It seems that Opthea was placed in a tough spot after it had failed both of its phase 3 studies last month. Both of these studies were known as COAST and ShORe, which 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 it was, things quickly got worse for this company because 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 even now has to 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 and compare it 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 Pharmaceutical’s EYLEA (aflibercept).
Speaking of this phase 3 COAST study, consider that patients who took the drug sozinibercept achieved a mean change in Best Corrected Visual Acuity (BCVA) of 13.2 letters from baseline to week 52. This is compared to that of patients who took EYLEA and achieved BCVA of 13.8 letters.
The reduction in workforce by 65% is set to begin May 1, 2025. However, even then, the company is going to incur another hit. The reason why is because this reduction of workforce is going to result in $4.5 million for the company. On the flip side of this, it is expected to save roughly $1 million a month in terms of employee costs. I believe that things are dire here, and this is much more than just the failed trial data release it just had. There is concern that it may not have enough cash to continue to fund itself and its operations going forward.
In wet-AMD, there is the growth of abnormal blood vessels underneath the macula. From there, blood leaking from the formation of new blood vessels has an effect on the retina and can lead to vision loss. In addition, such leakage could also allow for the formation of new scars, also causing disease for the patient. In terms of the mechanism of action (MOA), sozinibercept was set in place to trap VEGF-C and VEGF-D, and the reason why is because both proteins are responsible for the formation of new blood vessels and ultimately leakage. Both of these proteins send signals through the pathways of VEGFR-2 and VEGFR-3 in order to drive disease.
With the drug trapping VEGF-C and VEGF-D, this signaling would be blocked, and thus, it was expected that the formation of new blood vessels wouldn’t be possible. Many anti-VEGF-A therapies are in place to treat these patients, but they inadvertently increase VEGF-C and VEGF-D activities, which is definitely not a good thing. Unfortunately, the primary endpoint was not met, and the belief that trapping VEGF-C and VEGF-D would help these patients. Furthermore, sozinibercept was not given alone. Instead, it was given in combination with EYLEA.