Appendix 4E
Preliminary Final Report
O P T H E A L I M I T E D
A B N 3 2 0 0 6 3 4 0 5 6 7
Y E A R E N D E D J U N E 3 0 , 2 0 2 1
R E S U LT S F O R A N N O U N C E M E N T T O T H E M A R K E T
June 30, 2021
$
June 30, 2020
$
Movement
%
Results
Revenues from ordinary activities
440,615
539,514
Loss from ordinary activities after tax attributable to members
(45,344,496)
(11,123,199)
Loss for the year attributable to members
(45,344,496)
(11,123,199)
NTA Backing
Net tangible asset backing per ordinary security
0.39
0.17
Dividend distribution
No dividends have been paid or declared by the entity since the beginning of the current reporting period.
This report is based on the attached audited consolidated financial report.
down
18.3%
Loss has
increased
307.7%
Loss has
increased
307.7%
Appendix 4E 2020 – 2021
1
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AnnuAl RepoRt 2020 – 2021
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Focused on what matters most
Who?
Opthea is a clinical stage biopharmaceutical
company committed to developing innovative
therapies to improve vision in patients with retinal
eye diseases. With an established foundation in
Australia and expanded presence in the United States
following our listing on the U.S. Nasdaq exchange
in 2020, we are well positioned to advance our lead
therapeutic candidate OPT‑302 through Phase 3
clinical trials in support of future registration filings
for marketing approval and commercialization.
What?
Our first‑in‑class novel therapeutic called
OPT‑302, is a VEGF‑C/D ‘trap’, to be used in
combination with standard of care anti‑VEGF‑A
therapies to improve vision in patients, many of
whom respond sub‑optimally or become refractory
to existing treatments.
Why?
Millions of people around the world suffer
from impaired vision as a result of diabetes and
the ageing process. With limited treatment options
currently available for patients, and a large unmet
medical need, our mission is to expeditiously develop
our therapies to improve visual outcomes for patients,
leading to better quality of life.
Contents
2020–2021 HIGHLIGHTS
1
STATISTICS AND NUMBERS
3
PIPELINE TO COMMERCIALIZATION
5
CHAIRMAN’S REPORT
6
CEO’S REPORT
8
10
DIRECTORS’ REPORT
29 MANAGEMENT TEAM
32
IBC CORPORATE INFORMATION
FINANCIAL REPORT
w 2020–2021 Highlights
Aug 21, 2020
Opthea successfully completed End‑of‑Phase 2 meetings with the
U.S. Food and Drug Administration (FDA), and a Scientific Advice meeting
with the European Medicines Agency (EMA), to obtain guidance on the
Phase 3 clinical development plans of OPT‑302 as a treatment for wet AMD.
Aug 24, 2020
Opthea announced plans to conduct a registered public offering and
U.S. listing on the Nasdaq exchange.
Sep 10, 2020
Opthea appointed the Company’s first US‑based director to its Board.
Mr Daniel Spiegelman was appointed Non‑Executive Director and
Chair of the of the Audit and Risk Committee.
Oct 12, 2020 Opthea appointed Dr Jeremy Levin as Chairman of the Board.
Oct 16, 2020
Opthea’s American Depositary Shares (ADSs) began trading on the
Nasdaq Global Select Market under the symbol “OPT.”
Oct 21, 2020 Opthea closed its US$128.2 million Initial Public Offering (IPO) in the U.S.
Oct 27, 2020
Opthea received A$8.5m R&D tax incentive from the Australian Taxation
Office for research and development costs incurred in the 2019/2020
financial year.
Feb 17, 2021
Opthea presented at the 10th Annual SVB Leerink Global Healthcare
Conference and provided corporate update.
Mar 15, 2021
Opthea treated the first patient in the Phase 3 pivotal program of OPT‑302
in patients with treatment‑naïve wet AMD. The first patient was enrolled
by Dr Allen Hu in Maryland, U.S.A.
Mar 17, 2021
Opthea presented at the Oppenheimer 31st Annual Healthcare Conference
and provided a corporate update.
Mar 31, 2021
Opthea received an initial Pediatric Study Plan (iPSP) waiver from the
U.S. FDA for OPT‑302. The Company will not have to conduct an additional
study in the pediatric population for use in the U.S.
Jun 1, 2021
Dr Julia Haller and Ms Judith Robertson were appointed
Non‑Executive Directors, expanding the Board’s strengths in clinical
and commercialization strategy.
Jul 6, 2021
The U.S. FDA granted Fast Track designation for OPT‑302 in combination
with anti‑VEGF‑A therapy for the treatment of patients with wet AMD.
The Fast Track Designation offers benefits to expedite the OPT‑302
Phase 3 clinical program and potential approval process.
Aug 9, 2021
ShORe and COAST Phase 3 clinical trials opened recruitment to patients
in Canada.
Annual Report 2020 – 2021
1
w Did you know
Wet (neovascular) age‑related
macular degeneration is the leading
cause of vision loss in people over
the age of 50.
Did you know
OPT‑302, administered by
injection into the eye, inhibits
VEGF‑C and VEGF‑D to further
block the growth and leakage of
abnormal retinal blood vessels
implicated in mediating treatment
resistance to anti‑VEGF‑A therapies.
2
Opthea Limited
Statistics and Numbers
US$128M
raised in Opthea’s IPO
on Nasdaq exchange
US$11.9BN
2019 worldwide sales
revenue for Lucentis® and
Eylea® in retinal diseases
3.5million people
in the U.S. and Europe
have wet AMD
990patients to be enrolled
into each of Opthea’s
Phase 3 trials,
ShORe and COAST
+14.2
letters mean change in
visual acuity from baseline
to week 24 in Phase 2b
patients receiving OPT‑302
combination therapy
+5.7
letters additional vision
gain in Phase 2b at week
24 in patients with occult and
minimally classic wet AMD
lesions treated with OPT‑302
combination therapy compared
to ranibizumab alone
Zerotherapies targeting
novel mechanisms approved
for wet AMD over past decade
>80%approximate proportion of
wet AMD patients with occult and
minimally classic lesions
2H CY 2023
expected reporting
date for
Phase 3
topline data
2034
year OPT‑302 Composition
of Matter patents extend to,
with further data and market
exclusivity periods possible
>45%
proportion of wet AMD
patients who do not experience
significant vision gains following
regular ongoing treatment with
standard of care therapies
Annual Report 2020 – 2021
3
Did you know
Standard of care therapies do
not block VEGF‑C and VEGF‑D,
which may explain why many
patients fail to respond fully or
maintain vision despite receiving
anti‑VEGF‑A therapy.
4
Opthea Limited
Pipeline to Commercialization
ShORe
Design
Efficacy Phase
Safety Phase
OPT–302 (2.0 mg) + Ranibizumab (0.5 mg)
IVT q4w x 52 wks
OPT–302 (2.0 mg) + Ranibizumab (0.5 mg)
WET AMD
Tx Naïve Pts
OPT–302 (2.0 mg) IVT q4w x 12 wks; q8w x 40 wks
Ranibizumab (0.5 mg) IVT q4w x 52 wks
y
c
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OPT–302 (2.0 mg)
+ Ranibizumab (0.5 mg)
Sham + Ranibizumab (0.5 mg)
IVT q4w x 52 wks
Sham + Ranibizumab (0.5 mg)
COAST
Design
Efficacy Phase
Safety Phase
OPT–302 (2.0 mg) IVT q4w x 52 wks
+ Aflibercept (2.0 mg) IVT q4w x 12 wks; q8w x 40wks
OPT–302 (2.0 mg) + Aflibercept (2.0 mg)
WET AMD
Tx Naïve Pts
OPT–302 (2.0 mg) + Aflibercept (2.0 mg)
IVT q4w x 12wks; q8w x 40wks
y
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OPT–302 (2.0 mg) + Aflibercept (2.0 mg)
Sham + Aflibercept (2.0 mg)
IVT q4w x 12wks; q8w x 40wks
Sham + Aflibercept (2.0 mg)
p
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Opthea is conducting two concurrent
global, multi‑center, double‑masked,
sham‑controlled Phase 3 trials
known as ShORe (Study of OPT‑302
in combination with Ranibizumab)
and COAST (Combination OPT‑302
with Aflibercept Study).
Both ShORe and COAST are being
conducted in patients with wet AMD who
have not received prior therapy (treatment
naïve patients) and will enroll ~990 patients
each. ShORe will assess the efficacy and
safety of intravitreal 2.0 mg OPT‑302 in
combination with 0.5 mg ranibizumab
(Lucentis). COAST will assess the efficacy
and safety of intravitreal 2.0 mg OPT‑302 in
combination with 2.0 mg aflibercept (Eylea).
The primary endpoint of the studies is the
mean change in Best Corrected Visual Acuity
from baseline to week 52 for OPT‑302
combination therapy compared to anti‑
VEGF‑A monotherapy. Each patient will
also continue to be treated for a further
year to evaluate extended safety and
tolerability over a two‑year period.
A number of secondary endpoints will also
be evaluated, including effects of OPT‑302
combination therapy on other key measures
of visual function, as well as anatomical
changes of wet AMD lesions assessed by
optical coherence tomography (OCT) and
fluorescein angiography (FA) imaging. In
addition, extended durability of the OPT‑302
treatment effect on clinical outcomes with
less frequent every eight‑weekly dosing will
be compared with OPT‑302 administered
on an every four‑weekly dosing regimen, in
combination with each VEGF‑A inhibitor.
Did you know
Lucentis® (ranibizumab) and Eylea®
(aflibercept) are standard of care
medicines administered by injection
into the eye to block VEGF‑A.
Annual Report 2020 – 2021
5
Chairman’s Report
“ Despite the unparalleled circumstance that
our nation, our industry, and our company face,
Opthea has advanced significantly. Our focus
as a company has been to recapitalize, advance
our clinical trials, create better visibility for our
company within the global markets, and build
our board and management. The work to
accomplish these goals continues.”
Dear Shareholders
The last year in the history of Opthea
has been a year of tremendous change
set against the backdrop of a global
pandemic. The board and management
of Opthea send our best wishes to
shareholders in the hope that they and
their loved ones have passed this last
year without major mishap. We also
express the wish that with the
technological achievements of vaccines
that the global dislocation and tragedy
around us will progressively diminish.
Despite the unparalleled circumstance that
our nation, our industry, and our company
face, Opthea has advanced significantly.
Our focus as a company has been to
recapitalize, advance our clinical trials,
create better visibility for our company
within the global markets, and build our
board and management. The work to
accomplish these goals continues.
It is notable that in the last year we have
greatly strengthened the Board of Directors
with the addition of Judith and Julia, we have
initiated Phase 3 trials, and we were listed
on NASDAQ. At this stage we are now
focused on building and strengthening
the management team and advancing
our clinical trials, while bringing to the
attention of investors around the world
the remarkable potential that we believe
our product OPT‑302 holds.
Over the last year while attention has been
focused by investors on novel technologies
and long‑acting versions of much older
medicines, there has been no fundamental
shift in the treatment paradigm for macular
degeneration; consequently the market
potential for OPT‑302 remains great.
This excites us. We are motivated to deliver
the value that we believe is inherent in our
product and our approach. We plan to
execute and to the best of our ability
deliver that attention to our programs.
On behalf of the board and management we
would like to thank our shareholders for their
support and encouragement. We look to the
future with enthusiasm and a single‑minded
dedication to the objective of delivering high
value, both to families of those with disorders
of the eye and to our shareholders.
Sincerely
Jeremy Levin
D.Phil., MB BChir
6
Opthea Limited
Did you know
Women have a higher risk of
developing wet AMD than men.
Did you know
Wet AMD impacts quality of life and
affects the ability to read, recognize
faces, drive or watch TV.
