Opthea (ASX:OPT): Still some way to go, but the wait could pay off in 2025

It has been a few years since investors have paid attention to biotech Opthea (ASX:OPT). Since its stellar Phase 2 trial results in 2019, it has toiled away at a Phase 3 trial. Earlier this month, it raised another A$80m, a fair portion of which was taken up by existing investor Carlyle Group.

The question many investors will have is just how long they will need to wait to be rewarded for their patience. The company has a brilliant asset, but when will it be able to bring it to market?

Opthea (ASX:OPT) share price chart (Graph: TradingView)

Introduction to Opthea

Opthea is an ASX biotech that is developing a drug called Sozinibercept (formerly known as OPT-302. Sozinibercept is administered via injection and it is a ‘VEGF-inhibitor’ (Vascular endothelial growth factor). It prevents the abnormal growth of blood vessels and leakage of fluid and protein from the vessels, which can cause wet AMD. Wet AMD is the leading cause of blindness, impacting 3.5m people annually across the globe.

There are existing treatments, but they only inhibit VEGF-A, not VEGF-C and VEGF-D, but Opthea does. Even so, global sales of Lucentis and Eyelea were nearly US$8bn between them. Sozinibercept is intnded to be used in combination with them or other VEGF-A inhibitors, and has a more comprehensive effect than just the one treatment.

Great Phase 2 results

In 2019, Opthea revealed Phase 2 clinical trial results which were nothing short of a success. In simple terms, the average patient receiving Sozinibercept could read 14.2 letters on a typical eye chart whilst other patients (those receiving Lucentis’ treatment ranibizumab, the placebo) could only read 10.8 letters. Non-headline results (such as patients who gained 15 letters or more from the baseline) were good too.

And it was a trial of 366 patients across 110 sites worldwide – so the result clearly was no mere fluke. Opthea also recorded good results in a clinical trial against Diabetic Macular Oedema (DME), unveiled in 2020.

On to Phase 3

Although drugs that pass Phase 2 are more likely to succeed than fail, Phase 3 still needs to be done. Opthea did not commence this phase until 2021, but has made progress. It is running 2 trials with nearly 1,000 each. Enrollment has been completed in both of them, and with a 52-week treatment period, results from the first trial are expected in the March quarter of 2025, while the second is due in the June quarter. The company is targeting a 5.7 letter change in BCVA from baseline at 24 weeks – essentially how many more letters can a patient read on that typical letter chart you read at your eye check ups.  

The clinical trials have not been all the company has been up to. In 2022, the company brought onboard Carlyle Group as an investor and signed a deal whereby its Abingworth unit would receive 7% of net sales if and when it was commercialised, plus a milestone payment on market approval. With a near 5-decade history of investing in biotech, Abingworth knows a thing or two about investing in biotechs – it has invested in over 179 of them.

By Christmas 2023, Carlyle had committed to providing its partner with the balance of the non-dilutive funding not already sent across, with the final tranche amounting to US$35m making the total US$120m. And right after Christmas, a new anonymous co-investor joined this deal, promising to contribute US$50m of its own. A further US$113.2m was raised in June 2024 that is expected to see the company through the current clinical phase.

On top of all this, Opthea has presented at several conferences across the globe. These raise awareness about the company and its therapy, putting it in the best position to hit the ground running if and when it is approved.

A good opportunity, but still some time to go

The recent case studies of Telix Pharmaceuticals and Neuren passing Phase 3 clinical trials (and coming into market in the case of Telix) illustrates that this is a pivotal phase for the company. So it could be with Opthea if the Phase 2 results are anything to go by.

Opthea reckons it has a US$15bn market based off the sales for all its competitors. And when it is approved, Sozinibercept could have up to 12-year market exclusivity.

But we recommend investors hold off investing in it until results are closer – which should be early 2025. There’s little more than can be done but sit back and wait for that point, hoping there’s no further shareholder dilution.

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