Last month the All Ordinaries index recorded its first monthly decline of the year after trade war and recession fears weighed heavily on global share markets.
Whilst that was disappointing, it certainly didn't stop the Opthea Ltd (ASX: OPT) share price from charging higher.
In fact, Opthea shares were far and away the best performers on the index with a whopping 300% gain in August.
Why did the Opthea share price quadruple in value in August?
Investors were scrambling to get hold of the shares of the developer of novel biologic therapies for the treatment of eye diseases following the release of a positive study update early in the month.
That study related to its OPT-302 combination therapy for treatment-naïve patients with wet age-related macular degeneration (AMD).
According to the release, OPT-302 (2.0 mg) combination therapy showed statistical superiority for the most accepted and sensitive primary efficacy outcome.
This has got investors excited as it has the potential to be a game-changer for the company as the standard of care treatments for wet AMD and fellow treatment target Diabetic Macular Edema (DME) had sales of over US$3.7 billion and US$6.2 billion, respectively, in 2018.
Opthea added to conviction buy list.
It wasn't just investors that were excited by this development. Analysts at Goldman Sachs were impressed with this news, leading to the broker initiating coverage on Opthea with a (conviction) buy rating and $4.90 price target.
The broker made the move on the belief that "OPT-302 has multi-billion dollar potential."
Goldman said: "As successful as current treatments have been, they only inhibit up to two of the factors responsible for the disease (VEGF-A/B). Over half of patients do not achieve significant vision gains, and a quarter experience continued vision loss. OPT-302 is intended for use in combination with these treatments, blocking a further two factors (VEGF-C/D), hence targeting improved outcomes via a more complete blockade."
And whilst it will still be some time before the company is generating sales from OPT-302, Goldman has "forecast non-risk-adjusted peak sales of US$5.0bn (US$2.0bn risk-adjusted), of which US$3.4bn relates to wAMD (US$1.7bn)."
Should you invest?
I've been impressed with Opthea's development and believe it could be a good option for a small long-term investment. Though, it is a high risk one and largely unsuitable for the majority of investors.
Elsewhere, Goldman Sachs has also recently reiterated its buy ratings on fellow healthcare shares CSL Limited (ASX: CSL) and ResMed Inc. (ASX: RMD).
