The Motley Fool

Opthea share price storms higher after $50 million institutional placement

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.

Not sure about Opthea? Then check out these high quality shares that have been rated as buys.

The Best Blue Chip Shares for 2020 – NOW NAMED!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!

SimplyCLICK HERE FOR YOUR FREE REPORT!

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.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!