Opthea last traded at 60 cents per share.

Last week, we learned that Opthea has decided to cease development of its flagship sozinibercept (OPT-302) treatment.

OPT-302 had been a potential treatment for wet age-related macular degeneration (wet AMD).

The ASX biotech is now in a serious financial bind, and has told investors "there remains material uncertainty as to Opthea's ability to continue as a going concern."

Broker Canaccord Genuity said Opthea's story highlights the inherent risks of investing in ASX biotech shares.

Broker surprised by trial failure

Opthea advised the market on 24 March that its Phase 3 COAST clinical trial of OPT-302 had failed to meet its primary endpoint.

In a note issued after the COAST trial news, Canaccord Genuity described the result as "a catastrophic negative surprise to us".

The broker said it was taken aback by the Phase 3 failure because the Phase 2 data had looked so promising.

Canaccord said Phase 2 involved a relatively large patient cohort and the results had been "statistically significant and compelling".

This had been a contributor to the broker's buy rating on Opthea shares back in February.

Back then, Canaccord Genuity said:

OPT-302 is unique and differentiated, in our view, on safety and efficacy metrics, and we see the upside opportunity for peak sales of US$1b and upside to >$3/share, pending clinical, regulatory and commercial success.

Canaccord said it had assessed a 65% probability of success for OPT-302.

It noted there "always is some degree of risk when moving from a Phase II to a larger Phase III" for ASX biotech shares.

As a result of the COAST study's failure, Canaccord placed its Opthea shares rating under review.

ASX biotech shares: Risks and rewards

Biotech companies seek to develop new treatments for diseases.

Arguably, Australia's greatest biotech success story is CSL Ltd (ASX: CSL).

It's the largest ASX biotech share and ranks third within the S&P/ASX 200 Index (ASX: XJO), with a market cap of $125 billion.

Many investors have enjoyed fantastic long-term returns from CSL shares.

The CSL share price has risen 640% in value over the past 20 years.

But investing in smaller ASX biotech shares that are yet to establish an approved product is inherently risky.

The rewards can be huge, but the risks are also high.

Just ask Mesoblast Ltd (ASX: MSB) shares investors.

In October 2020, they were blindsided when the US FDA knocked back the ASX biotech's flagship drug, Remestemcel-L, or Ryoncil.

The medicine treats steroid-refractory acute graft versus host disease (SR-aGVHD) in children.

The FDA asked for more trials, which meant more than two years of extra work before Mesoblast was ready to apply again in 2023.

And it got rejected again.

The company finally gained approval in December last year.

Anticipation of the approval and confirmation in December saw the ASX biotech share rocket 900% over 2024.

That's a long-awaited reward for long-suffering investors.

And it's worth noting that the ASX biotech share has never returned to the price level it traded at in 2020 before the first FDA rejection.

Opthea provides another case in point as to the risks with younger ASX biotech shares.

While things worked out for Mesoblast investors with Ryoncil, Opthea is facing the very real risk of collapse after OPT-302's failure.

What's the lesson for ASX biotech shares investors?

Canaccord analyst Elyse Shapiro said the Phase 3 failure of OPT-302 highlighted the risks of investing in ASX biotech shares.

Shapiro said:

Investment in biotechnology companies is notoriously risky and binary … and that the negative read-through highlights the importance of taking a basket approach when it comes to the sector.

Shapiro said that OPT-302 was the only treatment Opthea had in development, and the company was now at serious financial risk.

We therefore place our forecasts and rating under review, noting the potential that the stock has no value from here.

A basket approach, or diversification, protects investors somewhat from a single stock's downturn, as performing stocks within their portfolio can offset it.

Easy diversification is a key reason why ASX shares investors are increasingly investing in exchange-traded funds (ETFs).

The post Broker laments 'catastrophic negative surprise' that highlights the risks with these types of ASX shares appeared first on The Motley Fool Australia.

In an update this week, we learned that Opthea has decided to cease development of its sozinibercept (OPT-302) treatment.

This follows the failure of its Phase 3 COAST clinical trial and bad news this week about the Phase 3 ShORe trial.

OPT-302 had been a potential treatment for wet age-related macular degeneration (wet AMD).

The ASX biotech is now in a perilous financial state, with the ASX extending its shares' trading suspension this week.

Opthea admits that "there remains material uncertainty as to Opthea's ability to continue as a going concern."

Canaccord Genuity previously had high hopes for the ASX biotech small-cap, given the promising nature of OPT-302's Phase 2 data.

Now, the broker has suspended its buy rating, noting "the potential that the stock has no value from here".

What's happened to Opthea?

The ASX biotech advised investors on 24 March that its Phase 3 COAST clinical trial of OPT-302 had failed to meet its primary endpoint.

The trial was assessing sozinibercept (OPT-302) combined with aflibercept to treat wet AMD.

The failure of the trial raised serious financial concerns for Opthea.

The company said it would review its obligations under its Development Funding Agreement (DFA) with key investors to decide the next steps.

What's the latest news with this ASX biotech share?

On Monday, Opthea issued a statement advising that it and its DFA investors have decided to discontinue the OPT-302 wet AMD trials.

This means it is terminating the Phase 3 COAST (Combination of OPT-302 with Aflibercept Study).

Not only that, it is also terminating the Phase 3 ShORe (Study of OPT-302 in combination with Ranibizumab) in patients with wet AMD.

After the failure of the COAST trial, Opthea decided to accelerate the ShORe trial topline data readout as its next step.

Here are its findings:

The global ShORe Phase 3 trial evaluated the efficacy and safety of intravitreally administered 2 mg sozinibercept every four or eight weeks in combination with 0.5 mg ranibizumab every four weeks, as per label, versus 0.5 mg ranibizumab monotherapy.

The trial did not meet its primary endpoint of mean change in best corrected visual acuity (BCVA) from baseline to week 52.

Opthea CEO Frederic Guerard said:

We are disappointed that COAST and ShORe did not demonstrate the improvements in vision with sozinibercept combination therapy compared to standard of care that we had hoped for.

As previously disclosed, the Company has certain obligations under the DFA. In light of the Phase 3 clinical trial results, the Company and the DFA Investors will continue to discuss this matter in good faith, and we will provide updates on this matter in the future.

