Opthea has discontinued its sozinibercept program after Phase 3 trial failures, leading to drastic staff cuts and a sharp decline in cash reserves amid ongoing funding negotiations.
- Discontinuation of sozinibercept development following failed Phase 3 trials
- Staff reduced by approximately 85%, board halved
- Operational spending on ShORe and COAST trials completed
- Cash reserves fell from US$101.4m to US$48.4m in Q4 FY25
- Active negotiations ongoing with Development Funding Agreement investors
Trial Failures Prompt Strategic Shift
Opthea Limited, a clinical-stage biopharmaceutical company focused on treatments targeting VEGF-C and VEGF-D, has announced a significant pivot following the disappointing results of its Phase 3 COAST and ShORe clinical trials. Both trials failed to meet their primary endpoints, leading the company and its Development Funding Agreement (DFA) investors to agree on an immediate discontinuation of the sozinibercept program for wet age-related macular degeneration (wet AMD).
This decision marks a critical juncture for Opthea, which had pinned considerable hopes on OPT-302 as a potential breakthrough therapy. The cessation of these programs has triggered a comprehensive operational wind-down, including the termination of all contracts related to the trials.
Dramatic Cost-Cutting Measures
In response to the trial outcomes and the need to conserve cash, Opthea has implemented an extensive reduction in its workforce, cutting approximately 85% of its staff and halving the size of its board of directors. These measures reflect the company’s urgent need to realign its cost structure with its revised strategic outlook.
Operational expenses for the quarter ending June 30, 2025, were heavily impacted by one-off costs associated with closing the trials and staff reductions, amounting to US$52.9 million. Personnel costs alone surged to US$13.8 million, more than doubling from the previous quarter, underscoring the financial burden of restructuring.
Cash Position and Financial Outlook
Opthea’s cash reserves have taken a significant hit, falling from US$101.4 million at the end of March 2025 to US$48.4 million by June 30, 2025. The net operating cash outflow for the quarter was US$53.5 million, reflecting the high costs of winding down the clinical programs and restructuring.
Despite this cash depletion, the company remains in active negotiations with its DFA investors to explore options that could secure its future. However, Opthea acknowledges material uncertainty regarding its ability to continue as a going concern, and its shares remain suspended from trading on both the ASX and NASDAQ.
Looking Ahead
With the discontinuation of its key development programs, Opthea is now evaluating its next steps. The company anticipates that future cash burn will decrease significantly due to the closure of external contracts and a leaner operational footprint. Nonetheless, the path forward remains contingent on the outcome of ongoing funding discussions and strategic decisions yet to be made.
CEO Frederic Guerard has emphasized the company’s commitment to exploring all avenues to deliver the best possible outcome for shareholders, signaling a period of transformation and uncertainty ahead.
Bottom Line?
Opthea’s future hinges on funding talks and strategic pivots as it navigates post-trial challenges and a shrinking cash runway.
Questions in the middle?
- What specific options are being considered in negotiations with DFA investors?
- Will Opthea seek new partnerships or capital raises to extend its operational runway?
- How will the company’s strategic focus shift following the discontinuation of sozinibercept?