Opthea Ltd.(OPT)
The second penny stock we’ll look at here is Opthea. This Australian medical research company is focused on the treatment of various eye diseases, and has worked on diabetic macular edema, corneal neovascularization and transplantation, and dry eye disease. The company’s current work is targeting wet AMD, or wet age-related macular degeneration. This is a less common development of the dry AMD, and can occur at any stage of the more common condition’s development. Wet AMD typically causes faster vision loss than the dry variant, and occurs when abnormal blood vessel growth at the back of the eye damages the macula.
Following that track, Opthea has developed OPT-302, a novel therapeutic agent now dubbed sozinibercept. This agent acts as a VEGF-C/D ‘trap’ and is designed to be used in combination therapy with existing anti-VEGF-A agents, which constitute the current standard of care. Sozinibercept has shown promise in earlier studies and offers an opportunity to meet the significant unmet medical needs of patients with wet AMD—an important development, given that most patients exhibit a sub-optimal response to current treatments. Additionally, this drug candidate has demonstrated some promise in treating diabetic macular edema, or DME.
The most advanced clinical trial in the company’s pipeline focuses on the treatment of wet AMD. Opthea has two Phase 3 trials in progress, ShORe, which is testing the drug in combination with ranibizumab, and COAST, which is testing OPT-302 alongside aflibercept. The company announced in February that it had completed enrollment in the COAST trial, and that enrollment in the ShORe trial was expected to reach completion during calendar 2Q24. Top-line results from both trials are anticipated to be available in mid-2025.
5-star analyst Hartaj Singh, one of Oppenheimer’s biotech experts, has looked into the potential of Opthea’s sozinibercept and is impressed. He notes the early successes in safety profiling, and says of the company and its drug candidate, “We believe that OPT has many of the qualities we are desirous of in a small-cap biotech company: an execution-focused management team; validated science and technology; and compelling early/mid-stage clinical data… Sozinibercept has the potential to provide vision benefit on top of any anti-VEGFA agent with a well tolerated safety profile based on compelling Phase 2B results… Other emerging approaches and modalities in wAMD focus on better durability, with sozinibercept being the only agent aiming to provide a vision benefit…”
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