What now for this ASX share?

Importantly, Opthea and its DFA investors have agreed that ceasing both trials does not constitute a 'termination event' under the DFA.

This means Opthea does not need to repay its investors anything for the moment.

Previously, Opthea had flagged that the COAST trial's failure meant it may have to pay hundreds of millions of dollars to its DFA investors.

As of 31 March, Opthea had about US$100 million in cash and cash equivalents, so a DFA repayment trigger would threaten its solvency.

But the risk isn't over. There is still a chance the DFA could be terminated altogether, which would require a payment.

Opthea said: "In light of these matters, there remains material uncertainty as to Opthea's ability to continue as a going concern."

Opthea is continuing discussions with the DFA investors and remains reliant on 'safe harbour' provisions under the Corporations Act.

When will Opthea ASX shares trade again?

Last month, Opthea requested a voluntary suspension in trading until it could make its next announcement, which came on Monday.

The ASX has now formally extended the biotech share's suspension due to the company's precarious financial position.

In a statement, the ASX said:

ASX has determined that OPT's financial condition is not adequate to warrant the continued quotation of its securities and therefore is in breach of Listing Rule 12.2.

The suspension will continue until ASX is satisfied that OPT is in compliance with the Listing Rules …

The post This ASX share potentially 'has no value from here', says broker appeared first on The Motley Fool Australia.

Shares in the All Ordinaries Index (ASX: XAO) listed alternative investment manager closed down 8.85% on Thursday at $2.37.

That followed on a gain of 2.4% on Wednesday and a gain of 5.4% on Tuesday. All of which followed a painful 14.8% decline on Monday.

Why the big fall in Regal Partners shares on Monday?

Monday's big sell-off in the ASX All Ords dividend stock followed on concerning news from eye treatment company Opthea Limited (ASX: OPT).

Opthea reported that its phase 3 COAST clinical trial had failed to meet its primary goal.

And as the Motley Fool's Bronwyn Allen noted, "The failure of the trial raises serious financial concerns for Opthea."

Indeed, Opthea stated, "In light of these matters, there remains material uncertainty as to Opthea's ability to continue as a going concern."

So, why were investors selling Regal Partners shares on the news?

Well, as a fund manager, the ASX All Ords dividend stock counts as Opthea's largest shareholder, owning some 30% of the eye treatment company. Investors fearing Opthea could go bust were selling that rumour ahead of any concrete news.

ASX All Ords dividend stock trading on an 8% yield

Over the past 12 months, Regal Partners has paid out 19 cents a share in fully franked dividends.

With the shares in the ASX All Ords dividend stock down 34% in 2025 at yesterday's closing price of $2.37, the stock now trades on a 7.59% trailing dividend yield.

Running his slide over the stock at the end of last week, before Monday's news on Opthea's trial failure hit the wires, Morgans' Damien Nguyen said he rated Regal Partners as a buy (courtesy of The Bull).

"Regal Partners is a leading alternative asset manager benefiting from rising institutional demand for investments in hedge funds, private markets and real assets," he said.

Nguyen added:

With a strong investment performance driving assets under management growth, a scalable business model, strategic acquisitions and an attractive dividend yield, Regal is well placed to generate long term shareholder value.

Commenting on the sell-off that had left the ASX All Ords dividend stock down 21% year to date as at last Friday's close, Nguyen concluded, "We view the recent sell-off as overdone considering Regal has diversified its portfolio from equities to include private credit and real assets."

The post Why this sold-off ASX All Ords dividend stock is 'well placed to generate long-term shareholder value' appeared first on The Motley Fool Australia.

Opthea ASX shares haven't traded in more than a week and remain suspended at 60 cents apiece.  

The stock will not trade again until the company has made a further statement on its financial position, or until next Monday.

Opthea investors are digesting news released yesterday that the Phase 3 COAST clinical trial failed to meet its primary goal.

Let's take a look at the details.

Opthea ASX shares remain suspended

Opthea has revealed that its Phase 3 COAST clinical trial failed to meet its primary endpoint.

The study assessed the efficacy and safety of sozinibercept (OPT-302) combined with aflibercept to treat wet age-related macular degeneration (wet AMD).

The results showed no significant difference in visual acuity improvement compared to aflibercept monotherapy.

Secondary endpoints also showed no numerical difference, although the combination therapy was well tolerated.

The failure of the trial raises serious financial concerns for Opthea.

The company said it is currently reviewing its obligations under its Development Funding Agreement (DFA) with key investors.

The DFA may require repayments to investors ranging up to $680 million, potentially threatening Opthea's solvency.

Opthea had just $113.8 million in cash and cash equivalents as of 28 February.

The company is now in discussions with DFA investors to explore potential solutions.

In its statement, Opthea said:

In light of these matters, there remains material uncertainty as to Opthea's ability to continue as a going concern.

Opthea and its directors are currently relying on 'safe harbour' provisions within the Corporations Act.

Opthea said it is evaluating whether to discontinue the COAST trial and accelerate and unmask the ShORe trial.

The company said discussions with its DFA investors will help it determine the best course of action.

What's the market reaction?

The results have shocked the market.

Shares in Opthea's largest shareholder, Regal Investment Fund (ASX: RF1), fell 5.7% yesterday.

Regal holds a 30% stake in the ASX biotech.

In the Australian Financial Review (AFR), Regal CEO Brendan O'Connor said the share price drop was "more reflective of sentiment".

Regal Investment shares are rebounding on Tuesday, up 1% to $2.98 apiece.

As we reported last month, Canaccord Genuity had a buy rating on Opthea shares and was looking forward to the trial results.

In a note, the broker said:

OPT-302 is unique and differentiated, in our view, on safety and efficacy metrics, and we see the upside opportunity for peak sales of US$1b and upside to >$3/share, pending clinical, regulatory and commercial success.

At the time, Canaccord had a buy rating on the ASX small-cap healthcare share with a 12-month price target of $1.25.

Yesterday in the AFR, Canaccord Genuity's Elyse Shapiro said:

Investment in biotechnology companies is notoriously risky and binary … and that the negative read-through highlights the importance of taking a basket approach.

