885	$	70,467	$	357,770,825	$	(42,187)	$	(225,526,542)	$	132,272,564

	Year Ended December 31,			Year Ended December 31,
	2020			2019
Cash flows from operating activities:
Net loss	$	(81,035,576	)	$	(60,461,243	)
Adjustments to reconcile net loss to cash used in operating activities:
Stock-based compensation expense		7,525,354			5,205,792
Depreciation and amortization expense		306,848			255,002
Change in accrued interest and accretion of discount on short-term investments		(199,408	)		(29,633	)
Change in operating assets and liabilities:
Prepaid expenses and other current assets		(724,575	)		224,458
Security deposit		(15,236	)		(13,235	)
Related party receivable		989,383			(531,042	)
Long-term prepaid expenses		(117,632	)		2,438,022
Accounts payable		2,333,716			(653,953	)
Accrued expenses		4,835,607			2,177,844
Deferred revenue		12,382,779			-
Related party payable		2,134,826			297,366
Net cash used in operating activities		(51,583,914	)		(51,090,622	)

Cash flows from investing activities:
Purchases of short-term investments		(9,961,092	)		(34,797,004	)
Proceeds from maturities of short-term investments		45,000,000			5,000,000
Purchase of property and equipment		(127,240	)		(57,156	)
Software development and other assets		(263,440	)		(186,889	)
Net cash provided by (used in) investing activities		34,648,228			(30,041,049	)

Cash flows from financing activities:
Proceeds from August 2020 Offering, net of offering expenses		46,731,435			-
Proceeds from February and October 2019 Offerings, net of offering expenses		-			64,120,736
Proceeds from ATM Offerings, net of offering expenses		-			22,286,566
ATM costs		(163,250	)		-
Proceeds from employee stock purchase plan		203,466			131,895
Proceeds from exercise of options		300,821			-
Net cash provided by financing activities		47,072,472			86,539,197

Net increase in cash and cash equivalents		30,136,786			5,407,526
Cash and cash equivalents, at beginning of period		41,897,144			36,489,618
Cash and cash equivalents, at end of period	$	72,033,930		$	41,897,144

Non-cash investing and financing activities:
Software development and other costs in accrued expenses and accounts payable	$	—		$	164,922
Offering costs in accrued expenses and accounts payable	$	21,314		$	69,628



	Year Ended December 31, 2023		Year Ended December 31, 2022
Cash flows from operating activities:
Net loss	$	(52,338,959)	$	(54,169,029)
Adjustments to reconcile net loss to cash used in operating activities:
Non-cash consideration received in licensing agreement transaction	—		(945,366)
Unrealized (gain) loss on equity investments	(2,003,073)		454,811
Change in accrued interest income and accretion of discount on marketable securities	(2,172,254)		(1,211,311)
Stock-based compensation expense	7,285,192		6,556,686
Depreciation and amortization expense	568,282		512,505
Amortization of right-of-use asset	1,028,293		869,100
Change in lease liability	(533,946)		936,927
Change in operating assets and liabilities:
Prepaid expenses and other current assets	(1,385,052)		109,292
Accounts payable	1,750,026		(5,174,136)
Accrued expenses	2,020,566		(3,166,606)
Net cash used in operating activities	(45,780,925)		(55,227,127)

Cash flows from investing activities:
Purchase of marketable securities	(112,443,150)		(172,964,441)
Sales/maturities of marketable securities	120,000,000		90,000,000
Purchase of long-term equity investments	(10,000,000)		(2,500,000)
Issuance of convertible short-term note receivable	—		(1,000,000)
Purchases of property and equipment	(40,308)		(1,224,379)
Software development and other costs	(97,147)		(194,397)
Net cash used in investing activities	(2,580,605)		(87,883,217)

Cash flows from financing activities:
Proceeds from exercise of options and employee stock purchase plan	535,201		180,658
Proceeds from royalty monetization agreement	30,000,000		—
Net cash provided by financing activities	30,535,201		180,658


Net decrease in cash, cash equivalents and restricted cash	(17,826,329)		(142,929,686)
Cash, cash equivalents and restricted cash, at beginning of period	46,798,599		189,728,285
Cash, cash equivalents and restricted cash, at end of period	$	28,972,270	$	46,798,599

