Opthea failure could see Regal lose over $200m on investment

Regal Funds founder and chief investment officer Phil King. Picture: Supplied

Investors have wiped more than $100m from the value of Regal Funds, amid fears that a position in one of its stocks – last week worth about $214m – may fall to zero.

The Phil King-led funds management business owns just under 30 per cent of Opthea, which had a market value of just under $740m before it stopped trading.

Now the biotech has flagged the possibility of no longer trading as a going concern. It remains in safe harbour protection following the disappointing results of the third phase of a trial.

But the focus on Monday remained on Regal, one of the most prolific investors in Australian stocks, with the looming losses threatening to put a real dent in its finances.

The group is one of the most high-profile equities investors in Australia and has attempted take out rivals via mergers and acquisitions, including Perpetual and Platinum Equity in recent years, which is why the current situation is gaining attention.

Regal Partners closed down 14.8 per cent to $2.41, with its market value now $959m, while its satellite Regal Investment Fund was down 6.6 per cent with its market value about $685m.

Opthea is a clinical-stage biopharma company developing novel therapies to treat retinal diseases, including wet age-related macular degeneration.

The negative results mean it may need to make sizeable payments under its Development Funding Agreement, which has security over its assets.

As at February 28, it had $US113.8m of cash but the payback to funders could be over $1bn.

Other large investors on Opthea’s register include Hearts and Minds Investments and Vanguard.