Leadership Shakeup Follows Opthea’s Major Financial Settlement

Settlement Resolves Major Financial Uncertainty

Opthea Limited has announced a pivotal corporate update following the successful settlement of its Development Funding Agreement (DFA) with key investors. This agreement effectively terminates the DFA, which had posed a looming financial risk of up to USD 680 million in termination payments after the company’s phase 3 clinical trials for sozinibercept failed to meet primary endpoints earlier this year.

The settlement involves the issuance of equity representing 9.99% of the company’s fully diluted share capital to the DFA investors, without any cash payment required from them. Additionally, Opthea will pay USD 20 million in cash to these investors, leaving the company with an estimated USD 20 million in cash and equivalents post-settlement. This outcome alleviates the material uncertainty regarding Opthea’s ability to continue as a going concern, which had previously led to the suspension of its stock trading on both the ASX and NASDAQ.

Leadership Transition Marks New Chapter

Alongside the financial resolution, Opthea is undergoing significant leadership changes. CEO Dr Fred Guerard, CFO Tom Reilly, and Director Sujal Shah will all step down in September. In a strategic move to maintain continuity, Chairman Dr Jeremy Levin will take on the additional role of CEO starting September 1, 2025. Dr Levin expressed his commitment to guiding the company through this transitional phase and evaluating future strategic options.

The company has also streamlined its operations considerably, reducing its workforce by over 80% and halving the size of its board. These measures reflect a shift towards a leaner structure as Opthea prepares for a comprehensive strategic review over the next six months. The board is exploring avenues including targeted internal development, strategic partnerships, business development or licensing opportunities, and potential capital returns to shareholders.

Trading Suspension and Future Outlook

Despite these positive developments, Opthea’s shares remain suspended on the ASX as the company continues to engage with the exchange regarding the resumption of trading. Investors will be watching closely for updates on this front, as well as the outcomes of the strategic review and how the new leadership will steer the company’s future direction.

While the settlement removes immediate financial overhangs, questions remain about Opthea’s long-term sustainability and growth prospects in the competitive biotechnology sector. The company’s next moves will be critical in restoring investor confidence and unlocking shareholder value.