Non-cash investing and financing activities:
Right-of-use asset in exchange for lease liability	$	—	$	15,791,769
Conversion of short-term note receivable to long-term equity investment	$	—	$	1,000,000

	December 31, 2020
	Amortized		Gross unrealized		Gross unrealized		Fair
	cost		holding gains		holding losses		value
Cash	$	1,977,320	$	-	$	-	$	1,977,320
Money market funds		70,056,610		-		-		70,056,610
Total cash and cash equivalents	$	72,033,930	$	-	$	-	$	72,033,930

U.S. treasury notes	$	-	$	-	$	-		-
Total short-term investments	$	-	$	-	$	-	$	-

	December 31, 2019
	Amortized		Gross unrealized		Gross unrealized		Fair
	cost		holding gains		holding losses		value
Cash	$	501,537	$	-	$	-	$	501,537
Money market funds		41,395,607		-		-		41,395,607
Total cash and cash equivalents	$	41,897,144	$	-	$	-	$	41,897,144

U.S. treasury notes	$	34,839,500	$	2,469	$	-		34,841,969
Total short-term investments	$	34,839,500	$	2,469	$	-	$	34,841,969


	December 31, 2023		December 31, 2022
ROU asset	$	13,894,376	$	14,922,669
Current lease liability	$	1,246,119	$	533,946
Long-term lease liability	$	14,755,606	$	16,001,725


	December 31, 2023		December 31, 2022
Operating lease cost	$	2,167,233	$	1,806,028
Variable lease cost	—		—
Short-term lease cost	—		—


2024	$	2,316,303
2025	2,316,303
2026	2,316,303
2027	2,316,303
2028	2,469,447
Thereafter	9,877,788
	$	21,612,447

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Life in Years		Value
Options Outstanding at December 31, 2018		4,714,383		$	8.10		7.89	$	153,485
Vested and exercisable at December 31, 2018		2,337,931		$	7.88		7.20	$	153,485
Granted		3,547,513			2.93		9.56
Exercised		-			-
Forfeited		(856,601	)		6.43
Options Outstanding December 31, 2019		7,405,295		$	5.82		8.01	$	4,488,930
Vested and exercisable at December 31, 2019		3,296,547		$	7.93		6.53	$	356,443
Granted		3,583,160			3.93		9.68
Exercised		(165,384	)		1.82		-
Forfeited		(415,526	)		5.00
Options Outstanding December 31, 2020		10,403,420		$	5.26		7.59	$	652,438
Vested and exercisable at December 31, 2020		5,395,658		$	6.45		6.13	$	445,599


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Options outstanding at December 31, 2021	10,776,758	$	4.97	6.07	$	2,389,890
Vested and exercisable at December 31, 2021	6,188,200	$	5.98	4.63	$	1,531,907
Granted	4,575,641	2.89		9.26
Exercised	(25,518)	1.91
Forfeited or expired	(2,365,643)	5.56
Options outstanding December 31, 2022	12,961,238	$	4.13	7.42	$	62,158
Vested and exercisable at December 31, 2022	6,742,890	$	5.05	6.20	$	61,214
Granted	3,038,000	2.63		9.20
Exercised	(146,346)	2.76
Forfeited or expired	(728,346)	3.44
Options outstanding December 31, 2023	15,124,546	$	3.87	6.90	$	5,212,586
Vested and exercisable at December 31, 2023	9,649,094	$	4.47	5.97	$	2,464,620


	December 31,
	2023		2022
Deferred tax assets/liabilities:
Net operating loss carryovers	$	55,653,286	$	55,472,573
Intangible assets	7,522,067		6,332,176
Capitalized research and experimental costs	10,909,248		4,246,071
Stock-based compensation	7,248,199		4,384,751
Royalty monetization liability	8,427,970		—
Lease liability	4,495,402		3,544,624
Research and development tax credits	2,877,649		3,046,253
Accrued compensation	—		—
Charitable contributions	—		—
Depreciation	(166,075)		(241,096)
Right-of-use asset	(3,903,379)		(3,198,857)
Other	(434,957)		97,494
Total gross deferred tax assets/liabilities	92,629,410		73,683,989
Valuation allowance	(92,629,410)		(73,683,989)
Net deferred tax assets (liabilities)	$	—	$	—