Phase 3 readout puts Opthea at risk of insolvency

Australian-US biotech Opthea Ltd has reported disappointing phase 3 results with its lead drug for vision-robbing disease wet age-related macular degeneration (AMD), throwing its future into doubt.

The company said this morning that the COAST trial of sozinibercept (OPT-302) as a combination therapy with blockbuster wet AMD therapy Regeneron/Bayer's Eylea (aflibercept) wasn't able to show any improvement over Eylea used alone on the main endpoint – the change in best corrected visual acuity (BCVA) from baseline to week 52.

The disappointing result – which read through to a series of secondary endpoints as well – means that Opthea could be on the hook to repay monies to some of its investors "that would have a material adverse impact on the solvency of the company."

The biotech raised $113 million in an institutional share placement last year to fund phase 3 development of sozinibercept, a VEGF 'trap' compound that targets two forms of the protein – VEGF-C and VEGF-D – designed to complement the effects of current drugs like Eylea that target VEGF-A.

It is actually running two phase 3 trials – COAST and ShORe – which are testing the drug in combination with Eylea and Roche's Lucentis (ranibizumab), respectively, and completed enrolment last year.

Sozinibercept was moved into late-stage development on the strength of a phase 2b trial suggesting the combination with Lucentis was more effective than Roche's drug used alone, with the hope that it could offer the first treatment for wet AMD with a new mechanism of action in 15 years.

Hopes that ShORe could rescue the programme seem slim, as the company said it had carried out a thorough review of the COAST data "to ensure both its accuracy and integrity" and had concluded that there are "no anomalies […] that would cause the board to adopt an alternative view" of its prospects.

The big issue facing the company are the terms of a development funding agreement (DFA) that would require it to pay up to four times what it received from investors, a range extending from zero to $680 million, depending on what happens next. It ended February with a cash balance of just under $114 million.

The company said it was in "active discussions with the DFA Investors […] to explore possible options for Opthea in respect of its clinical trial programme and with a view to identifying whether there is a pathway that represents the best outcome for the company and its shareholders."

Added to that, the terms of the DFA mean that Opthea is unable to raise any more funding or dispose of its assets without agreement from the investors.

"At this stage, no decision has yet been taken with respect to either trial, including whether to discontinue activities for the COAST trial or accelerate and unmask the ShORe trial," said the company.

"Discussions continue with the DFA Investors to determine the most appropriate course of action."

Photo by Lisette Harzing on Unsplash