Annual Report 2020 – 2021
7
CEO’s Report
“ Our forging of a new path is therefore
driven by several factors, most notably
the need to improve outcomes for
patients with retinal eye diseases”
Dear Shareholders
At Opthea, we recognize that in seeking
to improve vision and address the unmet
medical need that remains for wet
AMD patients despite the availability
of VEGF‑A inhibitors, we are forging
a new but important path for wet
AMD therapies.
From a commercial perspective, our approach
is differentiated from other investigational
agents as OPT‑302 is complementary
when used in combination with the class
of VEGF‑A targeted therapies that account
for an expanding market opportunity of
>US$12BN per annum.
There is no doubt that VEGF‑A targeted
therapies have revolutionized the treatment
of wet AMD and whilst many patients
experience stabilization or improvement
in visual acuity, a majority of patients fail to
achieve 20/40 or better vision after 12 months
of treatment. In addition, many experience
insufficient gains in visual acuity limiting the
ability to resume routine daily activities such
as driving and reading following regular
treatment with standard of care treatments.
We also recognize that the disease biology is
complex and not driven by a single molecule
or pathway. Thus, for these reasons amongst
others, we see and believe in the potential of
the novel mechanism of OPT‑302, by blocking
VEGF‑C and VEGF‑D, to address limitations
in the efficacy of current treatments for wet
AMD and other retinal diseases.
Our forging of a new path is therefore driven
by several factors, most notably the need to
improve outcomes for patients with retinal
eye diseases; that there have been no new
therapies targeting novel mechanisms
approved for wet AMD since the approval
of the first VEGF‑A inhibitor for wet AMD
over 15 years ago; that the sound scientific
rationale for targeting VEGF‑C and VEGF‑D
is supported by our Phase 2b trial outcomes
demonstrating superior vision gains in patients
receiving combination OPT‑302 therapy;
and that there are few agents in development
targeting novel pathways that may address
shortfalls in efficacy with standard of
care treatments.
8
Opthea Limited
Operationally, I am pleased to report that
irrespective of the significant challenges
presented by the worldwide COVID‑19
pandemic to the biopharmaceutical
industry over the past 12 months, Opthea
has continued to successfully advance its
two large Phase 3 pivotal registrational
clinical trials for OPT‑302 in wet AMD.
Building on successful End‑of‑Phase 2 and
Scientific Advice regulatory meetings with
the U.S. Food and Drug Administration
(FDA) and European Medicines Agency
(EMA) respectively, we finalized the Phase 3
development pathway for OPT‑302 which
included manufacturing and the design
of clinical study protocols for two global,
multi‑center, randomized, sham‑controlled
Phase 3 clinical trials, ShORe and COAST.
Our decision to investigate OPT‑302 in
combination with two approved standard
of care VEGF‑A inhibitors, ranibizumab
(Lucentis®) in the ShORe trial and aflibercept
(Eylea®) in the COAST trial, favorably
positions OPT‑302 for future broad use
with VEGF‑A targeted therapies in general
including currently approved treatments,
as well as next generation treatments that
may be approved in the future. This approach
is inherent in the Company’s strategy to
conduct a registrational Phase 3 clinical trial
program that maximizes the commercial
potential of OPT‑302 to offer improved visual
acuity outcomes to patients with wet AMD.
From a regulatory perspective, we have also
achieved additional important and significant
regulatory milestones over the past 6 months.
Firstly, the significant unmet medical need
in the management of wet AMD and the
potential role that OPT‑302 may have in
addressing it, was acknowledged by the
FDA in July 2021 with Fast Track designation
granted for OPT‑302 in combination with
anti‑VEGF‑A therapy. This designation helps
to speed clinical development, regulatory
review, and market entry upon approval
of treatments with a potential to address
serious conditions, with the aim of getting
important new therapies to patients
more quickly. The benefits of Fast Track
designation include more frequent meetings
and communications with the FDA as well
as a Rolling Review of completed sections
of its Biologic Drug Application (BLA) which
will expedite the Phase 3 development
program and subsequent approval review
process. Furthermore, an initial Pediatric
Study Plan (iPSP) waiver was also received
from the FDA in March 2021, which means
that Opthea will not have to conduct an
additional study of OPT‑302 in a pediatric
population for use in the U.S.
The achievement of these milestones and
the regulatory guidance from the FDA and
EMA has provided Opthea with clear direction,
and we believe there is a well‑defined
regulatory pathway in place to advance
OPT‑302 through Phase 3 registrational trials
in the treatment of wet AMD in support of
future filings for global marketing approval
and commercial launch including the U.S.
and Europe.
During the year, concurrent with the
Company’s interactions with the FDA and
EMA, Opthea undertook an extensive
process to prepare for the initiation of the
Phase 3 ShORe and COAST trials, including
identification of global clinical trial sites and
investigators to participate and recruit
patients. In addition, we successfully
manufactured several large‑scale batches
of OPT‑302 at cGMP quality for use in the
ShORe and COAST trials and in support
of future commercial efforts.
Our Phase 3 program is truly a global one.
Over an approximate 18‑month period,
both trials will each enroll approximately
990 patients from more than 20 countries
worldwide. A key focus of our current activities
is to continue our interactions with regulatory
authorities worldwide to facilitate completion
of all site activations on a country‑by‑country
basis. As a culmination of these efforts, in
March 2021, we achieved a key milestone
for the company with the announcement
that the first patients had been treated in
our Phase 3 pivotal program. Since then
we have continued to recruit patients in
the U.S. and prepare for enrollment in other
countries around the world. In August 2021,
recruitment opened to patients in Canada
and we are on‑track to have sites actively
recruiting patients in Europe and Asia Pacific
With this strong foundation and recognizing
the scope of Phase 3 and commercialization
activities, Opthea has worked to further
establish the Company as a globally
recognized, emerging player in ophthalmology.
To that end, Opthea completed a U.S. initial
public offering (IPO) and NASDAQ listing
in October 2020, raising US$128.2 million
(AU$164.9 million) equity capital. The proceeds
will primarily be used to progress OPT‑302
in pivotal Phase 3 registration trials.
Aligned with our U.S. growth strategy, we
were delighted to welcome Dr Jeremy Levin
as Chairman of the Board in October 2020.
Dr Levin, currently Chairman and CEO
of Ovid Therapeutics (NASDAQ: OVID),
is an experienced biotechnology and
pharmaceutical company director and
executive having lead Teva Pharmaceutical
Industries (TLV: TEVA) as President and
CEO and has held various senior executive
roles at Bristol‑Myers Squibb (NYSE: BMY)
executives to build out our U.S. team will
position the Company for success and
increased shareholder value.
Looking ahead, a key focus for Opthea
over the next 12 months is to continue the
execution of the Phase 3 pivotal program for
OPT‑302 in wet AMD. To date, and thankfully,
despite a challenging external environment,
Opthea’s dedicated team have progressed
the development of OPT‑302 with minimal
impact from the COVID‑19 pandemic. As our
Phase 3 programs advances, we will continue
to proactively assess the pandemic’s impact
on a country‑by‑country basis and manage
our operations accordingly.
Finally, I wish to sincerely and personally
thank Mr Geoffrey Kempler, who, as part
of a planned succession plan, retired as
Chairman of Opthea in October 2020.
Mr Kempler was appointed Chairman in
2015 and his tenure included the company’s
“ As we move closer to our objective of reporting Phase 3
topline data in 2H CY 2023, we will continue to closely
monitor patient enrollment and compliance to ensure
successful execution of the pivotal registrational program.”
over the following months. As we move
closer to our objective of reporting Phase 3
topline data in 2H CY 2023, we will continue
to closely monitor patient enrollment and
compliance to ensure successful execution
of the pivotal registrational program.
I am enormously proud of the achievements
over the past several years of Opthea’s
dedicated and experienced Australian based
team. Most notably they drove the execution
of the Company’s Phase 2b clinical trial in wet
AMD which successfully reported superior
vision outcomes in treatment naïve patients
who received OPT‑302 combination therapy.
This significant, proof‑of‑concept data
demonstrated the potential of VEGF‑C/D
inhibition with OPT‑302 to improve vision
outcomes in patients over and above standard
of care anti‑VEGF‑A monotherapy and set us
on to late‑stage Phase 3 clinical development
and preparation for commercialization.
and Novartis (SWX: NOVN). Dr Levin brings
a wealth of strategic and industry experience
to the Board that is critical for positioning
Opthea for growth and commercialization
in the near‑term.
The Board further expanded its strengths
in clinical and commercialization strategy
with the appointments of Dr. Julia Haller
and Ms. Judith Robertson as independent
non‑executive directors. Dr Haller is an
internationally recognized ophthalmologist
and vitreoretinal surgeon, currently serving
as Ophthalmologist‑in‑Chief at Wills Eye
Hospital in Philadelphia. Ms Robertson is
an accomplished life sciences commercial
executive with an extensive track record
for building commercial organizations and
launching multiple ophthalmic products.
We have no doubt that the expanded board of
internationally recognized leaders, together
with the imminent recruitment of senior
transition to late‑stage clinical development
and recognition of the inherent potential
of OPT‑302 to improve vision outcomes
in patients with retinal eye disease.
Further, I thank all of our employees,
shareholders, investigators and patients
for their ongoing support throughout the
2021 financial year. I look forward to updating
shareholders as we progress towards our
goals and work to achieve our strategic
and operational objectives.
Megan Baldwin, PhD
CEO & Managing Director
Opthea Limited
Annual Report 2020 – 2021
9
Directors’ Report
The board of directors of
Opthea Limited submits its
report for the year ended
June 30, 2021 for Opthea
and its subsidiaries
I N F O R M A T I O N A B O U T
T H E D I R E C T O R S
The names of Opthea Limited’s (the Company or Opthea)
directors in office during the financial year and until the
date of this report are as follows:
Jeremy Levin, Non‑Executive Director and Chairman
(appointed October 5, 2020)
Megan Baldwin, Managing Director and Chief Executive Officer
Geoffrey Kempler, Non‑Executive Director and Chairman
(resigned October 12, 2020)
Michael Sistenich, Non‑Executive Director
Lawrence Gozlan, Non‑Executive Director (appointed July 24, 2020)
Daniel Spiegelman, Non‑Executive Director
(appointed September 10, 2020)
Julia Haller, Non‑Executive Director (appointed June 1, 2021)
Judith Robertson, Non‑Executive Director (appointed June 1, 2021)
The qualifications, experience and special responsibilities
of the Company’s Directors are as follows.
C O M P A N Y S E C R E T A R Y
K A R E N A D A M S
BBus, CPA GAICD,FGIA FCG
Karen Adams, a fellow of the Governance Institute of
Company Secretaries, was appointed as Vice President
Finance and Company Secretary on June 15, 2021.
10
Opthea Limited
J E R E M Y L E V I N
D.Phil., MB BChir
Non‑Executive Director and Chairman
Dr. Jeremy Levin has served as the Chairperson of
the board of directors since October 2020. Since 2015
Jeremy has served as the Chief Executive Officer
of Ovid Therapeutics Inc., and since 2014, as the
chairperson of the board of directors, of Ovid.
From May 2012 to October 2013, Dr. Levin served
as the President and Chief Executive Officer of
Teva Pharmaceutical Industries Ltd., a publicly held
pharmaceutical company. From September 2007
to December 2012, Dr. Levin held several roles at
Bristol‑Myers Squibb Company, a publicly held
pharmaceutical company, ultimately serving as the
Senior Vice President of Strategy, Alliances and
Transactions. Dr. Levin also served as a member
of the executive committee at Bristol‑Myers Squibb
Company. Dr. Levin earned a B.A. in Zoology, a MA
in Cell Biology and a D.Phil. in Chromatin Structure,
all from University of Oxford, and a MB BChir
from the University of Cambridge.
