Current global financial conditions make it difficult for publicly traded biotech companies to raise money through conventional stock offerings, so some companies are finding alternatives. Opthea Limited, an eye drug developer whose most advanced program is an experimental treatment for a wet form of age-related macular degeneration (AMD), has secured up to $260 million in two deals that will support ongoing Phase 3 trials of its lead asset and lays the groundwork for the potential commercialization of the product.
In the first of the deals announced late Sunday, Melbourne, Australia-based Opthea could get up to $170 million by a life sciences investment firm and its affiliates. The second deal was a $90 million private placement with institutional investors. All of these investors are betting on the future success of the drug, OPT-302, which could have preliminary Phase 3 data in two years showing how its drug compares to currently available blockbuster drugs that treat wet AMD.
The larger of the two deals is with Carlyle and its newly acquired life sciences investment arm Abingworth. They created Launch Therapeutics, a new company that offers pharmaceutical and biotech firms a range of funding models to support late-stage development of drug candidates. These investors have agreed to pay Opthea $120 million in three installments. The deal also allows those investors to commit another $50 million.
Carlyle and its affiliates have no interest in Opthea, and the biotech disclaims any royalties or rights to OPT-302. Instead, the drug’s developer agreed to pay the investors amounts tied to the drug’s progress. Opthea will make a key payment upon regulatory approval of the drug in the US, UK or European Union. The biotech also agreed to pay those investors six fixed annual “success payments.” Opthea also agreed to variable payments equal to 7% of net sales of the drug. The total amount Opthea is paying out is capped at $680 million — four times the amount of funding the company receives, assuming investors commit to the full $170 million.
The second deal could bring Opthea up to $90 million in a private sale of shares to institutional investors. These investors are buying shares in the biotech at a new share price of A$1.15, a 12.6% discount to the 10-day average share price as of August 10. This sale of shares will take place in two tranches. The first, which will bring in $42.5 million, is expected to take place around August 24; the second tranche of $47.5 million is subject to shareholder approval at a general meeting scheduled for September 26.
Wet AMD is a disorder in which abnormal growth of blood vessels in the back of the eye causes deterioration of the macula, part of the retina. Fluid or blood leaking from these blood vessels causes a blur or blind spot in the patient’s central vision. The disease affects about 1 million in the US and 2.5 million in Europe. Standard treatment involves drugs injected into the eye, where they block vascular endothelial growth factor (VEGF), a protein that contributes to the abnormal growth of blood vessels. The approved wet AMD drugs—Roche’s Lucentis, Novartis’ Beovu, and Regeneron Pharmaceuticals’ Eylea—specifically target VEGF-A. In addition, Roche’s cancer drug Avasin is prescribed by some doctors to treat an off-label eye disorder.
With OPT-302, Opthea does not aim to displace the current lineup of wet AMD therapies. Instead, it is hoped that a combination approach will better help patients, especially those whose disease does not respond to a VEGF-A inhibitor alone. The abnormal blood vessel growth behind wet AMD is governed by more than one VEGF protein, said Opthea in the investor presentation. Instead of targeting VEGF-A, Opthea’s drug is a fusion protein designed to stop two other blood vessel growth proteins, VEGF-C and VEGF-D. Both proteins increase when VEGF-A is blocked, which can reduce the effect of drugs that work solely by targeting VEGF-A. By combining its approach with currently available VEGF drugs, Opthea claims its drug may offer a way to more broadly shut down the pathways leading to wet AMD. In a phase 2b trial, Opthea reported that its drug met its primary objective of showing superior visual acuity compared to Lucentis.
Two Phase 3 studies testing Opthea’s drug are underway. One will compare the combination of OPT-302 and Lucentis to treatment with Lucentis alone. The other will test the drug Opthea and Eylea compared with Eylea alone. The primary objective is to show change in visual acuity at week 52. Dosing will continue until week 96 to assess long-term safety. Opthea anticipates that it will enroll nearly 1,000 patients in each of these global trials. If the 52-week data show efficacy, Opthea plans to file marketing applications for the drug in the U.S. and Europe, the company said in a presentation to investors.
Opthea’s new funding agreement comes less than two weeks after Carlyle, a global investment firm, completed the acquisition of Abingworth, a life sciences investment firm with $2 billion in assets under management. Financial terms of this acquisition were not disclosed.
The capabilities of OPT-302 may extend beyond wet AMD. Diabetic macular edema (DME), an eye disease that is a leading cause of vision loss in the elderly and diabetic patients, develops in a manner similar to wet AMD. Opthea has completed a phase 1b/2a study in DME. But for now, the company’s main focus is developing the drug for wet AMD. In announcing the funding deal, Opthea CEO Megan Baldwin said the money is expected to fund the company through reporting preliminary Phase 3 data in mid-2024.
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