Opthea secures one of the biggest biotech raising in 2022 to advance macular degeneration drug trials
Shares in Opthea drop more than 15 per cent after the biotech struck a $239m financing deal with multi-billion dollar investment firm Carlyle Group.
Opthea has landed one of the biggest biotech raisings of the year, securing $US170m ($239.2m) to advance late-stage clinical trials of its drug aimed at combating a debilitating eye disease.
Despite receiving funding to progress trials of what is tipped to become its blockbuster drug, Opthea’s shares dived 15.5 per cent to $1.18.
The Melbourne-based company – which has a market value of $489.5m with dual listings on the ASX and US Nasdaq – received the cash injection via a non-dilutive financing package from Launch Therapeutics, a clinical development company backed by Carlyle Group, a $US12.72bn global investment firm.
While it is non-dilutive, the terms of the raising mean Opthea will pay back Launch Therapeutics four times the amount financed.
If the drug is approved in a major market, Opthea will pay Launch Therapeutics a milestone payment and six subsequent annual fixed success payments and variable success payments of 7 per cent of net sales.
Opthea will retain full worldwide commercial rights for OPT-302 and has the option to prepay its obligations in full at any time.
Opthea chief executive Megan Baldwin said she was “thrilled to enter this strategic arrangement” with Launch Therapeutics, known as Launch Tx.
“This strategic transaction is expected to fund us through Phase 3 topline data expected in mid-2024 and strengthens our strategic position to maximise the value of OPT-302,” Dr Baldwin said.
“This transaction with Launch Tx is non-dilutive for shareholders of Opthea, and we are proud to have been selected as Launch Tx’s first partner since its formation.”
The cash – provided in three instalments up to a value of $US120, with an option to commit a further $US50m – will advance ongoing Phase 3 clinical trials of Opthea’s drug OPT-302, which is aimed at treating macular degeneration.
Opthea was floated on the ASX as Circadian Technologies in 1985. The US Food and Drug Administration gave Opthea the go-ahead for clinical trials of the drug in August last year ahead of its listing on the US Nasdaq via a separate $181m raising in October.
Dr Baldwin said at the time, the Nasdaq listing meant the company was now positioned to launch the next phase of development of its treatment for wet macular degeneration, an age-related disease that causes blurred vision and significant blind spots in a sufferer’s visual field.
OPT-302, a treatment the company hopes will improve eyesight in patients suffering wet AMD, when administered with the two other drugs considered the best standard of care for the disease.
“One of the really good points about this financing is that you can be in a stronger position by being able to move it forward independently. It means we can make the right choices and only do a partnership deal that is good — we’re not forced into a position of needing to do any one particular kind of deal, we’re independently funding through to the top-line data readout,” Dr Baldwin said in October.
“That said, we’ll remain open to partnership, because we recognise you can leverage the expertise and resources of a large pharmaceutical partner.”
Launch Tx chief executive Anshul Thakral said: “We are excited to partner with Opthea on OPT-302, a novel drug candidate that has demonstrated superior visual acuity in Phase 2 trials over standard of care anti-VEGF-A therapy in patients with wet AMD”.
“With this collaboration, we will advance OPT-302 through its ongoing Phase 3 trials and hope to reach regulatory approval in a timely manner, with the intention of bringing this important medicine to patients in need,” Mr Thakral said.
“At Launch Tx, we are committed to working with pharma and biotech partners to expedite late-stage drug development programs. We do this by designing innovative funding models tailored to our partners’ specific needs and leveraging our extensive clinical development, regulatory, and commercialisation expertise as needed. This partnership with Opthea is a great example of one such model.”
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