M E G A N B A L D W I N
PhD, MAICD
Managing Director and
Chief Executive Officer
Dr Megan Baldwin was appointed CEO and Managing
Director in February 2014. Dr Baldwin brings over
20 years of experience focusing on angiogenesis
and therapeutic strategies for cancer and ophthalmic
indications. Dr Baldwin joined Opthea in 2008 and
since then has held various positions, including Head
of Preclinical R&D and Chief Executive Officer of
Opthea Pty Ltd, formerly a 100% owned subsidiary
of Opthea, developing OPT‑302 for the treatment of
wet age‑related macular degeneration. Prior to joining
Opthea, she was employed at Genentech (now Roche),
the world leader in the field of angiogenesis‑based
therapies for cancer and other diseases.
Her experience included several years as a researcher
in the group of leading angiogenesis expert Napoleone
Ferrara, before moving to Genentech’s commercial
division and having responsibility for corporate
competitive intelligence activities. In these roles,
she developed extensive commercial and scientific
knowledge in the field of anti‑angiogenic and oncology
drug development. She holds a PhD in Medicine from
the University of Melbourne, having conducted her
doctoral studies at the Ludwig Institute for Cancer
Research on the biology of VEGF‑C and VEGF‑D,
is a member of the Australian Institute of Company
Directors and a director of Ausbiotech.
M I C H A E L S I S T E N I C H
M.SC
Non‑Executive Director
D A N I E L S P I E G E L M A N
B.A., MBA
Non‑Executive Director
J U D I T H R O B E R T S O N
B.A., MBA
Non‑Executive Director
Judith Robertson was appointed
non‑executive director of Opthea in
June 2021. Ms. Robertson was most
recently Chief Commercial Officer of
Eleusis Ltd. and serves on the board
of Durect Corporation, a Nasdaq listed
company developing therapies for acute
organ injury and chronic liver diseases.
She was previously Chief Commercial
Officer of Aerie Pharmaceuticals where
she oversaw the launch of Rhopressa®,
the first product in 20 years to target
a new mechanism of action for the
treatment of glaucoma, and the launch
of the combination product Rocklatan®,
the first fixed‑dose combination of a
prostaglandin and ROCK inhibitor for the
reduction of intraocular pressure (IOP)
in patients with open‑angle glaucoma
or ocular hypertension. Prior to Aerie,
Ms. Robertson was Vice President
Immunology and Ophthalmology Global
Commercial Strategy Leader at Johnson
and Johnson, Janssen Pharmaceuticals,
and Vice President, Ophthalmology Global
Business Franchise Head at Novartis
(formerly Alcon). Ms. Robertson’s prior
experience also includes sales and
marketing roles at Novartis, Bristol Myers
Squibb and Searle USA. Ms. Robertson
earned a B.A. with honors from Ryerson
University, Canada. She also holds an
MBA from Northwestern University,
Kellogg School of Management.
Michael Sistenich was appointed
non‑executive director of Opthea in
November 2015 and is Chairman of the
remuneration and audit committees. Michael
Sistenich has advised a wide range of global
institutions, high net worth individuals and
companies on healthcare investments
over the past 20 years. He is a healthcare
specialist in international investment
management and investment banking, and
led the Bell Potter team which advised the
Company through the $17.4 million capital
raising in November 2014. Michael Sistenich
is currently chairman of the board of Enlitic
Inc, and previously served as director
of International Equities and Head of
Global Healthcare Investments at DWS
Investments, Deutsche Bank Frankfurt.
Michael has long standing capital market
connections and experience in the global
healthcare investment community.
L A W R E N C E G O Z L A N
B.Sc. (Hons)
Non‑Executive Director
Lawrence Gozlan was appointed as a
director on July 24, 2020. Mr Gozlan,
a leading biotechnology investor and
advisor, is the Life Sciences Investment
Manager at Jagen Pty Ltd, an international
private investment organization. Mr Gozlan
is also the Chief Investment Officer and
Founder of Scientia Capital, a specialized
global investment fund focused exclusively
on life sciences. Scientia was founded to
provide high level expertise and to manage
investments for high net worth individuals,
family offices and institutional investors
wanting exposure to the life sciences
industry. Prior to this, Mr Gozlan was
responsible for the largest biotechnology
investment portfolio in Australia as the
institutional biotechnology analyst at QIC
(“the Queensland Investment Corporation”),
an investment fund with over $60 billion
under management. He previously worked
as the senior biotechnology analyst in the
equities team at Foster Stockbroking, and
gained senior corporate finance experience
advising life science companies at Deloitte.
Mr Gozlan holds a Bachelor of Science
with Honors in microbiology and immunology
from the University of Melbourne.
Daniel Spiegelman has served as a
member of the board of directors since
September 2020. From May 2012 to
January 2020, Mr. Spiegelman served as
Executive Vice President, Chief Financial
Officer and a member of the board of
directors of BioMarin Pharmaceutical Inc.,
a biotechnology company. From May 2009
to May 2012, Mr. Spiegelman served as a
consultant to provide strategic financial
management support to a portfolio of
public and private life science companies.
Mr. Spiegelman has also served as a member
of the board of directors of Myriad Genetics,
a molecular diagnostic company since May
2020, a director of Jiya Acquisitions Corp
since November 2020 and a director of
Spruce Bioscience since September 2020.
Mr. Spiegelman earned a B.A. from Stanford
University and an MBA from the Stanford
Graduate School of Business.
D R . J U L I A H A L L E R
M.D.
Non‑Executive Director
Dr. Julia Haller was appointed
non‑executive director of Opthea in
June 2021. Since 2007, Dr. Haller has served
as Ophthalmologist‑in‑Chief and Endowed
Chair at Wills Eye Hospital in Philadelphia.
She is Professor and Chair of the Department
of Ophthalmology at the Sidney Kimmel
Medical College at Thomas Jefferson
University as well as a director of Bristol
Myers Squibb. She is a member of the
National Academy of Medicine and serves
on several prestigious boards including the
board of the John Hopkins Medical and
Surgical Association, the Association of
University Professors of Ophthalmology,
the College of Physicians of Philadelphia,
and the Society of Heed Fellows. She is
President of the Women in Medicine Legacy
Foundation and a member of the National
Academy of Medicine. Previously Dr. Haller
was a director of Celgene Corporation and
Professor of Ophthalmology, Johns Hopkins
University School of Medicine, The Wilmer
Eye Institute, where she directed the Retina
Fellowship Training Program from 2001‑2007.
Dr. Haller received a B.A. from Princeton
University, graduating magna cum laude,
and completed her medical training at
Harvard Medical School.
Annual Report 2020 – 2021
11
Directors’ Report (Cont.)
D I R E C T O R S H I P S O F
O T H E R L I S T E D C O M P A N I E S
Directorships of other listed companies held by directors in
the three years immediately before the end of the financial
year are as follows:
Director
Jeremy Levin
Megan Baldwin
Lawrence Gozlan
Company
Ovid Therapeutics Inc
(NASDAQ)
Lundbeck (ASX)
Invex Therapeutics (ASX)
Alterity Therapeutics Limited
(ASX)
Period of
directorship
Since 1997
Since 2017
Since 2020
Since 2011
Daniel Spiegelman Myriad Genetics (NASDAQ) Since 2020
Since 2020
Jiya Acquisition Corp
(NASDAQ)
Spruce BioScience
(NASDAQ)
Since 2019
Durect (NASDAQ)
Eyenovia (NASDAQ)
Since 2021
Bristol Myers Squibb (NYSE) Since 2019
Judith Robertson
Julia Haller
Since 2020
D I R E C T O R S ’ I N T E R E S T S
At the date of this report, the relevant interests of each director
of the Company in the contributed equity of the Company are
as follows:
Options
granted
under
LTIP and
NED Plans
Fully paid
ordinary
shares
3,839,398
3,000,000
–
3,000,000
900,960
1,500,000
520,178
1,500,000
1,877,357
2,000,000
–
2,000,000
Megan Baldwin
Jeremy Levin
Geoffrey Kempler
Michael Sistenich
Lawrence Gozlan
Daniel Spiegelman
S H A R E O P T I O N S
As at June 30, 2021 and the date of this report, details of Opthea’s interests under option are as follows:
Long Term Incentive and Non‑Executive Director Share and Option Plans
During the 2016, 2018, 2019 and 2021 financial years the Company granted 25,969,000 options to purchase ordinary shares to directors
and employees under the Long Term Incentive (LTIP) and Non‑Executive Director Share and Option (NED) Plans.
Grant date
March 7, 2016
March 31, 2016
August 23, 2017
Expiry date
March 7, 2021
January 1, 2022
January 1, 2023
Granted to
Directors under the LTIP and NED plan
Employees under the LTIP
Employees under the LTIP
November 29, 2018
November 29, 2022
Directors under the LTIP and NED plan
April 3, 2019
October 12, 2020
October 12, 2020
January 19, 2021
April 3, 2023
October 11, 2024
October 11, 2024
January 18, 2025
Employees under the LTIP
Directors under the NED Plan
Directors under the NED Plan
Directors under the NED Plan
Exercise
price
$036
$0.37
$0.92
$0.625
$0.608
$2.16
$3.24
$1.56
Number
of options
granted
7,000,000
2,625,000
500,000
6,000,000
2,844,000
2,000,000
2,000,000
3,000,000
25,969,000
The Remuneration Report section of this report contains details on the terms and conditions of the options granted under the
Company’s LTIP and NED Plans.
D I V I D E N D S
No cash dividends have been paid, declared or recommended during or since the end of the financial year by the Company.
12
Opthea Limited
P R I N C I P A L A C T I V I T I E S
The principal activity of Opthea Limited is to develop
and commercialize therapies primarily for eye disease.
Opthea’s lead asset, OPT‑302, is a soluble form of VEGFR‑3
in clinical development as a novel therapy for wet (neovascular)
age‑related macular degeneration and diabetic macular edema
(DME). Wet AMD and DME are leading causes of blindness
in the elderly and diabetic populations respectively and are
increasing in prevalence worldwide.
Opthea’s principal activities in 2020‑21 included planning and
initiation of its Phase 3 program in wet AMD, including the
conduct of meetings with the U.S. Food and Drug Administration
(FDA) and European Medicines Agency (EMA), finalization of
the design and clinical protocols for two Phase 3 pivotal trials,
manufacturing of OPT‑302 for use in the Phase 3 clinical trials
and the initiation of patient recruitment at multiple sites in the
U.S. In addition, Opthea conducted activities to support Phase 3
clinical site activations in Europe, Asia‑Pacific and Latin America.
Opthea’s development activities are based on an extensive
intellectual property portfolio covering key targets (Vascular
Endothelial Growth Factors VEGF‑C, VEGF‑D and VEGF
Receptor‑3) for the treatment of diseases associated with
blood and lymphatic vessel growth (angiogenesis and
lymphangiogenesis respectively), as well as vascular leakage.
Angiogenesis and vascular leakage are key hallmarks of several
eye diseases, including wet AMD and DME.
O P E R A T I N G A N D
F I N A N C I A L R E V I E W
Financial performance
The consolidated results of Opthea and its subsidiaries (the Group)
for the year reflect the Group’s investment in advancing its OPT‑302
ophthalmology program.
A summary of the results is as follows:
/ The major expenditure of the Group has been in relation
to R&D, in particular costs associated with the Phase 2b
and Phase1b/2a clinical trials of OPT‑302 for wet AMD
and DME and the initiation of the Phase 3 clinical trials;
/ Total R&D expenditure amounted to US$25,891,851
(2020: US$12,064,007) . Including personnel costs and
other R&D support costs which are included in administrative
costs, total expenditure in R&D tax claim amounted to
US$11,403,170 (2020: US$13,108,968);
/ Opthea received an R&D tax incentive payment during
the year of US$5,834,100, (2020: US$10,118,697); and
/ The consolidated net loss of the Group for the year was
US$45,344,496 after an income tax benefit of US$4,938,846
(2020: loss of US$11,123,199 after an income tax benefit
of US$5,708,766).
