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Opthea Receives A$8.8 million R&D Tax Incentive

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Opthea Limited (ASX:OPT; Nasdaq:OPT) has received an A$8.8 million (US$5.9 million) research and development (R&D) tax credit from the Australian Taxation Office for the 2022/2023 financial year. The cash incentive is for the development of Opthea’s lead candidate OPT-302, strengthening the company’s cash position as it advances its Phase 3 registrational trials for wet AMD treatment.
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The receipt of an A$8.8 million R&D tax credit by Opthea Limited is a strategic financial boost. This incentive enhances the company's liquidity, potentially extending its runway and offering more flexibility in funding ongoing clinical trials. Investors should note the direct impact on Opthea's balance sheet, as such inflows can defer the need for external financing, which might otherwise dilute shareholder value.

Given Opthea's focus on the development of OPT-302 for wet AMD, a condition with significant patient impact, the progress in Phase 3 trials is crucial. The tax credit's timing aligns with these capital-intensive stages, suggesting a positive outlook for the company's fiscal management. However, stakeholders should assess the sustainability of such credits and Opthea's ability to capitalize on them without over-reliance.

Opthea's progress in advancing the Phase 3 registrational trials for OPT-302 addresses a critical need in the treatment of wet AMD, a leading cause of blindness. The tax incentive not only validates the company's R&D efforts but also signals to the market that Opthea is actively managing its resources to mitigate financial risks associated with long-term drug development.

Investors should consider the competitive landscape of wet AMD treatments and the potential market share that OPT-302 could capture if successful. The strategic use of government incentives can provide Opthea with a competitive edge, allowing for more aggressive investment in R&D or marketing upon approval. However, the reliance on government programs may also pose risks if policy changes occur.

The wet Age-related Macular Degeneration (wet AMD) market is a high-stakes arena with a growing patient population. Opthea's receipt of the R&D tax credit is a testament to the significance of its work within this space. For stakeholders, the implication is two-fold: it underscores the potential clinical impact of OPT-302 and the economic support from the Australian government for such endeavors.

Long-term, the development of effective treatments like OPT-302 can lead to market disruption. Should the trials prove successful, there is an opportunity for substantial returns on investment. However, the inherent risks of clinical trials remain and the eventual market entry of OPT-302 will depend on both regulatory approval and market dynamics, including competition and pricing strategies.

MELBOURNE, Australia, Dec. 19, 2023 (GLOBE NEWSWIRE) -- Opthea Limited (ASX:OPT; Nasdaq:OPT), a clinical stage biopharmaceutical company developing novel therapies to treat highly prevalent and progressive retinal diseases, announced today that it has received an A$8.8 million (US$5.9 million) research and development (R&D) tax credit from the Australian Taxation Office. The cash incentive is for research and development costs incurred in the 2022/2023 financial year, and represents the amount disclosed in the company’s audited financial statements at 30 June 2023.

The R&D tax incentive credit relates to both Australian and eligible overseas expenditure for the development of Opthea’s lead candidate OPT-302. The R&D Tax Incentive is as an Australian Federal Government program under which companies can receive cash incentives for 43.5% of eligible research and development expenditure.

Fred Guerard, CEO of Opthea, commented, “The receipt of this A$8.8 million R&D tax incentive credit further strengthens our cash position as Opthea continues to advance its Phase 3 registrational trials, ShORe and COAST, investigating OPT-302 to address the unmet medical need in wet AMD.”

About Opthea Limited

Opthea (Nasdaq:OPT; ASX:OPT) is a biopharmaceutical company developing novel therapies to address the unmet need in the treatment of highly prevalent and progressive retinal diseases, including wet age-related macular degeneration (wet AMD) and diabetic macular edema (DME). Opthea’s lead product candidate OPT-302 is in pivotal Phase 3 clinical trials and being developed for use in combination with anti-VEGF-A monotherapies to achieve broader inhibition of the VEGF family, with the goal of improving overall efficacy and demonstrating superior vision gains over that which can be achieved by inhibiting VEGF-A alone.

Inherent risks of Investment in Biotechnology Companies

There are a number of inherent risks associated with the development of pharmaceutical products to a marketable stage. The lengthy clinical trial process is designed to assess the safety and efficacy of a drug prior to commercialization and a significant proportion of drugs fail one or both of these criteria. Other risks include uncertainty of patent protection and proprietary rights, whether patent applications and issued patents will offer adequate protection to enable product development, the obtaining of necessary drug regulatory authority approvals and difficulties caused by the rapid advancements in technology. Companies such as Opthea are dependent on the success of their research and development projects and on the ability to attract funding to support these activities. Investment in research and development projects cannot be assessed on the same fundamentals as trading and manufacturing enterprises. Therefore, investment in companies specializing in drug development must be regarded as highly speculative. Opthea strongly recommends that professional investment advice be sought prior to such investments.

Authorized for release to ASX by Fred Guerard, CEO

Company & Media Enquiries:

Rudi Michelson
Monsoon Communications
Tel: +61 (0) 3 9620 3333                                                                

Investor:
Hershel Berry
Blueprint Life Science Group
Tel: +1 415 505 3749
hberry@bplifescience.com

Join our email database to receive program updates:
Tel: +61 (0) 3 9826 0399 Email: info@opthea.com Web: www.opthea.com


FAQ

What is the company name and ticker symbol for Opthea Limited?

Opthea Limited's ticker symbols are ASX:OPT and Nasdaq:OPT.

What is the purpose of the A$8.8 million research and development tax credit received by Opthea Limited?

The tax credit is for the research and development costs incurred in the 2022/2023 financial year, specifically for the development of Opthea’s lead candidate OPT-302.

What are the Phase 3 registrational trials ShORe and COAST mentioned in the press release?

ShORe and COAST are Phase 3 trials investigating OPT-302, Opthea’s treatment for wet AMD.

Who is the CEO of Opthea Limited?

Fred Guerard is the CEO of Opthea Limited.

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