Australia’s visionary eye-health company Opthea, which raised almost $1 billion to bring its eye injection to market, is fighting for survival today after the failure of its first Phase-3 trial.
Key Takeaways
- In what was billed as the biggest Australian biotech readout in years, Opthea announced Monday morning the first of its two Phase-3 trials, COAST, involving about 1,000 patients suffering wet age-related macular degeneration, had failed to show any benefit.
- Opthea was running two Phase-3 trials simultaneously into its drug OPT-302 [sozinibercept], aiming to tap into the multi-billion-dollar macular degeneration market, after the stellar success of its Phase-2b trial in 2019.
- The second of those trials is due to be finalised mid-year, but as Opthea negotiates with investors, there is talk of bringing that “readout” forward.
- As of late February, Opthea held US$113.8 million in cash, but, pending talks with investors, it faces insolvency, a statement released to the ASX said.
- Opthea’s chief innovation officer Megan Baldwin told Forbes Australia in December how her life’s work was going to depend on the results of these two Phase-3 trials
Crucial quotes
“Following the negative results in the COAST trial, Opthea has been assessing its rights and obligations under its Development Funding Agreement [DFA] with, among others, the investors under the DFA,” Opthea said in a statement released to the ASX on Monday.
“In light of these updates, it is possible that under the DFA, Opthea could become required to pay amounts to the DFA investors that would have a material adverse impact on the solvency of the company.”
Opthea’s deal with the DFA investors stipulated it could be terminated under certain circumstances which would require the company to pay those investors up to US$680 million – four times the amount they’d invested.
“Under the DFA, termination can be triggered by a range of events, including among other things, inability of Opthea to fund development costs, failure by Opthea to continue to use commercially reasonable efforts to develop sozinibercept, Opthea’s insolvency, or disagreement with the DFA investors.
“In light of these matters, there remains material uncertainty as to Opthea’s ability to continue as a going concern.”
The results
Actively-treated patients were able to read 13.2 letters on an eye chart compared to 13.8 letters for those who received the existing standard of care drug. That is, it performed slightly worse than standard of care.
Opthea got a chance to review the data. But “no anomalies were identified through this process that would cause the board to adopt an alternative view.”
Opthea’s hopes of survival rest with the second Phase-3 trial, SHORE, which is using OPT-302 in conjunction with a different standard of care drug.
Opthea, whose market capitalisation stands at $739 million but which as recently as early February was worth almost twice that, had seen a plunge in its share price since February 6 when it hit a 52-week peak of $1.16.
Opthea shares, currently at $0.60 on the ASX have been in a trading halt on the ASX and Nasdaq since March 14. It has requested that it remain suspended until March 31, or until it can provide more clarity on its future.
Background
Opthea CEO Fred Guerard told Forbes Australia last year he was “fairly confident” that OPT-302 would be on sale and in paying customers’ eyes by early 2027. But Guerard didn’t want to get ahead of himself. “As a biotech, I don’t know if you ever exit the valley of death,” he said. “It’s a tough business. But we’re in a very good place.”
Big numbers
The market for VEGF-A inhibitors in wet age-related macular degeneration is $15 billion a year. Current treatments include Lucentis, Eylea, Beovu, Vabysmo and the cancer drug Avastin.
Opthea’s OPT-302 – aka sozinibercept – is designed to be a second injection to improve the efficacy of all those treatments.
Bell Potter analyst Thomas Wakim last year described it as a “blockbuster opportunity”. He put a $1.30 valuation on Opthea shares, but acknowledged the considerable risks investing in getting drugs to market.