Financial Position
The Group’s statement of financial position includes the
following key balances:
/ Consolidated cash balances as at June 30, 2021 amounted
to US$118,193,177 (2020: US$42,650,858);
/ Receivables of US$5,538,184 (2020: US$6,063,725) include
the Opthea Group’s expected refund of R&D tax incentives for
the year to June 2021 of US$4,972,898 (2020: US$5,868,152);
/ The Group has a net current asset surplus of US$135,011,031
(2020: US$44,285,716); and
/ The net tangible asset backing per share as at June 30, 2021
was US$0.39 (2020: US$0.17); Opthea’s share price was
A$1.34 (2020: A$2.36).
Opthea: Company Overview
Opthea is committed to the development of new therapies for the
treatment of serious eye diseases that affect the back‑of‑the‑eye,
or retina, and lead to vision loss.
Opthea’s lead candidate OPT‑302 is a first‑in‑class VEGF‑C/D
inhibitor being developed as a complementary treatment to be used
in conjunction with VEGF‑A inhibitors for the treatment of wet
(neovascular) AMD and other retinal diseases.
Wet AMD is a progressive, chronic disease of the central retina and in
developed nations, is the leading cause of visual impairment in people
over the age of 50 years. Wet AMD is associated with blood vessel
dysfunction and proliferation in the macula, a region of the retina
which is needed for sharp, central vision. New blood vessels break
through layers of the retinal tissue, leaking fluid, lipids and blood,
leading to fibrous scarring and loss of vision. Vision loss associated
with wet AMD can be rapid and is generally severe, impacting patient
independence and contributing to significant healthcare and
economic costs worldwide.
Although the underlying cause and biology of wet AMD is complex,
inhibition of vascular endothelial growth factor‑A, or VEGF‑A, has
been shown to play an important role in the growth and leakage of
vessels associated with the disease, and inhibitors of VEGF‑A are now
standard of care treatments for wet AMD. The VEGF‑A inhibitors
ranibizumab (Lucentis®) and aflibercept (Eylea®), approved for the
treatment of wet AMD, together generated worldwide revenues in
excess of US$11.9 billion in 2019. Such commercial success reflects
the widespread use of the VEGF‑A inhibitor class of therapies and
the importance that physicians and patients alike attribute to the
preservation and improvement of visual acuity for quality of life.
Annual Report 2020 – 2021
13
Directors’ Report (Cont.)
However, despite many patients experiencing gains or stabilization
of vision, at least 45% of patients with wet AMD exhibit a
sub‑optimal response to therapies that selectively target VEGF‑A.
As such, there remains a very large commercial opportunity for
novel therapies that address the unmet medical need for patients
who have further room for improvement in visual acuity despite
regular administration of currently available treatments.
Opthea’s lead product candidate OPT‑302 is well‑differentiated
with a key objective to improve clinical efficacy and the potential
to also produce more sustained, durable clinical outcomes for
patients. The majority of agents currently in clinical development
are seeking to reduce the frequency of patient treatments,
rather than provide superior vision gains for those affected
by retinal diseases.
With a scarcity of combination therapies in development that
may offer improved outcomes for retinal disease patients, and
with positive Phase 2b data in wet AMD, we believe OPT‑302
is a promising drug candidate with large commercial potential
as it advances through the final stage of clinical development,
Phase 3 pivotal studies.
OPT‑302: Opthea’s Phase 3 Asset for the Treatment
of Wet AMD
Wet AMD is associated with vascular dysfunction and fluid
accumulation at the back of the eye in a region of the central
retina or ‘macula’ that is needed for sharp, central vision. Vessel
growth and vascular leakage are primarily driven by members
of the vascular endothelial growth factor (VEGF) family, which
comprises 5 members including VEGF‑A, VEGF‑B, VEGF‑C,
VEGF‑D and placenta growth factor (PlGF). Elevated levels of
these factors are associated with retinal disease progression.
Current treatments, as well as many agents currently in clinical
development for wet AMD and DME, share a common mechanism
of action by inhibiting VEGF‑A. OPT‑302 has a differentiated
mechanism of action by binding and blocking the activity of
VEGF‑C and VEGF‑D, which are also important stimulators of
blood vessel growth and vascular leakage and implicated in the
progression of retinal diseases. OPT‑302 is a soluble fusion protein
consisting of the first three extracellular domains of VEGFR‑3
fused to the Fc fragment of human immunoglobulin G1 (IgG1).
OPT‑302 binds or ‘traps’ VEGF‑C and VEGF‑D with high affinity,
blocking the activity of both molecules.
OPT‑302 is administered by intra‑vitreal injection into the eye,
which is the same route of administration of approved, standard
of care treatments for wet AMD. By combining administration of
OPT‑302 with a VEGF‑A inhibitor, broader blockade of important
signaling pathways that contribute to the pathophysiology of
retinal diseases can be achieved, which may improve visual acuity
and retinal swelling in patients. In addition, inhibition of VEGF‑A
14
Opthea Limited
results in compensatory upregulation of VEGF‑C and VEGF‑D
that may limit the efficacy of selective VEGF‑A inhibitors.
OPT‑302 blocks this mechanism of resistance to existing
therapies which may then result in improved and more durable
clinical responses.
Operational update
Over the past 12 months, Opthea continued to advance its clinical
development program investigating OPT‑302 as a combination
therapy for wet (neovascular) AMD. The majority of the Company’s
activities were focused on planning and initiation of its Phase 3
pivotal program in wet AMD, including engagement with regulatory
agencies globally and manufacture of OPT‑302 to cGMP
standards for use in the clinical trials.
OPT‑302 was advanced into Phase 3 pivotal trials based on
clinical experience to date, which includes three completed
studies: two with OPT‑302 in combination with ranibizumab
(Lucentis®), a VEGF‑A inhibitor, in patients with wet AMD;
and one with OPT‑302 in combination with aflibercept (Eylea),
a VEGF‑A inhibitor, in patients with persistent, center‑involved
diabetic macular edema (DME). Notably, the statistically significant
positive outcomes from the Company’s 366‑patient, randomized,
sham‑controlled Phase 2b clinical trial in treatment naïve wet
AMD patients informed the design of the Phase 3 program.
Regulatory Engagement
In August 2020, Opthea successfully completed End‑of‑Phase 2
meetings with the U.S. Food and Drug Administration (FDA), and
a Scientific Advice meeting with the European Medicines Agency
(EMA). The regulatory engagement provided Opthea with guidance
on our Phase 3 clinical program for OPT‑302 in wet AMD and
associated manufacturing processes that we believe will support
the submission of a Biologics License Application in the U.S.
and Marketing Authorization Application in Europe.
Further regulatory milestones were achieved during the year,
firstly with our successful application to the FDA for an initial
Pediatric Study Plan (iPSP) waiver, which was received in
March 2021. The receipt of the waiver means that Opthea
will not have to conduct an additional study of OPT‑302 in the
pediatric population for the use of OPT‑302 in this U.S. population.
Furthermore, in July 2021, the FDA granted Fast Track designation
for OPT‑302 in combination with anti‑VEGF‑A therapy for the
treatment of patients with wet AMD. We believe the FDAs Fast
Track designation acknowledges the significant unmet medical
need in the management of wet AMD, and the potential role
that OPT‑302 may have in addressing it. The FDA’s Fast Track
Designation for OPT‑302 offers benefits to expedite the Phase 3
clinical program and subsequent potential approval process,
including more frequent communication and meetings with the
FDA, and a Rolling Review of completed sections of its BLA.
Following the agreement by the FDA and EMA on key aspects
of the proposed Phase 3 clinical trial designs, the design of two
concurrent, global, multi‑center, randomized, sham‑controlled
trials evaluating OPT‑302 in combination with either ranibizumab
(the ShORe trial) or aflibercept (the COAST trial), were finalized.
Opthea’s Phase 3 Pivotal Trials – ShORe and COAST
Opthea’s Phase 3 program consists of two concurrent, global,
multi‑center, randomized, sham‑controlled studies:
/ ShORe: Study of OPT‑302 in combination with Ranibizumab
(Study OPT‑302‑1004).
/ COAST: Combination OPT‑302 with Aflibercept Study
(Study OPT‑302‑1005).
ShORe and COAST will enroll treatment‑naïve patients.
In ShORe, treatment‑naïve patients with wet AMD will be
randomized to one of three treatment arms to receive standard
of care 0.5 mg ranibizumab every four weeks in combination with
either 2.0 mg OPT‑302 on a standard every four weeks dosing
regimen or 2.0 mg OPT‑302 on an extended every eight weeks
dosing regimen after three monthly initiating doses, or with sham
injections every four weeks.
In COAST, treatment‑naïve patients with wet AMD will be
randomized to one of three treatment arms to receive standard
of care 2.0 mg aflibercept on its every eight‑week dosing regimen,
after three monthly initiating doses, in combination with either
2.0 mg OPT‑302 on a standard every four weeks dosing regimen
or 2.0 mg OPT‑302 on an extended every eight weeks dosing
regimen after three monthly initiating doses, or with sham
injections every four weeks.
Each trial is expected to enroll approximately 990 patients
worldwide. The primary endpoint for both trials is mean change
in visual acuity from baseline to week 52 for OPT‑302 and
anti‑VEGF‑A combination therapy compared to anti‑VEGF‑A
monotherapy, with the Company intending to submit Biologics
License and Marketing Authorization Applications with the FDA
and EMA respectively following completion of this primary efficacy
phase of the trials. Each patient will continue to be treated
for a further year to evaluate safety and tolerability over a
two‑year period.
These two OPT‑302 Phase 3 trials build upon and maintain key
features for consistency with the Company’s positive Phase 2b
clinical trial of OPT‑302, while evaluating the administration of
OPT‑302 combination therapy over a longer treatment period
and in a greater number of patients.
In addition, the Phase 3 trials are optimized based on Phase 2b
outcomes to maximize probability of success and commercial
opportunity. Analysis of the Phase 2b trial demonstrated that
OPT‑302 combination therapy increased visual acuity by a further
+5.7 letters over ranibizumab monotherapy in wet AMD patients
with minimally classic and occult lesions, representing the majority
(~80%) of wet AMD patients. Based on these positive data,
primary analysis of the primary endpoint of the Phase 3 trials will
be first conducted in patients with minimally classic and occult
lesions administered OPT‑302 every 4 weeks and every 8 weeks,
followed by analysis in the predominantly classic lesions and total
patient population.
In March 2021, the first patients were treated in our Phase 3
pivotal program, and since that time, we have continued to
activate additional clinical trial sites and recruit patients in the
U.S. In August 2021, the first sites opened enrollment in Canada
and we are on‑track to initiate patient recruitment in Europe and
Asia Pacific over the following months. In total, we expect to enroll
approximately 990 patients into each trial, with patients recruited
from more than 20 countries worldwide, and to report top‑line
data in the second half of calendar year 2023.
Corporate Update
Aligned with Opthea’s strategy to build the profile of the company
globally, and to more effectively access the U.S. capital markets,
the Company completed a U.S. initial public offering (IPO) and
NASDAQ listing in October 2020. The IPO raised US$128.2 million
(A$164.9 million) with participation from Australian, US and
UK investors. Opthea is now dual‑listed on the ASX on NASDAQ
where its American Depositary Shares (ADS) are listed at a ratio
of 8 ordinary shares to one ADS.
Opthea is also working to broaden Opthea’s geographical reach
by expanding its operations and building a US‑based team of senior
executives. In addition, over the past 12 months, the Company
expanded its Board of Directors, which included welcoming
Dr Jeremy Levin as Chairman. Dr Levin is an experienced
biotechnology and pharmaceutical company director and executive.
He is currently Chairman and Chief Executive Officer of Ovid
Therapeutics and serves on the board of Lundbeck (OMX: LUN).
