The Opthea Ltd (ASX: OPT) share price is on the move on Monday after announcing an institutional placement.
The clinical-stage biopharmaceutical company's shares are up 4.5% to $2.86 at the time of writing.
What did Opthea announce?
This morning Opthea announced that it has received commitments from sophisticated and institutional investors in Australia and the United Kingdom to raise A$50 million via a private placement.
According to the release, the placement was conducted at A$2.65 per share, representing a discount of only 3% to its last close price. A total of 18.9 million fully paid ordinary shares will be issued under the placement, representing approximately 7.5% of current issued capital.
Why is Opthea raising funds?
Management advised that the proceeds from the placement will be used to fund further activities relating to its OPT-302 product.
This includes supporting the late-stage clinical development of OPT-302 as a therapy for wet Age-related Macular Degeneration (wet AMD) with the manufacture of sufficient quantities of clinical grade OPT-302 for Phase 3 clinical development and the commencement of two concurrent Phase 3 pivotal registrational trials in wet AMD patients.
Opthea's CEO and Managing Director, Dr Megan Baldwin, said: "This institutional placement of A$50m at this time strengthens Opthea's cash position as we explore a number of strategic development opportunities, and enables the Company to fund its operations into the first half of calendar year 2021. The completion of this placement will allow Opthea to expeditiously progress our Phase 3 clinical development program with OPT-302."
What is OPT-302?
OPT-302 is a soluble form of vascular endothelial growth factor receptor 3 (VEGFR-3) that blocks the activity of two proteins (VEGFC and VEGF-D) that cause blood vessels to grow and leak. These are processes which contribute to the pathophysiology of retinal diseases.
Opthea's Phase 2b clinical study saw its OPT-302 combination therapy demonstrate statistically significant and superior gains in visual acuity compared to ranibizumab (Lucentis) monotherapy at 24 weeks in a trial of 366 treatment-naïve wet AMD patients.
This led to many in the market believing the combination therapy could become the new standard of care in the future.
One broker that liked what it saw was Goldman Sachs. A note out of the investment bank in October revealed that its analysts are bullish on Opthea and OPT-302. The broker estimates that the product has a ~US$10 billion market opportunity.