When will Opthea shares trade again?

Opthea has asked the ASX to keep its shares in voluntary suspension until it can make a further announcement, or until the commencement of trading next Monday, 31 March.

The post Amid fears of collapse, what's happening with Opthea ASX shares today? appeared first on The Motley Fool Australia.

Many analysts have suggested this should be a good year for ASX small-cap shares because they tend to do well when interest rates are on the way down, as they are all over the world.

Let's check out some buy recommendations from a few brokers published on asx.com.au.

Analysts rate these 4 ASX small-cap shares a 'buy'

Bannerman Energy Ltd (ASX: BMN) 

The Bannerman Energy share price is currently $3, down 0.66%. 

Canaccord Genuity has a speculative buy rating on this ASX small-cap uranium share. Its 12-month price target is $4.33. 

Canaccord is positive on Bannerman due to the on-time and on-budget construction progress at its Etango-8 uranium project. There is also an anticipated 3.5% annual growth in uranium demand through to 2035 amid more small modular reactors being built worldwide.

The broker says: 

With a cash balance of $81.1mn the company can easily fund these early works ($95.7mn at end of SepQ). Sourcing a strategic partner remains the largest hurdle. BMN is still evaluating and progressing various funding sources, including project/corporate debt as well as potential offtake and joint venture opportunities with strategic counterparties who can add value to the Etango Project.

Opthea Limited (ASX: OPT) 

The Opthea share price is $1.09, down 0.46% at the time of writing. 

Canaccord Genuity has a buy rating on this ASX small-cap healthcare share with a 12-month price target of $1.25.

The broker is looking forward to a data update for the Phase III Coast study of OPT-302, which it expects the eye diseases biotech to release in April.

The broker says:

OPT-302 is unique and differentiated, in our view, on safety and efficacy metrics, and we see the upside opportunity for peak sales of US$1b and upside to >$3/share, pending clinical, regulatory and commercial success.

PYC Therapeutics Ltd (ASX: PYC) 

The PYC Therapeutics share price is $1.27, down 2.31% at the time of writing. 

Canaccord Genuity has a buy rating on this ASX small-cap biotech share with a 12-month price target of $2.40.

The broker notes that a US competitor recently announced positive Phase 1b study data for another gene therapy targeting autosomal dominant polycystic kidney disease (ADPKD).

The broker says:

While the asset is a competitive threat to PYC's, we note the ADPKD market is very large and there is room for multiple players.

We also think that PYC may have a differentiated mechanism because it directly targets the gene responsible for cyst formation in the kidney …

Nuix Ltd (ASX: NXL) 

The Nuix share price is $4.74, down 0.63%. 

Moelis Australia has a buy rating on this ASX small-cap tech share with a price target of $6.09. 

Moelis responded to Nuix's 1H FY25 update, which stated it was expecting 8% to 9% growth in Annualised Contract Value (ACV) compared to the previous corresponding period, down from an earlier 15% target for FY25. Nuix also noted that increased expenses will lower its earnings before interest, tax, depreciation, and amortisation (EBITDA) and cash flow for 1H25. 

Moelis said: 

… NXL is trading at a meaningful discount to our $6.09 target price and therefore we change our rating to Buy, however we highlight the need for further detail at the forthcoming 1H25 result to enhance our confidence.

The post Experts reveal 4 ASX small-cap shares to buy now appeared first on The Motley Fool Australia.

After all, the team at Bell Potter believes that it could deliver big returns for investors over the next 12 months if everything goes to plan.

Which speculative ASX stock?

The stock in question is Opthea Ltd (ASX: OPT).

It is a biopharmaceutical company developing novel therapies that aim to address the unmet needs in the treatment of highly prevalent and progressive retinal diseases. This includes wet age-related macular degeneration (wet AMD) and diabetic macular edema (DME).

Opthea's lead product candidate is sozinibercept. It is being evaluated in two fully enrolled pivotal Phase 3 clinical trials (COAST, NCT04757636, and ShORe, NCT04757610) for use in combination with standard-of-care anti-VEGF-A therapies. The trial aims to improve the overall efficacy and deliver superior vision gains compared to standard-of-care anti-VEGF-A agents alone.

What is the broker saying?

Bell Potter notes that the company has released an investor presentation with some new data. This includes an update on its phase three trial, which Bell Potter was pleased with. It said:

We take further confidence from the Ph3 patient populations being broadly similar to those included in the previous Ph2b trial. There was only one formal change to entry criteria in the Ph3 trials (the exclusion of RAP patients), with other differences in baseline characteristics being relatively small increases in the proportion of better responding occult patients (+10%) and PCV patients (+6-8%), which provide greater conviction that the ongoing Ph3 trials will replicate the positive BCVA outcomes seen in the Ph2b.

This is good news for shareholders because if the company is successful with its trials, it could open the door to significant revenues. It explains:

Over a million older Americans currently live with wet AMD, and a further ~200k are diagnosed each year as the population ages. The use of injectable drugs to treat wet AMD has become very well established over the last ~15 years, with the market now >US$5b in the US alone (combining Lucentis/Eylea/Vabysmo sales). The opportunity for sozinibercept is undoubtedly a lucrative one, with genuine blockbuster potential even if only a fraction of the current market is captured.

Big return potential

Bell Potter has reaffirmed its speculative buy rating and $1.30 price target on the ASX stock.

Based on its current share price of 75 cents, this implies potential upside of 73% for investors over the next 12 months.

Commenting on its bullish view of the stock, the broker concludes:

We continue to view the stock as having a favourable risk-reward profile, with substantial upside opportunity in the event of successful Ph3 results. There has been intense pharma competition in recent quarters among the incumbent anti-VEGF-A competitors (Regeneron, Roche, biosimilars), which in our view heightens the strategic appeal of sozinibercept to these parties as a means of diversifying and expanding their blockbuster ophthalmic franchises.

