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Tax credit strengthens Opthea’s balance sheet; follows AU$175m IPO on US exchange

Melbourne biopharmaceutical company Opthea has received an $8.5 million research and development (R&D) tax credit from the Australian tax authority ahead of pivotal Phase 3 trials of its lead drug candidate.

The cash incentive – announced last month – is for research and development costs incurred in the 2019/2020 financial year and follows its debut on a US stock exchange where it reportedly produced the largest initial public offering (IPO) conducted by a development-stage Australian life sciences company.

Its therapy OPT-302 – a VEGF-C/D inhibitor – is being trialled in combination with VEGF-A inhibitors aflibercept (Eylea) and ranibizumab (Lucentis) for nAMD and diabetic macular edema (DME).

Megan Baldwin.

Opthea recently announced it would conduct two concurrent, global, multicentre, randomised, sham-controlled Phase 3 studies evaluating OPT-302 in combination with ranibizumab (Lucentis) or aflibercept (Eylea) for nAMD next year. If successful, OPT-302 could be administered with two approved standard of care VEGF-A inhibitors that had combined sales for retinal diseases of US$11.9 billion ($AU16.3 b) in 2019.

Dr Megan Baldwin, CEO and managing director of Opthea, commented: “This R&D tax incentive credit of $8.5 million further strengthens our balance sheet as Opthea prepares to initiate patient recruitment into pivotal Phase 3 clinical trials of OPT-302 in wet AMD early in 2021.”

The Australian Tax Office’s R&D Tax Incentive is as a Federal Government program under which companies can receive cash incentives for 43.5% of eligible research and development expenditure.

Meanwhile, the ASX-listed firm also recently conducted an IPO on the Manhattan-based Nasdaq stock exchange where it raised US$128.2 million (AU$175 m).

Partners from the international law firm Cooley said they advised Opthea on its IPO of 8,563,300 American Depository Shares. The underwriters have the option to purchase up to an additional 1,425,000 shares.

According to Cooley, Opthea’s Nadsaq debut marked the largest IPO conducted by a development-stage Australian life sciences company, as well as the largest Australian biotech capital raise in a secondary Nasdaq IPO.

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