Opthea share price storms higher after $50 million institutional placement

The Opthea Ltd (ASX:OPT) share price is storming higher on Monday after announcing the completion of a $50 million institutional placement…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

3 ASX All Ords shares up 50%+ in March

These ASX shares have been on fire this month. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Share Gainers

Why Mesoblast, Patriot Battery Metals, Sigma, and Zip shares are pushing higher

These shares are having a good session on hump day. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Consumer Staples & Discretionary Shares

If you'd put $20,000 in this ASX retail stock at the start of 2023, you'd have $134,000 now

This online retailer has executed a remarkable turnaround for its investors.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was back to earth for ASX shares this Tuesday.

Read more »