Prior to founding Ovid, Dr Levin was President and CEO of Teva
Pharmaceutical Industries Ltd (TLV: TEVA) and before Teva, held
senior executive positions at Bristol‑Myers Squibb (NYSE: BMY)
and Novartis (SWX: NOVN).
In addition, in June 2021, Dr Julia Haller and Ms Judith Robertson
joined the Board as independent Non‑Executive Directors,
expanding the Board’s strength in clinical and commercialization
strategy. Dr. Haller is an internationally recognized ophthalmologist
and vitreoretinal surgeon, currently serving as Ophthalmologist‑in‑
Chief and William Tasman, MD Endowed Chair at Wills Eye Hospital
in Philadelphia. Ms. Robertson is an accomplished life sciences
Annual Report 2020 – 2021
15
Directors’ Report (Cont.)
commercial executive with an extensive track record for building,
leading and launching several commercial organizations and
products including successfully launching multiple ophthalmic
products for pharmaceutical and biotechnology companies.
Intellectual property
Opthea owns a patent family covering the OPT‑302 molecule,
and uses thereof, extending out to February 2034. This patent
has been filed in 19 jurisdictions and has already granted in the
United States, Europe (validated in 38 countries), Japan, Australia,
New Zealand, Malaysia, Singapore, Mexico, South Africa, Colombia
and Russia. The patent application has been accepted for grant in
Canada and Israel, and is currently pending in China, Brazil, India,
South Korea, Indonesia and the Philippines.
The United States patent, which granted in August 2017, includes
broad claims to the OPT 302 molecule, and analogues thereof and
their use to treat disorders involving neovascularization , including
eye diseases such as wet AMD and DME.
In the United States, Opthea has another granted patent relating
to soluble VEGFR 3 molecules which includes composition of
matter claims to soluble VEGFR 3 molecules (such as OPT 302)
and extends out to November 2026.
S I G N I F I C A N T C H A N G E S
I N T H E S T A T E O F A F F A I R S
restrictions and social distancing in Australia, the United States
and other countries, business closures or business disruptions,
the ultimate impact on financial markets and the global economy
and the effectiveness of actions taken in Australia, the United
States and other countries to contain and treat the disease.
F U T U R E D E V E L O P M E N T S
Opthea continues to advance the clinical development of
OPT‑302 to key clinical and commercial milestones by progressing
manufacturing, regulatory engagement, and Phase 3 pivotal trials
in wet AMD.
The key objectives of the Company over the next 12 months are to:
Wet AMD:
/ Continue GMP manufacturing activities of OPT‑302 for Phase 3
clinical trials and in support of future commercial efforts;
/ Progress development of a co‑formulation of OPT‑302 with
a biosimilar VEGF‑A inhibitor; and
/ Publish outcomes of the Phase 2b wet AMD trial in a peer
reviewed journal.
Corporate:
/ Broaden Opthea’s geographical reach by establishing
U.S. based operations;
In the opinion of the directors, there were no significant changes
in the state of affairs of the Company that occurred during the
financial year under review.
/ Ensure the global investment and pharmaceutical/
biotechnology community is aware of the commercial
potential inherent in OPT‑302;
I M P A C T O F C O V I D ‑ 1 9
We are closely monitoring how the COVID‑19 situation is affecting
our employees, business, preclinical studies and clinical trials.
In response to the COVID‑19 pandemic, the Company followed the
recommendations of the applicable State Government and when
required, all of our employees transitioned to working remotely
and travel was restricted. Although operations to date have not
been materially negatively affected by the COVID‑19 pandemic,
at this time there is significant uncertainty relating to the trajectory
of the pandemic. The impact of related responses and disruptions
caused by the COVID‑19 pandemic may result in difficulties or
delays in initiating, enrolling, conducting or completing future
clinical trials and the Company incurring unforeseen costs as a
result of the disruptions in clinical supply or clinical trial delays.
The impact of COVID‑19 on our future results will largely depend
on future developments, which are highly uncertain and cannot
be predicted with confidence, such as the ultimate geographic
spread of the disease, the duration of the pandemic, travel
16
Opthea Limited
/ Continue to pursue expanded clinical and business
development opportunities, including the potential
investigation of OP‑302 in other retinal indications; and
/ Prepare for various and all opportunities to advance further
development of OPT‑302 through investment out‑reach
and engagement with pharmaceutical/biotechnology
companies in the sector.
S I G N I F I C A N T E V E N T S
A F T E R B A L A N C E D A T E
There are no other significant events after June 30, 2021 to report.
E N V I R O N M E N T A L R E G U L A T I O N S
The Company is not subject to significant environmental
regulations.
I N D E M N I F I C A T I O N A N D I N S U R A N C E
During the financial year ended June 30, 2021, the Company
indemnified its directors, the company secretary and executive
officers in respect of any acts or omissions giving rise to a liability
to another person (other than the Company or a related party)
unless the liability arose out of conduct involving a lack of good
faith. In addition, the Company indemnified the directors, the
company secretary and executive officers against any liability
incurred by them in their capacity as directors, company secretary
or executive officers in successfully defending civil or criminal
proceedings in relation to the Company. No monetary restriction
was placed on this indemnity.
D I R E C T O R S ’ M E E T I N G S
The Company has insured its directors, the company secretary
and executive officers for the financial year ended June 30, 2021.
Under the Company’s Directors’ and Officers’ Liabilities Insurance
Policy, the Company shall not release to any third party or otherwise
publish details of the nature of the liabilities insured by the policy
or the amount of the premium. Accordingly, the Company relies on
section 300(9) of the Corporations Act 2001 to exempt it from the
requirement to disclose the nature of the liability insured against and
the premium amount of the relevant policy.
The number of meetings of directors and meetings of committees of the board held during the year are set out below. Attendance by
the directors at these meetings as relevant to each of them is as shown. It is the Company’s practice to invite all directors to committee
meetings irrespective of whether they are members.
Number of meetings held:
Number of meetings attended:
Geoffrey Kempler (resigned October 12, 2020)
Jeremy Levin (appointed October 5, 2020)
Michael Sistenich
Lawrence Gozlan (appointed July 24, 2020)
Daniel Spiegelman (appointed September 10, 2020)
Julia Haller (appointed June 1, 2021)
Judith Robertson (appointed June 1, 2021)
Megan Baldwin
Directors’
meetings
Meetings of committees
Audit & Risk
Nomination
Remuneration
6
1
5
6
6
5
1
1
6
5
1
4
5
5
5
1
1
5
2
–
2
2
2
2
1
1
2
5
1
5
5
5
5
1
1
5
Committee membership
During the year, the Company had Audit and Risk, Remuneration and Nomination committees.
Members acting on the committees of the board during the year were:
Audit & Risk
Nomination
Remuneration
Daniel Spiegelman (Chairman)
Lawrence Gozlan(Chairman)
Michael Sistenich (Chairman)
Michael Sistenich
Michael Sistenich
Daniel Spiegelman (ceased June 24, 2021)
Lawrence Gozlan (ceased June 24, 2021)
Daniel Spiegelman
Judith Robertson (June 24, 2021)
–
Lawrence Gozlan
Julia Haller (June 24, 2021)
Annual Report 2020 – 2021
17
Directors’ Report (Cont.)
A U D I T O R ’ S I N D E P E N D E N C E
D E C L A R A T I O N
Executive officers
Megan Baldwin
Karen Adams
(appointed June 15, 2021)
Mike Tonroe
(resigned June 24, 2021)
Chief Executive Officer
and Managing Director
Vice President Finance
and Company Secretary
Chief Financial Officer
and Company Secretary
Except as noted, the named persons held their current
position for the whole of the financial year and since the
end of the financial year.
Principles of compensation
Compensation packages include a mix of fixed and variable
compensation and long‑term performance based incentives.
Diversity
The directors consider annually if the diversity of the
Company’s personnel is appropriate. During the three years
ended June 30, 2021, 43% of the directors and 63% of employees
were female.
Fixed compensation
The level of fixed remuneration is set to provide a base level
of compensation which is both appropriate to the position
and is competitive in the market.
The remuneration committee accesses external advice
independent of management if required.
Fixed compensation comprises salary and superannuation and
is reviewed every 12 months by the remuneration committee.
No external advice has been sought during either 2021 or 2020.
Performance linked compensation
Short Term Incentives (STI): The objective of STI is to link
the achievement of the Company’s operational targets with the
remuneration received by the executives charged with meeting
those targets. The total potential STI available is set at a level
that provides sufficient incentive to the executive to achieve
the operational targets at a cost to the Company that is
reasonable in the circumstances.
The directors have obtained a declaration of independence from
Deloitte Touche Tohmatsu, the Company’s auditors, which is set
out on page 27 and forms part of the directors’ report for the
financial year ended June 30, 2021.
P R O C E E D I N G S O N B E H A L F
O F T H E C O M P A N Y
There were no persons applying for leave under section 237 of
the Corporations Act 2001 to bring, or intervene in, proceedings
on behalf of the Company.
R E M U N E R A T I O N R E P O R T –
A U D I T E D
This remuneration report, which forms part of the directors’
report, sets out information about the remuneration of Opthea
Limited’s key management personnel for the financial year ended
June 30, 2021. The term ‘key management personnel’ refers to
those persons having authority and responsibility for planning,
directing and controlling the activities of the Group, directly or
indirectly, including any director (whether executive or otherwise)
of the Group.
Key management personnel
The directors and other key management personnel of the
Group during or since the end of the financial year were:
Non‑executive directors
Jeremy Levin
(appointed October 5, 2020)
Geoffrey Kempler
(resigned October 12, 2020)
Julia Haller
(appointed June 1, 2021)
Judith Robertson
(appointed June 1, 2021)
Chairman,
Non‑executive director
Chairman,
Non‑executive director
Non‑executive director
Non‑executive director
Daniel Spiegelman
(appointed September 10, 2020)
Non‑executive director
Michael Sistenich
Lawrence Gozlan
(appointed July 24, 2020)
Non‑executive director
Non‑executive director
18
Opthea Limited
Actual STI payments in the form of cash bonuses to key
management personnel (KMP) depend on the extent to
which specific targets set at the beginning of the financial
year (or shortly thereafter) are met. The targets consist of
a number of Key Performance Indicators (KPIs) covering
corporate objectives and individual measures of performance.
Individual KPIs are linked to the Company’s development plans.
On an annual basis, after consideration of performance against
KPIs, the remuneration committee determines the amount,
if any, of the STI to be paid to KMP. Payments of the STI bonus
are made in the following reporting period.
The remuneration committee considered the STI payment for
the 2021 financial year in August 2021. Based on the achievement
of operational objectives in the financial year, the remuneration
committee has determined there will be US$244,145 STI bonus
paid to KMP for the 2021 financial year (2020: US$112,247).
Consequences of performance on shareholder wealth
Long term incentive plan (LTIP): The objective of the LTIP is to
reward KMP in a manner that aligns this element of compensation
with the creation of shareholder wealth. LTIP grants are made
to KMP and employees who are able to influence the generation
of shareholder wealth and have a direct impact on the Company’s
performance and development. Option vesting conditions are
based on continued service to the Company by the KMP.
The Company implemented an LTIP to attract, retain and
motivate eligible employees, essential to the continued growth
and development of the Company. The LTIP was approved
by shareholders at the Company’s 2014 AGM. The limit of the
Company’s share capital to be granted under the LTIP was
increased to 10% at the 2016 EGM.
In considering the Company’s performance and benefits for shareholder wealth, the remuneration committee have regard
to operational contributions and the following indices in respect of the current and previous four financial years. Due to the change in
functional currency and presentation currency in the current year, the current and prior year has been restated to US currency with the
remaining years remaining in $A. Refer to Note 3 Change in presentation and functional currencies for more information in regard to
the determination of the change.
