Opthea’s staff are paying for its clinical failures. Days after back-to-back flops sank an eye disease asset, the biotech revealed plans to lay off 65% of its staff and operate with a skeleton crew to save money.
The company’s plans unravelled rapidly last month as sozinibercept, an inhibitor of vascular endothelial growth factors C and D, failed two phase 3 trials in one week. First, sozinibercept came up short against Regeneron’s blockbuster Eylea. Then, after bringing forward the readout in response to the first flop, the biotech reported the failure of sozinibercept to beat Lucentis in another phase 3 trial.
Thursday, Opthea provided evidence for the adage bad news comes in threes by capping off a rapid-fire hat-trick of downbeat updates. The third piece of bad news centered on the biotech’s employees, 65% of whom are now out of a job.
Opthea, which ended June with 34 full-time employees, is laying off staff to reduce its spending. Once the workforce reduction is complete, which Opthea expects to happen May 1, the biotech said it will have “a limited number of employees” who it is keeping on “to ensure the compliant termination of clinical trial activities and oversee administration operations.”
The biotech estimates it ended March with $100 million. Opthea began talking to its investors after the first failure and said it is continuing to “explore possible options to deliver the best outcome for the company and its shareholders.” Under a 2023 deal, Opthea’s investors secured the right to terminate their funding agreement with the biotech if the phase 3 trials missed their primary endpoints.
With talks ongoing, Opthea said its ability to continue as a going concern remains uncertain. The biotech was all-in on sozinibercept, with the molecule featuring in all programs in its public pipeline, and its other assets include cash and a Nasdaq listing.