It seems that Opthea was placed in a tough spot after it had failed both of its phase 3 studies known last month. Both of these phase 3 studies were known as COAST and ShORe used the drug sozinibercept to treat patients with wet age-related macular degeneration (Wet-AMD) . If these late-stage trial failures weren’t bad enough as they are, things just got worse for this company because just today it announced that it would reduce its workforce by as much as 65%. The reason for doing such a thing is because at this moment, it just needs to conserve its remaining cash balance of $100 million as of March 2025.
The company didn’t really have a choice here, because the premise with its Development Funding Agreement (DFA) investors would be that further funding would be contingent upon meeting the primary endpoints. Even worse, under this agreement the biotech may be responsible for paying four times the amount of cash it received back to DFA. It now has to even confer with this agreement on its path forward of whether or not it can even continue to advance the development of its failed drug. In essence, it must confer on what the best path forward is to return value to shareholders.
It was believed by the company that by targeting VEGF-C and VEGF-D, it would be able to block VEGFR-2 and VEGFR-3 signaling. Thus, garnering angiogenesis and vascular permeability. The phase 3 ShORe study was looking to use sozinibercept compared to that of LUCENTIS (Ranibizumab) from Roche for the treatment of patients with Wet-AMD. This trial failed to meet the primary endpoint with statistical significance. The very same thing can be said about the phase 3 COAST study, where the company evaluated this drug in comparison to Regeneron Pharmaceuticals EYLEA (Aflibercept).
Speaking of this phase 3 COAST study, consider that patients who took the sozinibercept arm achieved a mean change in Best Corrected Visual Acuity (BCVA) of 13.2 or 13.2 letters from baseline to week 52. This is compared to that of patients who took EYLEA who achieved BCVA of 13.8 letters.
The reduction in workforce by 65% is set to begin May 1st of 2025. However, even then, the company is going to incur another hit. That’s because a one-time cost associated with this reduction in workforce is going to be $4.5 million. On the flip side, it will save the company about $1 million a month in terms of employee costs. I believe that things are dire here, because it stated that in light of the negative data, there is a going concern for it to continue its operations going forward.