Revenue including finance income
440,615
539,514
914,840
1,143,822
573,421
Loss before tax
Tax benefit
Loss after tax
(50,283,342)
(16,831,966)
(35,547,034)
(28,919,488)
(9,360,808)
4,938,846
5,708,767
14,636,973
12,017,248
3,167,912
(45,344,496)
(11,123,199)
(20,910,061)
(16,902,240)
(6,192,896)
2021
US$
2020
US$
2019
A$
2018
A$
2017
A$
2021 and 2020 is US$ with remaining years presented in A$ refer to Note 3 Change in presentation and functional currencies.
Basic loss per share
Net Tangible Asset (NTA) backing per share @ June 30
2021
US$
(0.14)
0.39
2020
US$
(0.04)
0.17
Opthea share price @ June 30
A$1.34
A$2.36
Change in share price is one of the financial performance targets considered in setting STI.
2019
A$
(0.09)
0.12
0.67
2018
A$
(0.04)
0.19
0.53
2017
A$
(0.04)
0.27
0.75
Annual Report 2020 – 2021
19
Directors’ Report (Cont.)
Service contracts
Non‑executive directors
Dr Megan Baldwin, CEO and Managing Director, is employed
under an ongoing contract that commenced on February 24, 2014.
Under the terms of the present contract (including any subsequent
board approvals relating to fixed remuneration) Megan:
/ Receives fixed remuneration of A$453,200 per annum from
July 1, 2020.
/ May resign from her position and thus terminate this contract
by giving three months’ notice.
On resignation, any unvested LTI options or conditional rights
will be forfeited. The Company may terminate this employment
agreement by providing:
/ 12 months’ notice; or
/ Payment in lieu of the notice period (as detailed above)
based on the fixed component of Megan’s remuneration
plus implied bonus.
On termination notice by the Company, any LTIP options that have
vested or that will vest during the notice period will be released.
Options granted that have not yet vested will be forfeited.
The Company may terminate the contract at any time without
notice if serious misconduct has occurred.
Where termination with cause occurs, Megan is only entitled to
that portion of remuneration that is fixed, and only up to the date
of termination. On termination with cause, any unvested options
will immediately be forfeited.
Karen Adams, Vice President and Company Secretary, has an
ongoing contract. The Company may terminate the employment
agreement by providing three months’ notice or providing payment
in lieu of the notice period (based on the fixed component
of remuneration). Karen Adams may resign from her position
and thus terminate this contract by giving three months’ notice.
The Company may terminate Karen Adams contract at any
time without notice if serious misconduct has occurred.
Where termination with cause occurs, the executive is only
entitled to that portion of remuneration that is fixed and only
up to the date of termination.
The base non‑executive director fee is US$75,000 per annum
for the Chairman, US$50,000 per annum for other US based
non‑executive directors, and A$67,500 per annum for all Australian
based non‑executive directors. Base fees cover all main board
activities. Membership of board committees attract the following
fees: Chair Audit and Risk US$20,000, Chair of Nominations and
Remuneration US$10,000/A$13,140, and general committee fees
of US$5,000/A$6,570 per annum.
Non‑executive directors are not provided with retirement
benefits apart from statutory superannuation.
The Company implemented a non‑executive director share and
option plan (NED Plan) following its approval at the 2014 AGM.
Approval of further grant of options to non‑executive directors
under the NED Plan was made at the 2018 AGM. Under the
NED Plan, present and future non‑executive directors may:
/ Elect to receive newly issued ordinary shares (Shares) or
options to acquire newly issued Shares in lieu of receiving
some or all of their entitlement to their director’s existing
cash remuneration (in accordance with article 61.8 of the
Company’s constitution);
/ Be awarded newly issued Shares or options to acquire newly
issued Shares in lieu of additional cash remuneration in respect
of services provided to the Company which in the opinion of
the Board are outside the scope of the ordinary duties of the
relevant director (in accordance with article 61.5 of the
Company’s constitution); and/or
/ Otherwise be awarded newly issued Shares or options to acquire
newly issued Shares as part of the directors’ remuneration
in addition to any existing cash remuneration paid to directors
(if any).
Advantages of the NED Plan are that it:
/ Assists the Company in preserving its cash for use towards
advancing the Company’s lead molecule, OPT‑302, through
Phase 2 and Phase 3 clinical studies;
/ Gives non‑executive directors an opportunity to demonstrate
their commitment and support for the Company through
sacrificing some or all of their director’s fees for Shares or
options in Opthea; and
/ Provides the Company with further flexibility in the design
of the directors’ remuneration packages and in turn assists
the Company with retaining existing directors and attracting
new additional directors with the relevant experience and
expertise, in both cases to further advance the prospects
of the Company.
20 Opthea Limited
Directors’ and executive officers’ remuneration
Details of the nature and amount of each major element of remuneration of each director and key management personnel of the
Company are:
Non‑Executive directors:
Jeremy Levin5
2021
2020
Geoffrey Kempler6 2021
2020
Michael Sistenich 2021
2020
Lawrence Gozlan2 2021
2020
Salary
& Fees
US$
54,032
–
21,534
60,683
64,344
40,274
60,416
–
Daniel Spiegelman4 2021
64,583
Julia Haller3
2020
2021
2020
Judith Robertson3 2021
Sub‑total
Non‑executive
directors
2020
2021
2020
Executive directors:
–
4,250
–
4,250
–
273,409
100,957
Megan Baldwin
2021
2020
338,618
295,346
147,166
67,988
Other Key Management Personnel:
Karen Adams7
Mike Tonroe8
Totals
2021
2020
2021
2020
2021
2020
31,039
–
237,535
172,404
880,601
568,707
–
–
71,314
44,259
214,480
112,247
Short
Term
Post
Employ‑
ment
Cash
bonus1
US$
Super‑
annuation
US$
Long
Term
Long
Service
Leave
US$
Term‑
ination
benefits
Term‑
ination
Pay
US$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,046
5,765
–
3,826
–
–
–
–
–
–
–
–
2,046
9,591
45,666
34,517
2,949
–
28,889
20,524
79,550
64,632
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Share‑
based
payment
Options
US$
Total
US$
1,158,465
1,212,497
–
–
85,228
–
–
23,580
151,676
64,344
85,228
129,328
1,252,173
1,312,589
–
–
1,487,000
1,551,583
–
–
–
–
–
–
4,250
–
4,250
–
3,897,638
4,173,093
170,456
281,004
–
531,450
170,458
568,309
–
–
–
79,837
33.988
–
337,738
317,024
3,897,638
5,076,269
420,751
1,166,337
1 Bonuses are paid in the financial year following the year in which they are earned.
2 Lawrence Gozlan was appointed as a non‑executive director on July 24, 2020. Mr Gozlan’s annual director fee is A$67,500.
3 Director appointed June 1, 2021.
4 Director appointed September 10, 2020.
5 Director appointed October 5, 2020
6 Director resigned October 12, 2020
7 Appointed June 15, 2021
8 Resigned June 24, 2021
Annual Report 2020 – 2021
Total
perform‑
ance
related
%
96%
–
0%
56%
0%
66%
95%
–
96%
–
0%
–
0%
–
93%
61%
28%
42%
0%
21%
39%
81%
46%
21
Directors’ Report (Cont.)
Equity instruments
All options refer to options over ordinary shares of Opthea Limited which are exercisable on a one‑for‑one basis under the Long Term
Incentive (LTIP) and Non‑executive share and options (NED) plans.
Options over equity instruments granted as compensation
Details of options over ordinary shares in the Company that were granted as compensation to KMP during the reporting period
and details of options that vested during the reporting period are as follows:
Name
Jeremy Levin
Daniel Spiegelman
Lawrence Gozlan
Mike Tonroe
During the financial year
Number of
options granted
Number of
options vested1
3,000,000
2,000,000
2,000,000
–
750,000
500,000
500,000
600,000
1 Options that vested during the financial year were originally granted in the year ended June 30, 2021 and June 30, 2019.
Options Granted during the year have the following Fair values at Grant date, US$0.88, US$1.24 and US$1.05 with the following exercise
price US$1.56, US$2.16 and US$3.24, for Jeremy Levin, Daniel Spiegelman and Lawrence Gozlan, respectively. All options expire on the
earlier of their expiry date or termination of the individual’s employment. Option vesting is conditional on the individual being employed
or in office. The options are exercisable up to three years after they vest.
Exercise of options granted as compensation
During the reporting period, 5,845,804 shares were issued to KMP on the exercise of 8,400,000 of options previously granted
as compensation.
During the year, 8,400,000 options were exercised by the following key management personnel using the cashless exercise mechanism
available under the LTIP and NED Plans. On the exercise of the options, the Company issued 5,845,804 ordinary shares.
The number of shares was determined by the value calculated between the market price of the shares (based on a volume weighted
average price (“VWAP”) for the 5 trading days prior to exercise date) of A$1.672 for 7,000,000 options and A$1.647 for 1,400,000
options and an exercise price of A$0.48 for 7,800,000 options and A$0.855 for 600,000 options.
No. of
options
exercised
No. of ordinary
shares of Opthea
Limited issued
4,000,000
2,000,000
1,000,000
800,000
600,000
2,851,675
1,425,837
Issue date
March 7, 2016
March 7, 2016
712,919
March 7, 2016
566,849
March 31, 2016
288,524
April 3, 2019
Amount
unpaid
$nil
$nil
$nil
$nil
$nil
Expiry date
of Rights
March 7, 2021
March 7, 2021
March 7, 2021
January 1, 2022
April 3, 2023
8,400,000
5,845,804
Name
Megan Baldwin
Geoffrey Kempler
Michael Sistenich
Mike Tonroe
Mike Tonroe
22
Opthea Limited
Details of options affecting current and future remuneration
Details of vesting profiles of the options held by each KMP of the Company are:
Megan Baldwin
Jeremy Levin
Geoffrey Kempler
Michael Sistenich
Daniel Spiegelman
Grant date
% vested
% forfeited1
Number
of options
1,320,000
1,320,000
1,360,000
March 7, 2016
March 7, 2016
March 7, 2016
3,000,000 November 29, 2018
750,000
750,000
750,000
750,000
660,000
660,000
680,000
January 19, 2021
January 19, 2021
January 19, 2021
January 19, 2021
March 7, 2016
March 7, 2016
March 7, 2016
1,500,000 November 29, 2018
330,000
330,000
340,000
March 7, 2016
March 7, 2016
March 7, 2016
1,500,000 November 29, 2018
500,000
October 12, 2020
500,000
October 12, 2020
500,000
October 12, 2020
500,000
October 12, 2020
100%
100%
100%
100%
25%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
Financial
years
in which
grant vests
July 1, 2015
July 1, 2016
July 1, 2017
July 1, 2019
0%
0%
0%
0%
0% July 1, 2020
0%
July 1, 2021
0% July 1, 2022
0% July 1, 2023
0%
0%
0%
0%
0%
0%
0%
0%
July 1, 2015
July 1, 2016
July 1, 2017
July 1, 2019
July 1, 2015
July 1, 2016
July 1, 2017
July 1, 2019
0% July 1, 2020
0%
July 1, 2021
0% July 1, 2022
0% July 1, 2023
Vesting
Conditions
Continued
service
Continued
service
Continued
service
Continued
service
Continued
service
Continued
service
Lawrence Gozlan
500,000
October 12, 2020
100%
0% July 1, 2020
500,000
October 12, 2020
500,000
October 12, 2020
500,000
October 12, 2020
0%
0%
0%
0%
July 1, 2021
0% July 1, 2022
0% July 1, 2023
1 The percentage forfeited in the year represents the reduction from the maximum number of options available to vest due to vesting criteria not
being achieved.
Annual Report 2020 – 2021
23
Directors’ Report (Cont.)