The post Why this speculative ASX stock could rocket 70% appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are climbing:

Capricorn Metals Ltd (ASX: CMM)

The Capricorn Metals share price is up 2.5% to $6.53. This follows the release of the gold miner's quarterly update this morning. The company revealed that its Karlawinda Gold Project delivered another strong quarter of operations, producing 28,702 ounces of gold. This brings half year production to 54,261 ounces, which is ahead of target for the period. As a result, it means Capricorn Metals is "in a strong position to achieve the mid-point of FY25 guidance of 110,000 – 120,000 ounces." The company's all-in sustaining cost (AISC) is expected to be within the FY 2025 cost guidance range of $1,370 to $1,470 per ounce.

IDP Education Ltd (ASX: IEL)

The IDP Education share price is up 7% to $13.13. This appears to have been driven by a broker note out of Macquarie. According to the note, the broker has upgraded IDP Education's shares to an outperform rating with a $16.00 price target. And as I covered here before the market open this morning, IDP Education's shares could be classed as dirt cheap after falling heavily in 2024. Goldman Sachs has a buy rating and lofty $19.00 price target on them.

Life360 Inc (ASX: 360)

The Life360 Inc share price is up over 2.5% to $23.40. This follows a strong night of trade for US tech stocks on Wall Street on Monday. It isn't just Life360 that is rising today. The S&P/ASX All Technology Index is up 1.2% at the time of writing. Life360's shares are now up over 240% since this time last year.

Opthea Ltd (ASX: OPT)

The Opthea share price is up almost 6% to 78.2 cents. This morning, this clinical-stage biopharmaceutical company announced the publication of its Phase 1b trial of sozinibercept combination therapy in diabetic macular edema (DME) in the peer-reviewed journal Translational Vision Science & Technology (TVST). The CEO of Opthea, Frederic Guerard, said: "The DME trial results underpin sozinibercept's potential as a novel, first-in-class VEGF-C/D 'trap' to elevate the standard of care in retinal diseases including DME, by preventing blood vessel growth and vascular leakage in the retina and delivering improved visual and anatomic outcomes when combined with standard-of-care anti-VEGF-A therapies."

The post Why Capricorn Metals, IDP Education, Life360, and Opthea shares are storming higher appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are falling:

Healius Ltd (ASX: HLS)

The Healius share price is down 17% to $1.32. Investors have been selling this healthcare company's shares following the release of a trading update at its annual general meeting. At the event, management said: "In terms of a trading update – Pathology volumes have increased by 4.5% for the year to date, with revenues growing by 5.9%. While this is pleasing, it is worth noting that this does not translate immediately to earnings due to our investment in growing revenues as a key pillar of our strategy, along with labour cost pressures for EBAs and other inflationary increases."

Opthea Ltd (ASX: OPT)

The Opthea share price is down 7% to 65 cents. This is despite the clinical stage biopharmaceutical company announcing that it has received a major research and development (R&D) tax credit from the Australian Taxation Office. Opthea has received A$15.9 million (US$10.4 million) for research and development costs incurred in the 2023/2024 financial year. This is in line with the amount disclosed as a current tax receivable in the company's audited financial statements.

Peninsula Energy Ltd (ASX: PEN)

The Peninsula Energy share price is down 23% to 6.4 cents. This follows the release of an update on the ramp up of the Lance Project. Management notes that delays in preconditioning together with flow rate variability has led the company to further downgrade its projected production guidance for the initial year of production ramp-up in 2025 to approximately 600,000 pounds U3O8. It has also withdrawn all other guidance in relation to 2025. Positively, it doesn't expect 2026 and 2027 to be impacted by these issues.

Wildcat Resources Ltd (ASX: WC8)

The Wildcat Resources share price is down a further 11% to 28 cents. Investors have been selling this lithum explorer's shares this week amid reports that it was raided. However, Wildcat has denied the report, though it advised that it has been issued notices from ASIC. The release states: "The Company has not been raided and no Company property was seized by the Australian Securities and Investments Commission (ASIC) and is not aware that the Company is the subject of an ASIC investigation. The Company can confirm that ASIC previously issued notices to the Company requiring it to produce certain books and provide assistance in relation to trading in the Company's securities in 2023. The Company has complied with these requests."

The post Why Healius, Opthea, Peninsula Energy, and Wildcat shares are falling today appeared first on The Motley Fool Australia.

However, these three ASX All Ords health care shares stood out after hitting new 52-week highs.

3 ASX All Ords health care shares that hit new highs

Pro Medicus Limited (ASX: PME)

Pro Medicus shares hit a new all-time high of $181.28 despite no news from the company on Friday.

This ASX All Ords health care stock has ripped up the charts in 2024, with the share price up 86%.

According to a recent note from top broker Goldman Sachs, Pro Medicus has market leadership in health imaging and competitive advantages over its peers.

The company has reported plenty of new contracts this year. The broker says Pro Medicus has a 7% market share in the United States but expects this to grow to more than 25%.

The broker also cites a strong return on investment (ROI) for the Visage product and exciting prospects for growth due to artificial intelligence (AI).

Goldman has a buy rating on Pro Medicus with a 12-month share price target of $193.

The ASX All Ords healthcare share is up 117% over the past 12 months.

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price reached a new 52-week peak of $1.54 despite no news from the company.

It's been a crazy week for this ASX biotech stock, with share price growth of almost 30% in just five days.

An announcement on Monday seems to be the catalyst for this growth, with no further news since.

Mesoblast announced it had entered into a convertible note subscription agreement with its largest shareholder, Gregory George.

The agreement stipulates that Mesoblast can issue up to US$50 million in convertible notes in US$10 million tranches over a 90-day period if the United States Food and Drug Administration (FDA) approves its lead drug candidate, remestemcel-L (brand name Ryoncil).

The convertible notes have a coupon of 5% per annum on the face value. The funding would enable Mesoblast to immediately launch its go-to-market commercial strategy after the approval.

Ryoncil treats steroid-refractory acute graft versus host disease (SR-aGvHD) in children. The FDA has previously rejected the drug and asked for more medical trials.

Mesoblast resubmitted the drug for consideration in July and expects a decision by 7 January 2025.

The ASX 300 biotech share is up 314% over the past 12 months.

Opthea Ltd (ASX: OPT)

This ASX All Ords health care stock touched a new 52-week high of 87 cents on Friday.

This clinical-stage biopharmaceutical company is focused on developing treatments for common and progressive eye diseases.

