Opthea COAST trial misses primary endpoint, enters talks with DFA Investors

Opthea (OPT) announced results from its global Phase 3 clinical trial COAST in patients with wet AMD. The global COAST Phase 3 trial evaluated the efficacy and safety of intravitreally administered 2 mg sozinibercept every four or eight weeks in combination with 2 mg aflibercept, as per label, every eight weeks after a loading phase for the treatment of wet AMD. The trial did not meet its primary endpoint of mean change in best corrected visual acuity from baseline to week 52. In wet AMD patients with minimally classic and occult lesions, participants receiving sozinibercept combination therapy with a dosing regimen of every four weeks or every eight weeks achieved a mean change in BCVA of 13.2 or 13.2 letters from baseline to week 52, respectively, versus 13.8 letters with aflibercept monotherapy. In the overall population, participants receiving sozinibercept combination therapy with a dosing regimen of every four weeks or every eight weeks achieved a mean change in BCVA of 13.5 and 12.8 letters from baseline to week 52, respectively, versus 13.7 letters with aflibercept monotherapy. There was no numerical difference observed in the key secondary endpoints. Sozinibercept combination therapy was well tolerated. Following the receipt of these results, Opthea has undertaken a thorough review of the data to ensure both its accuracy and integrity. No anomalies were identified through this process that would cause the board to adopt an alternative view on the data outlined above. Following the results in the COAST trial, Opthea has been assessing its rights and obligations under its development funding agreement with, among others, the investors under the DFA. In light of these updates, it is possible that under the DFA, Opthea could become required to pay amounts to the DFA Investors that would have a material adverse impact on the solvency of the company. As previously disclosed, certain instances and events may result upon the termination of the DFA, and upon such termination, Opthea will be obligated to pay the DFA Investors up to four multiples of the amounts paid to the company under the DFA. Termination can be triggered by a range of events, including, among other things, inability of Opthea to fund development costs, failure by Opthea to continue to use commercially reasonable efforts to develop sozinibercept, Opthea’s insolvency, or disagreement with the DFA Investors. Each termination trigger has a corresponding potential repayment amount of $0, $229.5M, $255M, $467.5M or $680M. Opthea’s management and board of directors have been in active discussions with the DFA Investors, pursuant to and as required under the DFA, to explore possible options for Opthea in respect of its clinical trial program and with a view to identifying whether there is a pathway that represents the best outcome for the company and its shareholders. As such, it is possible that Opthea and the DFA Investors reach a negotiated settlement that is different from the parties’ existing rights under the DFA. It should also be noted that the DFA Investors have security over the assets of Opthea in the form of an “all assets” lien. As a result, Opthea is unable to incur further non-equity funding or dispose of its material assets without the prior consent of the DFA Investors. At this stage, no decision has yet been taken with respect to either trial, including whether to discontinue activities for the COAST trial or accelerate and unmask the ShORe trial. Discussions continue with the DFA Investors to determine the most appropriate course of action. As of February 28, Opthea has an unaudited cash and cash equivalents balance of $113.8M. In light of these matters, there remains material uncertainty as to Opthea’s ability to continue as a going concern. As noted above, discussions with the DFA Investors are ongoing and Opthea cannot be certain as to the outcome of those discussions or when that outcome may become known. Opthea and its Directors are currently relying on the “safe harbour” provisions in section 588GA of the Corporations Act 2001. Opthea has requested that trading in its listed securities continue to be suspended on both ASX and Nasdaq until the earlier of Opthea being in a position to provide an announcement to the market by Opthea providing more clarity on these issues or the commencement of trading on Monday, March 31. The extension to the voluntary suspension is necessary to prevent trading in Opthea’s securities on an uninformed basis, pending further clarity on these issues being available and released to the market. Opthea is not aware of any reason why the voluntary suspension should not be extended or of any other information necessary to inform the market regarding the voluntary suspension.