We provide an update on HM1’s investment in Opthea (OPT.ASX), a biopharmaceutical company dual-listed on the ASX and Nasdaq. Prior to its trading suspension, Opthea represented approximately 2.4% of the HM1 portfolio (or 8 cents per share).

Unfortunately, the results of Opthea’s Phase III clinical trials for its lead drug candidate, OPT-302, were not successful. The future of the company is now highly uncertain. This is a deeply disappointing outcome, particularly given the high level of conviction held by Regal Funds (Regal), one of our Core Fund Managers, in Opthea’s potential for commercial success.

We recognise that investors will rightly have questions around the rationale for the investment. Regal has shared the following background to provide context on their decision-making, the developments to date, and next steps moving forward.

Opthea is a global biopharmaceutical company developing treatments for vision-threatening eye diseases such as age-related macular degeneration (AMD), with OPT-302 as its lead candidate. Regal has followed the company closely for more than nine years.

Their conviction was grounded in several factors: strong foundation of scientific innovation, successful early-stage clinical trial results, a significant commercial opportunity in the growing US$15 billion global AMD market, active corporate interest, and a long-standing relationship with Opthea’s leadership. The company’s Phase I and II trial results were statistically significant and exceeded the existing standard of care, reinforcing confidence in its long-term potential.

Opthea’s management also attracted highly regarded pharmaceutical experts, including Chair Dr Jeremy Levin, former President and CEO of global pharmaceutical company Teva. In June 2024, the company raised capital at $0.40 per share to fund two Phase III trials testing OPT-302 in combination with existing treatments. As recently as February 2025, Opthea had a market capitalisation of over $1 billion ($1.15 per share), was supported by multiple research houses, and had secured backing from one of the world’s largest healthcare investors.

However, in late March 2025, results from both Phase III trials were released, and both failed to demonstrate meaningful improvement over the current standard of care. As a result, all trials have been discontinued, and the stock remains suspended from trading.

Following this outcome, the Regal Valuation Committee has revalued Opthea to zero across all its funds. HM1 has taken the same action, and this is now reflected in our net tangible assets (NTA) at month end.

We acknowledge we got Opthea wrong. While early-stage data was encouraging, the investment ultimately resulted in a binary outcome that did not play out as expected. We are reviewing the process and lessons from this investment.