These include wet age-related macular degeneration (wet AMD), one of the leading causes of blindness in older adults, and diabetic macular edema (DME).

Opthea's lead product, sozinibercept, is being evaluated in two phase 3 clinical trials. It is being used in combination with standard-of-care anti-VEGF-A monotherapies to see if it achieves better results for patients.

The company anticipates top-line readouts in early 2Q CY25 (COAST trial) and mid-CY25 (SHORE trial). If successful, Opthea hopes to apply for FDA approval.

The company did not issue any price-sensitive news today.

The ASX All Ords health care share has risen by 166% over the past 12 months.

The post 3 ASX All Ords health care shares that reached 52-week peaks today appeared first on The Motley Fool Australia.

The S&P/ASX 200 Health Care Index (ASX: XHJ) is up 0.46%, while the benchmark ASX 200 is down 0.39%.

At the time of writing, health care is the leading market sector of the ASX 200 today.

Stuart Bromley from the Medallion Financial Group has revealed his two buying picks among ASX pharmaceutical shares this month.

Let's take a look.

Broker says buy on these 2 ASX pharmaceutical shares

Opthea Ltd (ASX: OPT)

Opthea is a clinical-stage biopharmaceutical company that is developing drugs to treat common and progressive eye retinal diseases.

These include wet age-related macular degeneration (wet AMD), one of the leading causes of vision loss for older adults, and diabetic macular edema (DME).

Opthea's lead product candidate is sozinibercept.

The company is testing the drug in two phase 3 clinical trials, where it is used in combination with standard-of-care anti-VEGF-A monotherapies to try to achieve superior outcomes.

The company anticipates top-line readouts in early 2Q CY25 (COAST trial) and mid-CY25 (SHORE trial). If successful, Opthea hopes to apply for United States Food and Drug Administration approval.

In June, the company conducted a capital raising at 40 cents a share to fund phase 3 trials and strengthen its balance sheet.

As the following chart shows, this ASX pharmaceutical share has dipped and then lifted sharply in recent months.

The Opthea share price has risen by 120% since 1 July and 166% over the past 12 months.

Bromley told The Bull:

Results from phase 2 trials were encouraging. In June, OPT raised almost $230 million to carry it through phase 3 clinical trials, with results expected mid next year.

We would expect to see significant share price upside if the results are positive. But there is risk involved. The share price has been enjoying favourable momentum since July.

The Opthea share price is currently trading at 77 cents, down 0.39% on Tuesday.

LTR Pharma Ltd (ASX: LTP)

LTR Pharma is seeking to commercialise a nasal spray called Spontan that treats erectile dysfunction.

The company says the spray works within 9 minutes compared to 56 minutes for traditional tablets.

Following a successful clinical trial, Australian medical providers have started prescribing Spontan under the Therapeutic Goods Administration (TGA) Special Access Scheme (SAS).

Australian men are the first in the world to have access to Spontan.

Last month, LTR Pharma announced a co-development global markets agreement for Sponton.

Bromley commented on the company's progress:

In August, the company announced a first select group of patients had been prescribed Spontan under the TGA (Therapeutic Goods Administration) authorised prescriber scheme.

In July, the company raised $10.5 million via a share placement to advance Spontan's regulatory pathways and expand its research and development pipeline.

Keep up to date with news developments as Spontan may potentially become an exciting prospect.

This ASX pharmaceutical share has risen 442% over the past six months and 342% over the past year.

The LTR Pharma share price is currently trading at $1.68, up 0.90% on Tuesday.

The post 'Exciting prospect': 2 ASX pharmaceutical shares to keep a close eye on appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Atlas Arteria Group (ASX: ALX)

The Atlas Arteria share price is down 4.5% to $4.64. This has been driven by the toll road operator's shares going ex-dividend this morning. Last month, Atlas Arteria released its half year results and reported a 3.2% increase in toll revenue but a 2.9% decline in EBITDA. This led to the company declaring a 20 cents per share unfranked interim dividend. This will now be paid to eligible shareholders next month on 7 October. The good news is that management plans to pay another 20 cents per share dividend with its full year results in February, bringing its total dividends to 40 cents per share. This equates to an 8.2% dividend yield based on yesterday's close price.

Coles Group Ltd (ASX: COL)

The Coles share price is down almost 3% to $18.10. Investors have been selling Coles and Woolworths Group Ltd (ASX: WOW) shares this week after the ACCC took them both to court. The competition regulator is alleging that the two supermarket giants breached the Australian Consumer Law by misleading consumers through discount pricing claims on hundreds of common supermarket products.

Healius Ltd (ASX: HLS)

The Healius share price is down 4.5% to $1.65. This may have been caused by some profit taking after a strong gain on Monday following the announcement of an asset sale. In addition, the team at Citi has responded to the news by reaffirming its sell rating and $1.50 price target on the pathology company's shares. The broker has concerns over pathology margins in the near term. Though, it concedes that the sale of its Lumus imaging business to Affinity Equity Partners will leave it with a strong balance sheet.

Opthea Ltd (ASX: OPT)

The Opthea share price is down 2.5% to 71.2 cents. This may also have been driven by profit taking. This clinical-stage biopharmaceutical company, which is developing novel therapies to treat highly prevalent and progressive retinal diseases, has been a strong performer recently. So much so, its shares remain up over 30% since this time last month after today's pullback. Positive progress with its sozinibercept Phase 3 wet AMD program and its inclusion in the ASX 300 index have been boosting its shares.

The post Why Atlas Arteria, Coles, Healius, and Opthea shares are falling today appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising:

Appen Ltd (ASX: APX)

The Appen share price is up 12% to $1.98. This is despite there being no news out of the artificial intelligence data services company on Monday. However, it is worth noting that a big improvement in the company's performance has got investors excited recently. So much so, Appen's shares are now up more than 300% over the past two months. Last month, Appen released its half year results and revealed a $22.4 million improvement in its net loss after tax. It wouldn't be surprising if the company took advantage of this rally to raise funds and shore up its balance sheet further.

