Opthea Targets Vision Improvement

Australia | Nov 18 2020

Biopharmaceutical company Opthea is poised to undertake two phase-3 trials for its treatment to improve vision for those affected by macular degeneration

-OPT-302 designed to achieve broader suppression of wAMD
-Trial data anticipated in the second half of 2023
-Main catalyst will be securing a partnership

 

By Eva Brocklehurst

What is Opthea ((OPT)) doing? The biopharmaceutical company, recently listed on Nasdaq, is developing a treatment to improve visual acuity in wet age-related macular degeneration (wAMD), a condition that affects the eye.

This is a severe form of age-related macular degeneration and a leading cause of blindness in the developed world, whereby abnormal leaky blood vessels grow and cause bleeding, fibrosis and fluid accumulation within retinal layers.

Opthea expects to spend between US$130-135m on two concurrent phase-3 trials commencing in early 2021, with its OPT-302 inhibitor designed to achieve broader suppression and target a potential mechanism of clinical resistance to standard therapies.

The current standard of care is called an anti-VEGF-A inhibitor, such as aflibercept, ranibizumab and bevacizumab, that suppresses the pathway of the disease. Opthea's OPT-302 will be evaluated in one trial in combination with aflibercept and in the other in combination with ranibizumab.

Data from both is anticipated in the second half of 2023 and each will enrol 990 patients. If approved, Citi expects the product will gain meaningful share among wAMD patients that do not respond adequately to standard therapy.

This is estimated to be around 40% of patients. Citi models a 70% probability of success, given the positive phase-2b efficacy/safety data that demonstrated a statistically significant visual acuity benefit over ranibizumab alone.

If approved, OPT-302 is well-positioned as a first-line adjunctive therapy to minimise further vision loss, Wilsons asserts.Citi anticipates this will become the standard of care for such patients who do not respond adequately to initial treatments. A peak US risk-adjusted revenue is estimated at around US$1.2bn in the broker's base case.

Citi is not aware of any competitors, other than Roche's bi-specific faricimab, that have a late-stage development undergoing testing for a novel mechanism in combination with the standard for wAMD.

While OPT-302 has a unique mechanism of action, Bell Potter assesses the de-risking aspect is the fact it targets a well-validated pathway in wAMD treatment. In the current environment, the broker agrees there is a scarcity of novel approaches, with existing drugs facing patient expiry and biosimilar competition.

Valuation

Bell Potter moves its assumed timing for a partnership for OPT-302 to FY24 and forecasts a net loss for FY22. Earlier, the broker had assumed a cash injection in FY22 through a partnering deal but the US IPO and cash injection has now independently funded the business through to top-line results in 2023.


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