Biotech Opthea eyes $80m raise to back retinal disease therapy trials

Melbourne-headquartered biotech company Opthea (ASX: OPT) has kicked off an $80 million capital raise to support clinical development of its drug candidate aimed at treating wet AMD (age-related macular degeneration), the most common cause of blindness in people aged over 55.

The raise represents 28 per cent of the current market capitalisation of $280 million for the company, whose shares have fallen in half over the past year as expenditure ramped up to pay for research and development, increasing the number of clinical trial sites and enrolments of patients.

Opthea announced $70 million would come from an accelerated non-renounceable entitlement offer, and the remaining $10 million will be from a private placement.

CEO Dr Megan Baldwin, who has held the role for more than a decade, says the capital raise strengthens Opthea’s cash position as the company advances its Sozinibercept (OPT-302) drug candidate through Phase 3 clinical trials.

She says the funding will be combined with funding under a Development Funding Agreement (DFA) with New York-based Carlyle and Abingworth, which has committed US$35 million ($54 million) while its co-investor plans to participate with US$50 million ($77 million).

With this backing, she says Opthea expects to und its operations into the third quarter of calendar year 2024 and through the important clinical milestones of completion of patient recruitment for both its Phase 3 clinical trials, which are currently at 75 per cent enrolment.

The company's proposed drug would be complementary to standard of care, with two clinical trials studying OPT-302's effects on wet AMD in combination with Ranibizumab and Aflibercept.

Earlier this year chairman Jeremy Levin explained in the company's half-year report that wet AMD is a progressive, chronic disease of the central retina and the leading cause of visual impairment in the elderly.

"Progressive vision loss associated with wet AMD contributes to significant healthcare and economic costs globally and greatly impacts ability to perform routine daily activities such as driving and reading," he said.

"The hallmark of wet AMD is choroidal neovascularization, which occurs when abnormal blood vessels grow into the retina, beneath the macula, a region of the retina which is needed for sharp, central vision.

"New blood vessels break through layers of the retinal tissue, leaking fluid, lipids and blood, leading to retina distortion and fibrous scarring, and often rapid loss of vision."

The standard of care currently involves drugs that inhibit the VEGF-A proteins that help regulate the growth of abnormal new blood vessels and choroidal neovascularisation in wet AMD. Two prominent companies that supply these drugs, Lucentis and Eylea, generated combined revenues in excess of US$12 billion ($18.5 billion) in 2021.

"Although VEGF-A inhibitor therapies improve outcomes for many people with wet AMD, a majority of patients exhibit a suboptimal response to currently available therapies that continues to impact quality of life, with further gains in visual acuity necessary for patients to resume routine daily activities," Levin explained.

"As such, there remains a very large clinical and market opportunity for novel therapies that address this high unmet medical need for wet AMD patients."

In the six months to 31 December 2022, Opthea's loss after tax more than doubled to US$77 million ($118 million), due primarily to a large increase in R&D spend which reached US$61 million ($94.2 million) for the six-month period.