Lotus Resources Ltd (ASX: LOT)

The Lotus Resources share price is up 9% to 25 cents. This morning, analysts at Bell Potter reaffirmed their speculative buy rating on this uranium developer's shares with a reduced price target of 50 cents (from 70 cents). This suggests that its shares could double from current levels. In response to a disappointing scoping study, it said: "Despite this update, we continue to see material upside for LOT with the progression of Kayelekera which is due to recommence production over the coming year."

Opthea Ltd (ASX: OPT)

The Opthea share price is up 4.5% to 74.2 cents. This may have been driven by Opthea being added to the ASX 300 index this morning. It is a clinical-stage biopharmaceutical company developing novel therapies to treat highly prevalent and progressive retinal diseases. This includes wet age-related macular degeneration (wet AMD). CEO, Frederic Guerard, said: "Opthea's addition to the S&P/ASX 300 Index reflects the Company's strengthened balance sheet with proceeds from the recent financing completed in July 2024. We also reached a significant milestone by completing enrollment of close to 2,000 patients in the sozinibercept Phase 3 wet AMD program."

Paladin Energy Ltd (ASX: PDN)

The Paladin Energy share price is up over 7% to $10.11. Investors have been buying ASX uranium stocks on Monday after global giant Microsoft (NASDAQ: MSFT) turned to nuclear power to fuel its artificial intelligence ambitions. It has signed a deal with Constellation Energy (NASDAQ: CEG), which will help resurrect the Three Mile Island nuclear plant in Pennsylvania.

The post Why Appen, Lotus, Opthea, and Paladin Energy shares are surging today appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back today are listed below. Here's why they are rising:

Lotus Resources Ltd (ASX: LOT)

The Lotus Resources share price is up 6.5% to 24.5 cents. This follows the release of an update from the uranium developer this morning. Lotus Resources has released the scoping study for its Letlhakane Uranium Project in Botswana. It has confirmed the project's potential to support an economically viable long-life operation under a variety of uranium price scenarios. Lotus is developing Letlhakane in parallel with planning for the restart of production at the Kayelekera Uranium Project in Malawi in 2025. This is part of its aim of becoming a globally significant uranium producer.

Opthea Ltd (ASX: OPT)

The Opthea share price is up 6% to 70 cents. This morning, this clinical-stage biopharmaceutical company announced the successful completion of its drug substance Process Performance Qualification (PPQ) campaign for sozinibercept. It is a drug aiming to treat wet age-related macular degeneration (wet AMD). The PPQ campaign consisted of the production of three successful consecutive commercial-scale drug substance batches required for the validation of Opthea's manufacturing process. The batches have been produced following an extensive manufacturing process development program. Management believes this is "an important step towards de-risking the program and a potential biologics license application (BLA) filing of sozinibercept in wet AMD."

Qoria Ltd (ASX: QOR)

The Qoria share price is up 3% to 35.5 cents. This has been driven by news that the digital safety and student wellbeing solutions provider has signed a partnership with Schools Broadband. It is the UK's largest managed service provider to K12. Under the exclusive partnership, Schools Broadband will offer Qoria's student monitoring solution to their UK customers.

Sims Ltd (ASX: SGM)

The Sims share price is up 11% to $12.24. Investors have been buying the scrap metal company's shares following the release of a trading update. Sims revealed that despite ongoing market challenges across all regions, the Metal businesses are projected to deliver estimated EBIT of $55 million in the first quarter of FY 2025. Sims CEO, Stephen Mikkelsen, commented: "It is encouraging to see the improved performance of our Metal businesses despite the challenging market conditions, particularly as we refocused our portfolio. I am especially pleased with the strong results in NAM, which highlight the successful execution of our strategy in a difficult market and the team's commitment to organisational adjustments."

The post Why Lotus Resources, Opthea, Qoria, and Sims shares are charging higher today appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back today are listed below. Here's why they are rising:

ARB Corporation Ltd (ASX: ARB)

The ARB share price is up 6% to $42.21. This follows news that the 4×4 automotive parts manufacturer is increasing its presence in the United States. According to the release, its US based associate, ORW USA, has announced a conditional agreement to acquire the US-based 4 Wheel Parts business from Hoonigan for US$30 million. 4 Wheel Parts owns 42 retail stores and associated online stores. Should the acquisition proceed, ORW USA will settle the purchase using additional funding provided by its shareholders. This will see ARB increase its shareholding in ORW from 30% to 50%. ARB will separately acquire the Poison Spyder brand from Hoonigan for US$1 million.

Guzman Y Gomez Ltd (ASX: GYG)

The Guzman Y Gomez share price is up 5% to $40.40. This has been driven by news that the quick service restaurant operator will be added to the ASX 200 index at the next quarterly rebalance. The company's shares are one of three that will join the benchmark index on 23 September. This is good news for two reasons. One is that its inclusion in a major index means that index funds have to buy shares to reflect the change. The second is that fund managers with strict investment mandates may now be free to invest in Guzman Y Gomez should they want to.

Opthea Ltd (ASX: OPT)

The Opthea share price is up 8.5% to 58 cents. This biopharmaceutical company's shares will be added to the ASX 300 index at the next rebalance later this month. This may have given its shares a boost today. In addition, the release of a corporate presentation may have caught the eye of investors. Opthea estimates that it has a $15 billion market opportunity for the VEGF-A Inhibitor it is developing.

Yancoal Australia Ltd (ASX: YAL)

The Yancoal share price is up 4% to $5.50. This is another share rising thanks to its inclusion in the ASX 200 index at the quarterly rebalance. The coal miner's CEO, David Moult, was pleased with the news. He said: "We see the Company's inclusion in the S&P ASX indices providing a further opportunity to expand our investor base and bolster the trading liquidity of our shares."

The post Why ARB, Guzman Y Gomez, Opthea, and Yancoal shares are storming higher appeared first on The Motley Fool Australia.

Considering that the small-cap sector's potential for outsized share price gains comes with added risks, we take a look at two ASX healthcare stocks fund managers have tipped as buys.

ASX biotech stock well-funded post-capital raise

The first small-cap company tipped as a buy is Opthea Ltd (ASX: OPT), according to Medallion Financial Group's Philippe Bui (courtesy of The Bull).

"This biopharmaceutical company is developing a new drug for macular degeneration. Macular degeneration is the leading cause of blindness for people aged 50 and older," Bui said.

