Opthea (ASX:OPT) has announced a non-dilutive financing transaction for up to US$170 million from investment funds working with Launch Therapeutics (Launch Tx) to finance and advance the ongoing Phase 3 clinical trials and pre-commercialisation activities of the company's OPT-302 for wet age-related macular degeneration (wet AMD).
OPT-302 is a first-in-class intravitreally administered biologic 'trap' inhibitor of vascular endothelial growth factors C (VEGF-C) and D (VEGF-D) currently being investigated in two concurrent Phase 3 pivotal registrational trials that will each enrol ~990 treatment naïve patients, in combination with two approved anti-VEGF-A treatments, ranibizumab (ShORe trial) and aflibercept (COAST trial).
Launch Tx is the recently formed development company backed by funds managed by global investment firm Carlyle and its life sciences franchise, Abingworth.
Opthea said that under the terms of the agreement, the funds managed by Carlyle and Abingworth, in collaboration with Launch Tx, will commit US$120 million in three instalments at fixed time points and retain an option to commit another US$50 million.
The company will make a milestone payment after regulatory approval in a major market and then six subsequent annual fixed success payments and variable success payments of 7 per cent of net sales. Cumulative payments are capped at four times the amount funded to Opthea. Opthea said it retains full worldwide commercial rights for OPT-302 and has the option to prepay its obligations in full at any time.
"Opthea is thrilled to enter this strategic arrangement with Launch Tx, and to receive funding from world-leading investors in Carlyle and Abingworth. This strategic transaction is expected to fund us through Phase 3 topline data expected in mid-2024 and strengthens our strategic position to maximize the value of OPT-302,” said CEO Dr Megan Baldwin. “This transaction with Launch Tx is non-dilutive for shareholders of Opthea, and we are proud to have been selected as Launch Tx’s first partner since its formation.”
Launch Tx CEO Anshul Thakral said, "We are excited to partner with Opthea on OPT-302, a novel drug candidate that has demonstrated superior visual acuity in Phase 2 trials over standard of care anti-VEGF-A therapy in patients with wet AMD. With this collaboration, we will advance OPT-302 through its ongoing Phase 3 trials and hope to reach regulatory approval in a timely manner, with the intention of bringing this important medicine to patients in need. At Launch Tx, we are committed to working with pharma and biotech partners to expedite late-stage drug development programs. We do this by designing innovative funding models tailored to our partners’ specific needs and leveraging our extensive clinical development, regulatory, and commercialization expertise as needed. This partnership with Opthea is a great example of one such model.”
The company has also announced a US$90 million private institutional placement and launched a share placement plan.
Dr Baldwin added, “This well-supported placement has seen a high level of demand from existing and new institutional investors, including large global and US-based funds. We appreciate the strong support from our current shareholders and are delighted to be welcoming several leading new institutional investors to the register. This successful equity raising in conjunction with the large non-dilutive financing from funds managed by Carlyle and Abingworth, in collaboration with Launch Tx, represents a tremendous achievement for Opthea. Together these financings further validate our strategy to develop OPT-302 as a differentiated therapeutic with the potential to improve patient outcomes in retinal diseases including wet age-related macular degeneration.”