Opthea’s Cash Falls to US$101M as Wet AMD Trials Fail Primary Endpoints

Clinical Trial Failures Prompt Strategic Shift

Opthea Limited (ASX: OPT; NASDAQ: OPT), a clinical-stage biopharmaceutical company focused on retinal diseases, has announced a significant pivot following the failure of its Phase III COAST and ShORE trials targeting wet age-related macular degeneration (wet AMD). Both trials failed to meet their primary endpoints, leading the company to immediately discontinue its wet AMD development program.

Wet AMD remains a leading cause of vision loss among the elderly, affecting approximately 3.5 million people across the US and Europe. Despite the high unmet medical need, Opthea’s sozinibercept candidate did not demonstrate the efficacy required to advance, underscoring the challenges in developing next-generation therapies in this competitive space.

Workforce Reduction and Financial Implications

In response to the trial outcomes, Opthea has implemented a drastic workforce reduction, cutting approximately 65% of its staff. The remaining team will focus on compliant termination of clinical trials and administrative operations. This restructuring is expected to reduce monthly personnel costs by around US$1 million, with one-off severance costs estimated at US$4.5 million.

Financially, the company reported a cash balance of US$101.4 million as of March 31, 2025, down from US$131.9 million the previous quarter. The net operating cash outflow for Q3 FY25 was US$32.4 million, reflecting ongoing operational expenses despite the program discontinuation. Research and development expenses decreased to US$25.5 million, while administration costs fell sharply to US$1.8 million, consistent with the restructuring.

Ongoing Negotiations and Future Outlook

Opthea remains in active negotiations with its Development Funding Agreement (DFA) investors, who have provided US$170 million in capital funding to date. The outcome of these discussions is critical, as the company faces material uncertainty regarding its ability to continue as a going concern. The DFA includes provisions for royalty payments contingent on regulatory approval and commercial success, but with the wet AMD program discontinued, the path forward is unclear.

The company has indicated that any proceeds from future capital raises will be allocated towards advancing clinical development of new assets, manufacturing and regulatory activities, and general corporate purposes. However, details on new pipeline candidates or timelines remain undisclosed.

Market and Investor Considerations

Opthea’s announcement marks a pivotal moment for the company and its shareholders. The failure of two pivotal Phase III trials in a high-profile indication is a significant setback, raising questions about the viability of its current pipeline and strategic direction. The substantial staff reduction and cash burn highlight the financial pressures facing the company as it recalibrates.

Investors will be closely watching the outcome of DFA negotiations and any announcements regarding new clinical programs or partnerships. The company’s ability to secure additional funding and rebuild confidence will be essential to its survival and future growth prospects.