And it could be well worth owning some shares in this ASX healthcare stock before mid-2025.

"The company is in the process of completing US Food and Drug Administration phase 3 clinical trials, with results due in the June quarter of 2025," Bui explained.

Success with those FDA trials would potentially offer a sizeable boost to the Opthea share price.

And Opthea's balance sheet is in solid shape.

"The company has lifted available funds following a capital raising at 40 cents a share," Bui said.

At Opthea's latest quarterly results, the company reported a cash balance of US$172.4 million as of 30 June, up from US$101.6 million in the prior quarter.

The Opthea share price has increased 32% over the past 12 months, closing at 54 cents a share on Monday.

Which brings us to the second small-cap ASX healthcare stock tipped as a buy (courtesy of The Bull).

Small-cap ASX healthcare stock could expand into US

BW Equities' Tom Bleakley has a buy rating on Botanix Pharmaceuticals Ltd (ASX: BOT), with the US FDA also in playing a role in its fortunes.

"The FDA has approved Botanix Pharmaceuticals' Sofdra topical gel, a prescription medicine for treating primary axillary hyperhidrosis (excessive underarm sweating) in adults and children aged nine and beyond," Bleakley said.

Bleakley added:

The product is already marketed in Japan, but the US potentially provides a much bigger opportunity. BOT, a clinical dermatology company, says about 10 million people in the US suffer from excessive underarm sweating.

FDA approval paints a brighter revenue outlook.

The Botanix share price has rocketed 100% over the past 12 months, closing yesterday at 36 cents a share.

The small-cap ASX healthcare stock completed a successful institutional placement in June, raising $70 million.

As at 30 June, Botanix had a cash position of $79.3 million with no debt.

The post 2 promising small-cap ASX healthcare stocks to buy now appeared first on The Motley Fool Australia.

That's because analysts at Bell Potter have just picked out one speculative ASX stock that they believe could rise materially from current levels.

Which speculative ASX stock?

The stock in question is Opthea Ltd (ASX: OPT).

It is a biopharmaceutical company focused on developing novel therapies to address the unmet need in the treatment of highly prevalent and progressive retinal diseases. This includes wet age-related macular degeneration (wet AMD) and diabetic macular edema (DME).

Opthea's lead product candidate is sozinibercept. It is being evaluated in two pivotal phase 3 clinical trials for use in combination with standard-of-care anti-VEGF-A monotherapies to improve overall efficacy and deliver superior vision gains compared to the current standard of care.

Bell Potter notes that this speculative ASX stock has a huge market opportunity if sozinibercept is approved. It commented:

Wet AMD is the leading cause of vision loss for older adults, with over a million older Americans currently living with wet AMD and a further ~200k diagnosed each year as the population ages. The wet AMD market is lucrative and well-established: four treatments are widely used and together generate >US$5b of annual sales in the US. However, each of these treatments provide essentially the same level of vision improvement with differentiation solely based on dosing frequency.

It also highlights that sozinibercept would be the first drug in a long time to deliver improved vision outcomes in wet AMD. The broker adds:

Sozinibercept differs from these treatments by targeting a novel pathway in the retina (targeting VEGF-C/D as opposed to VEGF-A). Combining sozinibercept and existing standard-of-care treatment is intended to provide superior vision outcomes compared to standard-of-care treatment alone. If successful, sozinibercept would become the first drug in >15 years to improve vision outcomes in wet AMD.

2025 could be a big year

After years of trials, the broker notes that it won't be long until we finally get a decision on sozinibercept. And given how previous trials have been statistically significant, it is optimistic that a good readout is coming next year. It adds:

In a randomised Phase 2b trial (n=366) completed in 2019, the combination of sozinibercept and Lucentis demonstrated statistically significant improvements in vision outcomes compared to Lucentis alone (p=0.01). Following on from these positive results, OPT initiated two large-scale Phase 3 trials (each in ~990 wet AMD patients) to support global approval of sozinibercept in wet AMD. Both Phase 3 trials have been fully recruited, and the all-important topline readouts are effectively locked in for early Q2 CY25 (COAST trial) and mid-CY25 (SHORE trial).

'Blockbuster opportunity'

In light of the above, this morning Bell Potter has initiated coverage on this ASX stock with a speculative buy rating and 70 cents price target.

Based on its current share price of 40.5 cents, this implies potential upside of 73% for investors over the next 12 months. It concludes:

We initiate coverage with a speculative BUY recommendation and $0.70 valuation. OPT is financed through to what will be one of the biggest Phase 3 readouts for an ASX-listed biotech in recent years. Success in the upcoming readouts will be a huge value-inflection event and majorly de-risk sozinibercept and its blockbuster opportunity.

The post 'Blockbuster opportunity': This speculative ASX stock could rise 70% appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are storming higher:

Atturra Ltd (ASX: ATA)

The Atturra share price is up 7% to 78.2 cents. Investors have been buying this technology services company's shares after it announced an agreement to acquire Exent Holdings. Attura is paying $6 million in upfront consideration with earn-out/post-completion consideration of up to $2 million in cash. Management notes that it is a strategically aligned acquisition that helps Atturra extend its advisory and consulting capabilities outside of Canberra and Defence and expand the practice nationally. The transaction is expected to complete on or around 31 July.

Bravura Solutions Ltd (ASX: BVS)

The Bravura Solutions share price is up almost 5% to $1.12. This follows the release of a guidance update from the wealth management software solutions company. Bravura advised that it is upgrading its FY 2024 EBITDA guidance to approximately $25 million. This is up from its previous guidance range of $18 million to $22 million. Management advised that its upgraded guidance follows a successful transformation execution over the course of the year which has resulted in the stabilisation of the business and continued progress towards rightsizing the cost base.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up 9% to 12 cents. Investors have been buying this lithium miner's shares this month following a couple of positive updates. One was the release of an update on its production in FY 2024. Core Lithium advised that it exceeded its FY 2024 production guidance with production of 95,020 dry metric tonnes (dmt) of spodumene concentrate. This led to Core Lithium reporting an unaudited cash balance of $87.6 million at 30 June. Also going down well with investors was the release of the company's exploration update last week.