Options over equity instruments
The movement during the reporting period by number of rights and options over ordinary shares in Opthea Limited held directly,
indirectly or beneficially, by each KMP, including their related parties, is as follows:
Lapsed
Forfeited
Number
of options:
Held at
July 1
Granted
as compen‑
sation
Megan Baldwin
2021
7,000,000
Jeremy Levin
2020
7,000,000
2021
2020
–
–
Geoffrey Kempler1 2021
3,500,000
2020 3,500,000
Daniel Spiegelman 2021
2020
Lawrence Gozlan
2021
2020
–
–
–
–
Michael Sistenich
2021
2,500,000
2020 2,500,000
Other executives
Mike Tonroe2
2021
1,400,000
2020
1,400,000
–
–
3,000,000
–
–
–
2,000,000
–
2,000,000
–
–
–
–
–
Options
exercised
(4,000,000)
–
–
–
(2,000,000)
–
–
–
–
–
(1,000,000)
–
(1,400,000)
–
Total
2021 14,400,000
7,000,000 (8,400,000)
2020 14,400,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Held at
June 30
Vested
during the
year
Vested and
exercisable
3,000,000
–
3,000,000
7,000,000
3,000,000
7,000,000
3,000,000
750,000
750,000
–
1,500,000
–
–
–
1,500,000
3,500,000
1,500,000
3,500,000
2,000,000
500,000
500,000
–
–
–
2,000,000
500,000
500,000
–
1,500,000
–
–
–
1,500,000
2,500,000
1,500,000
2,500,000
–
–
–
1,400,000
600,000
1,400,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 13,000,000
1,750,000
6,250,000
– 14,400,000 6,600,000 14,400,000
1. Geoffrey Kempler resigned October 12, 2020.
2. Mike Tonroe resigned as at June 24, 2021. All options had been converted prior to his resignation.
24
Opthea Limited
K E Y M A N A G E M E N T P E R S O N N E L T R A N S A C T I O N S
Movements in shares
The movement during the reporting period in the number of ordinary shares in Opthea Limited held, directly, indirectly or beneficially,
by each KMP including their related parties is as follows:
Number of
Ordinary Shares:
Non‑executive directors
Jeremy Levin
Geoffrey Kempler1
Michael Sistenich
Daniel Spiegelman
Lawrence Gozlan
Julia Haller
Judy Robertson
Executives
Megan Baldwin
Karen Adams
Mike Tonroe1
Total
Balance at
beginning
of period
July 1
–
–
900,960
900,960
520,178
520,178
–
–
–
–
–
–
–
–
987,723
987.723
–
–
–
–
2,408,861
2,408,861
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Granted as
remuneration
On Exercise
of Quoted
Options
Purchased
in the year
Sold during
the year
Balance
at end
of period
June 30
–
–
2,326,797
900,960
1,233,097
520,178
–
–
1,877,357
–
–
–
–
–
3,839,398
987,723
–
–
–
–
–
–
1,425,837
–
712,919
–
–
–
–
–
–
–
–
–
2,851,675
–
–
–
855,373
–
–
–
–
–
–
–
–
–
1,877,357
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(855,373)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,845,804
1,877,357
(855,373)
9,276,649
–
–
–
2,408,861
1. Geoffrey Kempler resigned as at October 12, 2020. Mike Tonroe resigned as at June 24, 2021.
Annual Report 2020 – 2021
25
Directors’ Report (Cont.)
This report has been signed in accordance with a resolution of the directors made pursuant to S.298 (2) of the Corporations Act 2001
on August 30, 2021.
For and on behalf of the board:
Megan Baldwin
CEO & Managing Director Opthea Limited
Melbourne
August 30, 2021
26
Opthea Limited
Declaration of Independence
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Board of Directors
Opthea Limited
Suite 403, Level 4
650 Chapel Street
South Yarra VIC 3141
30 August 2021
Dear Directors,
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo OOpptthheeaa LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Opthea Limited.
As lead audit partner for the audit of the financial report of Opthea Limited for the year ended 30 June 2021,
I declare that to the best of my knowledge and belief, there have been no contraventions of:
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Vincent Snijders
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Annual Report 2020 – 2021
27
“ Our Phase 3 program
is truly a global one. Over
an approximate 18‑month
period, both trials will each
enroll approximately 990
patients from more than
20 countries worldwide.
A key focus of our current
activities is to continue our
interactions with regulatory
authorities worldwide to
facilitate completion of
all site activations on a
country‑by‑country basis.”
M E G A N B A L D W I N
P H D , M A I C D
28
Opthea Limited
Management Team
M E G A N B A L D W I N
P H D , M A I C D
Chief Executive Officer
and Managing Director
Dr Megan Baldwin was appointed
CEO and Managing Director of Opthea
in February 2014.
Dr Baldwin has over 20 years of
experience focusing on angiogenesis
and therapeutic strategies for ophthalmic
and cancer indications. Since joining
Opthea in 2008, she has held various
positions, including Head of Preclinical
R&D and Chief Executive Officer
of Opthea Pty Ltd, the 100% owned
subsidiary of Opthea, developing OPT‑302
for the treatment of wet age‑related
macular degeneration. Prior to joining
Opthea, Dr Baldwin was employed at
Genentech (now Roche), the world
leader in the field of angiogenesis‑based
therapies for cancer and other diseases.
Her experience included several years
as a researcher in the group of leading
angiogenesis expert Napoleone Ferrara,
before moving to Genentech’s commercial
division and having responsibility for
corporate competitive intelligence
activities. In these roles, she developed
extensive commercial and scientific
knowledge in the field of anti‑angiogenic
and oncology drug development.
Megan holds a PhD in Medicine from
the University of Melbourne, having
conducted her doctoral studies at the
Ludwig Institute for Cancer Research.
Dr Baldwin is on the board of Ausbiotech
and is a member of the Australian Institute
of Company Directors.
R I C H A R D C H A D W I C K
P H D
Head of Intellectual Property
Richard Chadwick, who joined Opthea
in February 2008, is qualified as both
a European and Australian patent
attorney. Richard joined Opthea from
FB Rice & Co, where he had been
working for five years in the Biotechnology
Group. Prior to that, Richard had 10 years’
experience in intellectual property in the
UK. This included working as an in‑house
attorney at Dow Corning Limited and
five years working as an in‑house
attorney at Unilever.
K A R E N A D A M S
B . B U S , C P A , G A I C D ,
F C G , F G I A
Vice President Finance
and Company Secretary
Karen Adams was appointed Vice
President Finance in May 2021 and
Company Secretary in June 2021. Karen is
accountable directly to the board, through
the chair, on all matters to do with the
proper functioning of Opthea’s board.
Prior to joining Opthea, Karen was the
Chief Financial Officer of the Victor
Smorgon Group in Melbourne.
Karen has over 20 years’ experience
of financial management in board‑level
positions for private and listed companies
in Australia, UK, the US and Ireland.
Karen holds a Graduate Degree in Business
from Swinburne University and is a
member of the Australian Society of
Chartered Accountants, Graduate of the
Australian Institute of Company Directors
and a Fellow of the Institute of Company
Secretaries. Karen is also the Company
Secretary of the Company’s subsidiary,
Vegenics Pty Ltd.
Annual Report 2020 – 2021
29
Management Team (Cont.)
M I K E G E R O M E T T A P H D
Head of CMC Development
I A N L E I T C H P H D
Director – Clinical Research
C L A R E P R I C E B P H A R M
Director of Clinical Development
Mike Gerometta has been Head of
Chemistry, Manufacturing & Controls
(CMC) Development for Opthea since
2008 with responsibilities encompassing
outsourcing of Opthea’s biopharmaceutical
research and cGMP manufacturing
activities. Mike has over 30 years’
experience in the Australian biotechnology
industry, working with numerous contract
manufacturing organizations overseas and
locally in all facets of translational CMC
from concept through to Phase 2 studies.
In this time, he has successfully guided
the manufacture of six biologics through
to the clinic, including oversight of four
nonclinical programs, as well as associated
global regulatory interactions. Previously
as Chief Operating Officer of Q‑Gen, the
manufacturing facility of the Queensland
Institute of Medical Research, he restructured
the service business to align with QIMR’s
strategic objectives. Mike has also directed
the development of numerous in vitro
diagnostic products through to the market
over 19 years at Agen Biomedical, ultimately
as Research and Product Development
Director. Mike was awarded his PhD in
biotechnology from the Queensland
University of Technology and has a
degree in chemistry from the University
of Technology in Sydney.
30
Opthea Limited
Ian Leitch has been Director of Clinical
Research of Opthea since September 2011.
He has over 20 years of research and
management experience from drug
discovery through clinical development in
biotechnology/pharmaceutical companies.
For the five years prior to joining Opthea,
he was a member of the Medical Sciences
group at Amgen Inc in Thousand Oaks,
California, involved in the development
of novel therapeutics in Amgen’s oncology
pipeline. In his role as Senior Manager in the
Early Development Oncology Therapeutic
Area, he had responsibility for the oversight,
design, management and execution of
Phase 1 – 2 clinical studies in oncology.
Prior to joining Amgen, he spent eight
years at Miravant Medical Technologies in
Santa Barbara, California. He held positions
of increasing responsibility, including
Senior Program Manager for Cardiovascular
Research and Clinical Study Director for
Ophthalmology. At Miravant, he managed
preclinical efficacy studies, developed
relationships with Key Opinion Leaders
and designed Phase 1 – 2 clinical studies
in a collaboration with the cardiovascular
device company Guidant Inc.
He previously held the position of NHMRC
Senior Research Officer at the University
of Newcastle and was based at the John
Hunter Hospital in Australia. He received
his BSc (Hons), PhD from the Department
of Pharmacology, Faculty of Medicine,
at Monash University and completed part
of the doctoral studies at the University
of California, Santa Barbara.
Clare Price was appointed Director of
Clinical Development at Opthea in July
2016. Clare has over 20 years of clinical
and drug development experience starting
her career in the main R&D function of
SmithKline Beecham in the UK.
She spent over eight years in various
clinical roles within the company with
responsibility for the design, management
and execution of clinical studies from Phase
1 to 3 across a number of therapeutic areas.
For the remaining three years Clare formed
part of the project management group
of the newly merged GlaxoSmithKline,
responsible for the project management
of full drug development programs from
molecule inception through non‑clinical
and clinical studies, regulatory aspects
and commercialization.
Clare has held senior clinical roles in
two ASX‑listed biotechnology companies,
firstly Acrux, and then Starpharma.
Over her nine years at Starpharma she
implemented and delivered successful
Phase 2 and 3 clinical programs,
including extensive regulatory interaction
and negotiation, leading to the successful
commercialization of the lead
candidate product.
Clare is a registered pharmacist,
with a degree in Pharmacy, from
the University of Bath in the UK.
A N N E T T E L E A H Y
Director – Clinical Research
Annette Leahy commenced at Opthea
in August 2017 as Director of Clinical
Research. Annette has 20 years clinical
research experience including operational
and project management roles across
biotechnology, pharmaceutical, and
CRO industries.
Prior to joining Opthea Annette held senior
operational roles at Swisse and Novotech
successfully building clinical trial teams
and departments.
Annette also has 12 years project
management experience including leading
a global influenza clinical trials program
under a US government contract at Biota,
managing early phase clinical studies in
a Phase 1 unit at Nucleus Network and
managing European clinical projects while
living in the UK and working for Mitsubishi
Tanabe Pharma Europe.
Annette has a Bachelor of Health
Information Management from
La Trobe University.
