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Troubled biotech stock Opthea (ASX:OPT), still in the process of crisis talks with investors, has flagged a workforce reduction of -65%.
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This comes not long after Opthea’s flagship Phase 3 trial treating age-related vision loss came up empty-handed because its drug of interest simply wasn’t proven to be effective.
Those results prompted Opthea to abandon not one, but two trials; and now, what was a former favourite among HotCopper‘s myriad biotech watchers, is quickly becoming a letdown.
Probably nobody is more aware of this than Opthea.
“As previously disclosed, the company remains in active negotiations with its [keystone] investors… to explore possible options to deliver the best outcome for the company and its shareholders,” the company wrote.
“In light of these matters, there remains material uncertainty as to Opthea’s ability to continue as a going concern… Opthea cannot be certain as to the outcome of those discussions or when that outcome may become known.”
If it’s getting ready to wind things up, getting rid of more than half its workforce seems like the first step of what that would look like.
What should shareholders make of Opthea’s update? That would depend on when it starts trading again, first and foremost, and to that end, Opthea declared it will remain suspended until it knows whether or not it’s going to carry forward.
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In other words, whether the company is going to de-list. Opthea provided an estimate of $100M in cash at the end of March.
A decent sum, but the problem with any biotech venture is it can easily take half a decade to get anywhere – and patience on those timescales mightn’t be pumping through the hearts of its investors.
OPT last traded at 60cps before the brakes were pulled.
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