Opthea Ltd (ASX: OPT)

The Opthea share price is up 8% to 40 cents. This morning, the clinical-stage biopharmaceutical company revealed that it has successfully completed the fully underwritten retail component of its entitlement offer. The retail entitlement offer raised approximately A$55.9 million, which brought the total raised to a whopping A$227.3 million at 40 cents per new share. The net proceeds will fund the company through the anticipated Phase 3 topline data readouts for COAST (Combination OPT-302 with Aflibercept Study), and ShORe (Study of OPT-302 in combination with Ranibizumab). In addition, the funds are intended to be used to progress chemistry, manufacturing, and controls activities, Biologics License Application preparations for FDA approval, and for general corporate purposes.

The post Why Atturra, Bravura, Core Lithium, and Opthea shares are racing higher today appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is down 4% to 9 cents. This is despite there being no news out of the lithium miner today. However, it is worth noting that most lithium shares are falling again on Friday following yet another red session for their peers on Wall Street. This latest decline means that Core Lithium's shares are now down over 90% since this time last year. They have also hit a new multi-year low on Friday.

Deterra Royalties Ltd (ASX: DRR)

The Deterra Royalties share price is down 7% to $4.14. While this mining royalties company has announced a major acquisition, this has been overshadowed by a second announcement. The latter announcement reveals that Deterra Royalties is making a major change to its dividend policy. At present, it pays out 100% of net profit after tax. However, from FY 2025, the company will change its target payout ratio to a minimum of 50% of its profits.

Northern Star Resources Ltd (ASX: NST)

The Northern Star Resources share price is down 3% to $13.30. This follows a reasonably sharp pullback in the gold price overnight which is weighing on the industry today. This has seen the S&P/ASX All Ordinaries Gold index fall by 2% this afternoon. Traders appear to have been selling gold to take profit after a decent run.

Opthea Ltd (ASX: OPT)

The Opthea share price is down 23% to 37.5 cents. This follows news that the retinal disease focused clinical-stage biopharmaceutical company has successfully completed the institutional component of its capital raising. Optea's institutional entitlement offer raised approximately $161.5 million at a discount of 40 cents per new share. Eligible institutional shareholders took up approximately 61.4% of their entitlements, with the shortfall placed to both new and existing institutional shareholders and to the underwriter. The proceeds from the capital raising will be used to fund the company through the anticipated Phase 3 topline data readouts. CEO Frederic Guerard said: "We appreciate the strong support from our shareholders, and from new investors, who share our belief that sozinibercept has the potential to transform patient outcomes with superior vision gains, which continues to be a significant unmet need in wet AMD."

The post Why Core Lithium, Deterra Royalties, Northern Star, and Opthea shares are dropping appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are falling:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is down almost 3% to $5.85. This is despite there being no news out of the infant formula company. However, it is possible that profit taking could be weighing on its shares today. After all, they remain up approximately 38% year to date despite this decline. Investors have been bidding the A2 Milk share price higher this year thanks to a stronger than expected performance in FY 2024. During the first half, A2 Milk reported a 3.7% increase in revenue to NZ$812.1 million and a 15.6% jump in net profit after tax to NZ$85.3 million.

Lindsay Australia Ltd (ASX: LAU)

The Lindsay Australia share price is down 2% to $1.03. This decline has been driven by the logistic services provider's shares going ex-dividend for its interim dividend. In February, Lindsay Australia released its half-year results and reported a 23.9% increase in operating revenue to a record of $417.9 million and a 21.7% jump in underlying EBITDA to a record of $52.1 million. This allowed the company's board to increase its interim dividend by 10.5% to a fully franked 2.1 cents per share. Eligible shareholders can now look forward to receiving this dividend later this month on April 19.

Meridian Energy Ltd (ASX: MEZ)

The Meridian Energy share price is down 2% to $5.47. Investors have been selling this energy company's shares despite there being no news out of it today. Though, given that utilities are generally regarded as safe haven assets, it's possible that some investors are dumping its shares today and moving back into risk assets after the market recovered from yesterday's selloff. Meridian Energy shares remain up 10% over the last 12 months.

Opthea Ltd (ASX: OPT)

The Opthea share price is down over 2.5% to 73 cents. This morning, this retinal disease focused global biopharmaceutical company released a presentation relating to its Sozinibercept product. Management believes it has the potential to be the first product in more than 15 years to improve visual outcomes. It is addressing a high unmet need for wet age-related macular degeneration (AMD). And while the company estimates that it has a multi-billion dollar commercial opportunity in a growing market, investors don't appear to be overly convinced based on its share price performance.

The post Why A2 Milk, Lindsay Australia, Meridian Energy, and Opthea shares are falling today appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are falling:

Opthea Ltd (ASX: OPT)

The Opthea share price is down 6.5% to 57 cents. This is despite there being no news out of the ophthalmology-focused biopharmaceutical company. However, it is worth noting that its shares have been on fire recently following a funding update. So, this decline could have been driven by profit-taking. Opthea's shares remain up 24% since the Christmas break.

Pantoro Ltd (ASX: PNR)

The Pantoro share price is down a further 6% to 4.6 cents. This gold miner's shares have come under pressure this week after it released a quarterly update. Although Pantoro reported another increase in gold production, this appears to have been short of expectations after it faced challenges in December.

Premier Investments Limited (ASX: PMV)

The Premier Investments share price is down almost 1.5% to $26.48. This has been driven by the retail giant's shares going ex-dividend for its latest dividend. When the Peter Alexander and Smiggle owner released its results late last year, it declared a final fully franked dividend of 60 cents per share. This will be paid to eligible shareholders on 24 January.

Wildcat Resources Ltd (ASX: WC8)

The Wildcat share price is down 1.5% to 66.5 cents. This is despite the lithium explorer announcing that it has recommenced drilling activities at the Tabba Tabba Lithium Project, near Port Hedland, Western Australia. Management said: "The crews have been busy over the Christmas break upgrading our camp and site infrastructure for the continuation and expansion of our aggressive drill programs at Tabba Tabba."

The post Why Opthea, Pantoro, Premier Investments, and Wildcat shares are falling appeared first on The Motley Fool Australia.