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Dr Megan Baldwin, Opthea Limited

"We can see a multi-billion dollar opportunity because we complement rather than compete with the market as it stands."

Wet age-related macular degeneration (wet AMD) is the leading cause of vision loss in the developed world in people over the age of 50. As the risk of developing wet AMD increases with age, the overall aging of the population is expected to result in a significant increase in the number of wet AMD cases worldwide.

Current therapies for wet AMD generate revenues in excess of $12 billion a year. ASX-listed Opthea is poised to tap into this market.

“Our therapy is designed to improve patient outcomes by working in conjunction with existing treatments,” says Dr. Megan Baldwin, Opthea’s managing director, and CEO. “No matter how conservative we are, we can see a multibillion-dollar opportunity because we complement rather than compete with the market as it stands.”

The therapy, a molecule known as OPT-302, is being investigated in two very large, international phase three clinical trials. Each trial involves almost a thousand patients and this is the last stage of clinical development.

“We’ve generated really excellent data so far,” Baldwin says. “The smaller, phase 2b clinical trial compared our molecule with the control standard of care in 366 patients. Statistically, those who received our treatment did better. That’s a very good milestone to have met. We expect the read-out of the current trials, scheduled for 2024, to confirm these results. If that’s the case, the next step is approval and marketing authorisation.”

Almost 20 years on ASX Opthea was founded by biotechnology entrepreneur Leon Serry in 1984. The following year it became one of the first companies in the sector to list on the bourse.

“The company was originally an investment vehicle for early-stage research,” Baldwin says. “The intellectual property we’re developing came into the company in 2007. Since 2014, we’ve focused purely on retinal eye diseases, primarily wet AMD.”

Wet AMD occurs when new blood vessels grow beneath the retina at the back of the eye. As these vessels are fragile, they tend to leak blood and other fluids which can damage the macula, the part of the retina responsible for central vision. As a result, sufferers can rapidly lose the ability to discriminate the fine detail needed to read, drive a car and, eventually, recognise faces.

Current treatments, known as VEGF-A inhibitors, are considered effective if they stabilise the condition. Used in combination with these treatments, Opthea’s therapy has the potential to improve vision in patients by reducing the size and leakage of the vessels, which improves quality of life and enables older people to continue living independently.

Nasdaq IPO funds phase three Large final-stage clinical trials are expensive. So Opthea decided to raise funds by listing on the US Nasdaq. It completed a US$128.2 million IPO in November 2020.

“Raising funds was our primary motivation, but the Nasdaq listing also builds awareness of the company around the world and supports the international nature of the trials. Patients from more than 25 countries are taking part,” Baldwin says.

“We needed a global study to ensure we could recruit enough patients in a reasonable timeframe, which would not be possible if we just looked for people in Australia alone. It’s also important to recruit quite broadly because we’re seeking global approval and some regulatory authorities require you to have tested the therapy in their own population.”

Opthea has always fostered good investor relations (IR) but it has ramped up investor outreach since listing on Nasdaq. In Australia PR firm Monsoon manages its market communication. In the US, it has appointed strategic communication firm Argot Partners to stay in touch with stakeholders in this market.

Balding says attracting funds has become easier as clinical trials have progressed. “The risk is much higher at the pre-clinical stage. When the drug hasn’t been tested on humans, you don’t know how well it will work or what the safety profile is going to look like. The risk equation is much lower by the time you reach where we are now.”

In the early days, Opthea worked hard to develop strong, long-term relationships.

“We knew who we wanted to talk to and did a lot of investor roadshows, phone calls and meetings,” Baldwin says. “We took them through our opportunity, plans for the future, timelines and the value of data generated to date, which gave them a level of confidence about both the quality of our therapy and the commercial opportunity,” she adds.

Potential for partnerships Opthea is starting to focus on launching new products and generating revenue.

“We want to be in a position to take the therapy through to launch ourselves, or to be able to partner with one of the large pharmaceutical companies providing current therapies,” Baldwin says.

“This would broaden our commercial reach and expedite an efficient and successful launch. The other dynamic in the commercial setting is the current standard of care treatments approved for the treatment of wet AMD are coming off patent. Competitors are putting copies of these drugs, or biosimilars, through clinical development and over the next few years, these will enter the market, typically with a lower price point,” she adds.

Pricing pressure on the current standard of care treatments resulting from patent expiry will work in Opthea’s favour.

“We’ll have more flexibility in how we price OPT-302 in the market,” Baldwin says. “It also creates an opportunity for us to license a biosimilar and create a co-formulated form of our therapy where a single injection into the eye administers both types of treatment. Large companies that are already producing VEGF-A inhibitors will also see an opportunity to reset the patent clock and maintain a lucrative income stream by creating a new, co-formulated option with Opthea’s OPT-302.”

At the moment, Baldwin believes Opthea’s share price is undervalued for OPT-302’s stage of development, largely because the US market is down.

“That tells us we need to continue to work on getting the word out,” she says. “But it’s also a great opportunity for investors to jump on board.”

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