Ovid Therapeutics Inc. (OVID) stock intrinsic value fair value estimate & owner earnings analysis

Ovid Therapeutics is a clinical-stage drug developer with no approved products and no recurring revenue. Its lead programs are OV329, an oral next-generation GABA-AT inhibitor for drug-resistant epilepsy that has completed Phase 1 dosing and is heading toward Phase 2 patient studies (including planned studies in tuberous sclerosis complex and infantile spasms), and OV4071, a KCC2 activator licensed from AstraZeneca that received ethics approval for a Phase 1 trial in March 2026. What the business has actually earned. Ovid has not produced steady profits. Operating cash flow was negative in every year from 2017 to 2025 except 2021 (for example -$31.5M in 2017, -$56.0M in 2024 and -$38.3M in 2025). The one positive year, 2021, came from selling its soticlestat rights back to Takeda: revenue was $208.4M and owner earnings about $128.6M ($1.89 per share). That stream ended when Takeda reported in June 2024 that soticlestat failed its Phase 3 study. Revenue of $7.3M in 2025 was mostly a $7.0M payment from Marinus that replaced its future ganaxolone royalty obligations, a one-time buyout rather than a run rate; revenue in the first half of 2026 was only $0.7M. After removing working-capital swings and stock compensation, owner earnings in the loss years ran from about -$2.20 to -$0.53 per share, and 2025 (-$0.53) was the smallest loss. We treat 2021 as a one-off sale and do not use it as an earnings level. How we valued it. Nothing we can name and evidence produces future earnings: OV329 and OV4071 have no partner, no approval and no revenue, so the drug programs are worth $0 in every case. What remains is the balance sheet. At June 30, 2026 Ovid held $169.8M of cash and marketable securities (up from $90.4M at year-end 2025 after equity financing in 2026) against total liabilities of $22.1M, and it carried equity stakes in the private companies Graviton and Gensaic at $42.0M at year-end 2025 (Graviton's carrying value includes $26.9M of unrealized gains, and the stakes are illiquid). The company is spending roughly $63M a year (operating cash outflow was $31.5M in the first half of 2026). There are 195.3M shares outstanding as of August 2026, versus about 71M at the end of 2024, so per-share figures are heavily diluted by recent financings. Cash is counted at face value and no debt is deducted, because there is none beyond the office lease. Bear case ($0.39 per share). The trials do not lead to a partner or approval. Management keeps spending at the current pace for 18 months (about $94.5M) before winding down, and the private stakes prove worthless. That leaves about $75.3M, or $0.39 per share. Base case ($0.44 per share). Ovid spends about two years of cash (about $126M) on OV329 and OV4071 trials without a result that creates value we can point to. The private stakes hold their year-end 2025 carrying value of $42.0M. Cash left of $43.8M plus $42.0M gives about $85.8M, or $0.44 per share. Bull case ($0.95 per share). As in the base case, plus one out-licensing or partnership deal worth a net $100M, about half of the 2021 Takeda proceeds. The evidence for this lever is Ovid's record of monetizing assets it develops: the 2021 Takeda sale and the 2022 Marinus license, which later produced the $7.0M buyout. That gives about $185.8M, or $0.95 per share. No deal has been signed, so it is confined to the bull case. What we left out and why. No growth is credited in any case. Approval of OV329 or OV4071, a positive Phase 2 readout, or a sale of the private stakes above carrying value would all be upside, but none is contracted or already achieved. Not included: 28.9M Series B warrants exercisable at $1.40 a share through October 2030, which would add about $40.1M of cash and the same number of new shares if exercised. We treat that as roughly neutral to value per share at the values above. What would make this wrong. Upside: a partner paying a large upfront amount for OV329, or positive Phase 2 data. Downside: faster spending than the current pace, further share issuance, or the private stakes being written down. We could not verify the current market value of the private stakes beyond their year-end 2025 carrying value. This is a first analysis of the company.