ASX Health Stocks: Opthea up 13pc on $US85m funding from Carlyle, new investor

Biotech Opthea has surged more than 25 per cent after announcing it would receive $US85 million in non-dilutive funding.

Talk about an eye-catching announcement. Opthea is set to receive $US85 million in funding. Picture: Getty Images

Biotech Opthea (ASX:OPT) has surged more than 25 per cent after announcing it was to receive $US85 million in non-dilutive funding.

The retinal diseases focused biotech says it will receive the remaining $US35 million funding from its development funding agreement (DFA) with global investment firm Carlyle and its life science franchise, Abingworth.

Opthea will receive a further $US50 million in financing under an amended DFA to include a new co-investor. This financing is non-dilutive to shareholders, with no equity issued to Carlyle, Abingworth or the new co-investor.

Opthea’s share price surged by more than 12 per cent on Wednesday morning on the announcement – then kept going, with the gain for the day at 25.3 per cent by 1.30pm (AEDT)

The investments mark a show of confidence by Carlyle in the potential of sozinibercept (OPT-302), Opthea’s drug to treat patients with wet AMD (age-related macular degeneration) to provide what Opthea believes is a multi-billion dollar commercial opportunity.

Wet AMD occurs when abnormal blood vessels grow in the back of the eye and damage the macula.

Under the terms of the DFA, Carlyle and Abingworth have committed $US120 million, of which $US85 million has been received to date.

The remaining committed funds of US$35 million and the additional US$50m announced today will be received on or around December 31, bringing the total committed funding under the amended DFA to $US170 million, the maximum amount allowed under the terms of the DFA.

Opthea says the funding will be used to advance thee Phase 3 clinical trials and precommercialisation activities of sozinibercept (OPT-32).

The terms of the DFA also state that if sozinibercept is approved in a major market, Opthea will make a milestone payment after regulatory approval, and then six subsequent annual fixed success payments and variable success payments of 7 per cent of net sales, with cumulative payments capped at four times the amount funded to Opthea.

Opthea will also retain full worldwide commercial rights for sozinibercept, and has the option to prepay its obligations in full at any time.

“We’re extremely pleased with this funding that demonstrates investors’ confidence in sozinibercept and its potential for future clinical, regulatory and commercial success,” said Opthea CEO Dr Fred Guerard.

“Both global pivotal trials in wet AMD are now over 80 per cent enrolled, and aim at confirming the superior efficacy outcomes observed in Opthea’s Phase 2b trial.”

Radiopharm opens second trial site

Radiopharm Theranostics (ASX:RAD) announced on Wednesday morning that Perth’s Hollywood Private Hospital would become the second Australian site for its RAD 204 Phase 1 therapeutic study.

Radiopharm has been awarded Human Research Ethics Committee (HREC) approval for the trial.

The RAD 204 Phase 1 clinical trial will evaluate the safety and efficacy of the novel radiotherapeutic in patients with advanced PD-L1 positive non-small cell lung cancer (NSCLC), the most common type of lung cancer.

The Perth site joins Brisbane’s Princess Alexandra Hospital in Brisbane, which will open its part of the trial on January 4.

Opthea says the addition of the Perth site would improve the geographic availability of the trial, which will accelerate recruitment.

The trial is being supported by leading oncology care provider GenesisCare.

Approximately 300,000 new lung cancer cases are expected to be diagnosed in the US by the end of 2023, 81 per cent of which are estimated to be NSCLC patients.

This content first appeared on stockhead.com.au

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