Current global financial conditions make it difficult for listed biotech companies to raise capital through traditional stock offerings, so some are looking for alternatives. Opthea Limited, an ophthalmic drug developer whose state-of-the-art program is an experimental treatment for wet age-related macular degeneration (AMD), has secured up to $260 million in two Phase 3 testing assets for its lead product and lay the groundwork for potential commercialization of the product.
In the first deal announced later on Sunday, Melbourne, Australia-based Opthea could receive up to $170 million From a life sciences investment company 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 OPT-302 drug, which could receive preliminary Phase 3 data within two years showing how the drug compares to currently available blockbuster drugs for wet AMD. .
The larger of the two deals was Carlyle and its newly acquired life sciences investment arm, Abingworth. They formed Launch Therapeutics, a new company that provides pharmaceutical and biotech companies with a range of financing models to support late-stage development of drug candidates. The investors have agreed to pay Opthea $120 million in three tranches. The deal also gives those investors the option to put in an additional $50 million.
Carlyle and its affiliates have no equity interest in Opthea, and the biotech has not waived royalties or rights to OPT-302. Instead, drug developers agree to pay investors payments related to the drug’s progress. Opthea will pay milestone payments following regulatory approval of the drug in the US, UK or EU. In addition, the biotech company agreed to pay these investors six fixed annual “success payments.” Opthea also agreed to pay a variable payment equal to 7% of the drug’s net sales. The total amount Opthea pays is capped at $680 million — assuming investors commit to pay the full $170 million, four times the amount the company has received.
Second deal could bring Opthea up to $90 million in a private stock sale to institutional investors. Those investors bought shares in the biotech company at the new share price of $1.15, which is 12.6 per cent below the stock’s 10-day average price to August 10. The stock sale will take place in two tranches. The first, which will bring in $42.5 million, is expected to take place around Aug. 24; the second, $47.5 million, is subject to shareholder approval at a shareholder meeting scheduled for Sept. 26.
Wet AMD is a disease in which abnormal blood vessel growth in the back of the eye causes the macula (part of the retina) to degenerate. Fluid or blood leaking from these vessels can cause blurred central vision or blind spots. The disease is estimated to affect 1 million people in the United States and 2.5 million people in Europe. Standard treatment involves injecting drugs into the eye where they block vascular endothelial growth factor (VEGF), a protein that causes abnormal growth of blood vessels. 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 off-label by some doctors for eye diseases.
With OPT-302, Opthea’s goal is not to replace current wet AMD therapies. Instead, it hopes the combined approach will better help patients, especially those whose disease does not respond to VEGF-A inhibitors alone. The abnormal blood vessel growth behind wet AMD is driven by more than one VEGF protein, Opthea said in an article. Investor introductionInstead of targeting VEGF-A, the Opthea drug is a fusion protein designed to block two other blood vessel growth proteins, VEGF-C and VEGF-D. Both proteins are elevated when VEGF-A is blocked, which may weaken the effects of drugs that work only by targeting VEGF-A. By combining its approach with currently available VEGF drugs, Opthea believes its drug could provide a way to more broadly shut down the pathways that drive wet AMD. In Phase 2b testing, Opthea reported that its drug met its primary goal of showing superior vision compared to Lucentis.
Two Phase 3 studies are testing Opthea’s drug. Some will compare the combination of OPT-302 and Lucentis to treatment with Lucentis alone. Another will test the Opthea drug and Eylea compared to Eylea alone. The primary goal was to show changes in visual acuity at week 52. Dosing will continue through Week 96 to assess long-term safety. Opthea expects it will enroll nearly 1,000 patients in each global study. Opthea plans to submit applications for the drug in the U.S. and Europe if the 52-week data show efficacy, the company said in an investor presentation.
Opthea’s new financing deal is in global investment firm Carlyle fully It acquired Abingworth, a life sciences investment firm with $2 billion in assets under management. Financial terms of the acquisition were not disclosed.
Opportunities for OPT-302 may extend beyond wet AMD. Diabetic macular edema (DME), an eye disease that is the leading cause of vision loss in older adults and diabetics, develops in a similar way to wet AMD. Opthea has completed a Phase 1b/2a study in DME. But for now, the company’s main focus is on developing drugs for wet AMD. In announcing the financing deal, Opthea CEO Meghan Baldwin said the cash is expected to fund the company through preliminary data from Phase 3 of the interim report in 2024.
Photos by Flickr users Steubert through Creative Commons license