Annual Report 2020 – 2021
31
32
Financial
Report
C O N T E N T S
33 CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
34 CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
35 CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
36 CONSOLIDATED STATEMENT
OF CASH FLOWS
37 NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
70 DIRECTORS’ DECLARATION
71
INDEPENDENT AUDITOR’S REPORT
76 ASX ADDITIONAL INFORMATION
32
Opthea Limited
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
F O R T H E Y E A R E N D E D J U N E 3 0 , 2 0 2 1
Revenue
Other income
Research and development expenses
Patent expenses
Intellectual property costs
Administrative expenses
Occupancy expenses
Net foreign exchange gain/(loss)
Loss before income tax
Income tax benefit
Loss for the year
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Fair value gains on investments in financial assets
Other comprehensive income for the period, net of tax
Total comprehensive loss for the year
Loss for the year is attributable to:
Owners of the Company
Total comprehensive loss for the year is attributable to:
Owners of the Company
Loss per share attributable to the owners of the Company:
– Basic and diluted loss per share (cents)
2021
US$
68,613
398,951
Restated
2020
US$
59,061
522,082
(25,891,851)
(12,064,008)
(137,666)
(282,042)
(291,235)
(74,938)
(13,399,748)
(4,702,860)
(18,445)
(23,272)
(11,011,961)
(265,989)
Note
7
8
9
10
10
11
(50,283,342)
(16,831,966)
12
4,938,846
5,708,767
(45,344,496)
(11,123,199)
469,767
469,767
41,098
41,098
(44,874,729)
(11,082,101)
24
(45,344,496)
(11,123,199)
(45,344,496)
(11,123,199)
(44,874,729)
(11,082,101)
(44,874,729)
(11,082,101)
13
(14.15)
(4.27)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes. All amounts presented in respect of prior periods have been restated to reflect the change in presentation
currency as set out in the accounting policies.
Annual Report 2020 – 2021
33
Consolidated Statement of Financial Position
A T J U N E 3 0 , 2 0 2 1
Assets
Current assets
Cash and cash equivalents
Current tax receivable
Receivables
Prepayments
Total current assets
Non‑current assets
Investments in financial assets
Plant and equipment
Right‑of‑use asset
Prepayments
Total non‑current assets
Total assets
Liabilities
Current liabilities
Payables
Lease liabilities
Other financial liabilities
Provisions
Total current liabilities
Non‑current liabilities
Lease liabilities
Provisions
Total non‑current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Pre‑funded warrants
Accumulated losses
Reserves
Total equity
2021
US$
Restated
2020
US$
Restated
2019
US$
Note
14
12
15
16
17
18
19
20
18
21
18
22
23
23
24
24
118,193,177
42,650,858
15,121,820
4,972,898
5,868,152
10,278,082
565,286
14,386,155
195,573
329,151
207,701
298,156
138,117,516
49,043,734
25,905,759
–
23,259
93,852
174,541
199,417
25,568
167,460
–
501,454
37,963
–
–
291,652
392,445
539,417
138,409,168
49,436,179
26,445,176
2,501,518
4,053,961
4,179,453
112,965
–
492,002
99,745
163,548
440,765
–
17,971
378,168
3,106,485
4,758,019
4,575,592
–
16,915
16,915
82,545
27,643
110,188
–
17,445
17,445
3,123,400
4,868,207
4,593,037
135,285,768
44,567,972
21,852,139
234,147,526
113,852,364
80,331,016
–
–
–
(124,123,982)
(78,779,486)
(67,656,287)
25,262,224
9,495,094
9,177,410
135,285,768
44,567,972
21,852,139
The above consolidated statement of financial position should be read in conjunction with the accompanying notes. All amounts presented
in respect of prior periods have been restated to reflect the change in presentation currency as set out in the accounting policies.
34
Opthea Limited
Consolidated Statement of Changes in Equity
F O R T H E Y E A R E N D E D J U N E 3 0 , 2 0 2 1
–
–
–
–
–
–
–
–
–
–
–
–
Note
24
24
23
23
24
As at July 1, 2019
(Restated)
Fair value gains
on investments in
financial assets*
Loss for the year*
Total comprehensive
income and expense
for the period
Recognition of
share‑based payment
Issue of ordinary shares
on the exercise of options
Issue of ordinary shares
Exchange on conversion
Balance at June 30, 2020
(Restated)
Contributed
equity
US$
80,331,016
–
–
–
–
284,828
33,236,520
–
113,852,364
As at July 1, 2020 (Restated)
113,852,364
Pre‑funded
warrants
US$
Share‑based
payments
reserve
US$
Fair value of
investments
reserve
US$
FX
translation
reserve
US$
Accumulated
losses
US$
Total
equity
US$
2,401,769
517,700
6,257,941
(67,656,287)
21,852,139
–
–
–
41,098
–
41,098
732,688
(284,828)
–
–
_
–
–
–
–
–
–
–
266,451
(7,389)
(430,336)
–
41,098
(11,123,199)
(11,123,199)
(11,123,199)
(11,082,101)
–
–
–
–
732,688
–
33,236,520
(171,274)
3,116,080
551,409
5,827,605 (78,779,486) 44,567,972
3,116,080
551,409
5,827,605
(78,779,486)
44,567,972
24
24
23
Fair value gains
on investments in
financial assets*
Loss for the year*
Total comprehensive
income and expense
for the period
Recognition of
share‑based payment
Issue of ordinary shares
on the exercise of options
Issue of ordinary shares
and pre‑funded warrants,
net of issuance cost
$10,126,959
Issue of ordinary shares on
exercise of pre‑funded
warrants net of issuance
costs $1,099,412
–
469,767
–
–
–
469,767
–
–
–
–
–
3,897,638
3,271,542
–
(3,271,542)
23
105,477,591
11,546,029
23
11,546,029
(11,546,029)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
469,767
(45,344,496) (45,344,496)
(45,344,496)
(44,874,729)
–
–
3,897,638
–
–
117,023,620
–
–
Exchange on conversion
24
–
Balance at June 30, 2021
234,147,526
–
–
345,474
64,235
14,261,558
–
14,671,267
4,087,650
1,085,411
20,089,163 (124,123,982) 135,285,768
* Amounts are after tax.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. All amounts presented
in respect of prior periods have been restated to reflect the change in presentation currency as set out in the accounting policies.
Annual Report 2020 – 2021
35
Consolidated Statement of Cash Flows
F O R T H E Y E A R E N D E D J U N E 3 0 , 2 0 2 1
Cash flows from operating activities
Interest received
Royalty and license income received
Grant income
Payment of lease interest
Payments to suppliers, employees and for research
& development and intellectual property costs (inclusive of GST)
Research and development tax incentive scheme credit received
Net cash flows used in operating activities
Cash flows from investing activities
Cash received on disposal of financial asset
Purchase of plant and equipment
Net cash flows provided by investing activities
Cash flows from financing activities
Payment of lease liabilities
Net proceeds on issue of shares
Net proceeds on issuance of pre‑funded warrants
Cash received for ordinary shares issued on exercise of options
Net cash flows provided by financing activities
Net increase/(decrease) in cash and cash equivalents
Effects of exchange rate changes on the balance of cash held in foreign currencies
Cash and cash equivalents at beginning of year
Cash and cash equivalents at the end of the year
2021
US$
Restated
2020
US$
Note
390,128
103,031
26,949
(5,782)
496,159
96,189
41,629
(5,147)
(51,894,593)
(16,437,147)
5,834,100
10,118,697
27
(45,546,167)
(5,689,620)
17
669,184
(12,702)
335,746
(2,531)
656,482
333,215
(87,373)
(66,781)
105,477,591
32,951,692
11,546,029
–
–
284,828
116,936,247
33,169,739
72,046,562
27,813,334
3,495,757
(284,296)
42,650,858
15,121,820
14
118,193,177
42,650,858
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. All amounts presented
in respect of prior periods have been restated to reflect the change in presentation currency as set out in the accounting policies.
36
Opthea Limited
Notes to the Consolidated
Financial Statements
1 . R E P O R T I N G E N T I T Y
Opthea Limited (the Company) is a listed public company
incorporated in Australia. The address of its registered office
and principal place of business is: Suite 0403, Level 4, 650 Chapel
Street, South Yarra, VIC 3141, Australia. These consolidated
financial statements comprise the Company and its subsidiaries
(together referred to as the Group).
The Group’s principal activity is the development of new
drugs for the treatment of eye diseases.
2 . B A S I S O F A C C O U N T I N G
These financial statements are general purpose financial statements
which have been prepared in accordance with the Corporations
Act 2001, Australian Accounting Standards and Interpretations,
and comply with other requirements of the law.
The financial statements comprise the consolidated financial
statements of the Group. For the purposes of preparing the
consolidated financial statements, the Company is a for‑profit entity.
Compliance with Australian Accounting Standards ensures
that the financial statements and notes of the Company
and the Group comply with International Financial Reporting
Standards (IFRS).
The financial statements were authorized for issue by the
directors on August 30, 2021.
3 . S U M M A R Y O F
A C C O U N T I N G P O L I C I E S
The consolidated financial statements have been prepared
using the significant accounting policies and measurement
bases summarized below.
Basis of measurement
The consolidated financial statements have been prepared
on a historical cost basis, except for the investments classified
as financial assets, which have been measured at fair value.
All amounts are presented in United States dollars unless
otherwise stated.
Change in presentation and functional currencies
Functional currency
An entity’s functional currency is the currency of the primary
economic environment in which the entity operates. During the
current year the Group’s operations have continued to move
further towards being US$ denominated and several other factors
during the period have also contributed to the Group changing its
functional currency during the year, such as the completion of U.S.
initial public offering (IPO) and the NASDAQ listing in October 2020,
opening a US subsidiary in May 2021 for a planned expansion into
the US, and expanding the Board of Directors with the appointment
of four US based Directors. A significant element in the Group’s
assessment to change the functional currency resulted from the
significant increase in expenses denominated in US dollars relating
to advanced clinical trials since the commencement of Phase 3
trials in March 2021. These changes, as well as the fact that the
Group’s principal source of financing is now the U.S. capital
market and all of the Group’s budgeting and planning is conducted
solely in dollars led to the Directors determining that U.S. dollar
(US$) best represents the currency of the primary economic
environment in which the entity now operates. Accordingly, the
Group changed its functional currency from Australian dollar (A$)
to U.S. dollar (US$) effective January 1, 2021.
The change in functional currency has been applied prospectively
with effect from January 1, 2021 in accordance with the
requirements of the Accounting Standards. To give effect in
functional currency, the assets and liabilities of the Group were
converted into U.S. dollars at a fixed exchange rate of
US$1:A$1.2973.
Presentation Currency
Following the change in functional currency, the Group changed
its presentation currency from Australian dollars (A$) to US$.
The change in presentation currency to better reflect the Group’s
business activities and to enhance access to U.S. capital markets.
Prior to the change, the Group reported its financial statements
in Australian dollars (A$).
A change in presentation currency is a change in accounting
policy which is accounted for retrospectively, including the
restatement of 2019 Balance Sheet. In making this change in
presentation currency, the Group followed the requirements set
out in AASB 121 The Effects of Changes in Foreign Exchange
Rates. As required by AASB 121, the consolidated statement
of profit and loss and other comprehensive income and the
consolidated statement of cash flows for each period have
been translated into the presentation currency using the average
exchange rates prevailing during each reporting period. All assets
and liabilities have been translated using the exchange rates
prevailing at the consolidated statement of financial position
dates. Shareholders’ equity transactions have been translated
using the rates of exchange in effect as of the dates of various
capital transactions. All resulting exchange differences arising
from the translation are included as a separate component of
other comprehensive income. All comparative financial information
has been restated to reflect the Group’s results as if they had been
historically reported in US$ and the effect on the consolidated
financial statements resulted in an addition to the foreign currency
translation reserve of US$14.5 million at January 1, 2021.
Annual Report 2020 – 2021
37
3 . S U M M A R Y O F A C C O U N T I N G P O L I C I E S (CONT.)
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiaries. Control is
achieved when the Company:
/ Has power over the investee;
/ Is exposed, or has rights, to variable returns from its
involvement with the investee; and
/ Has the ability to use its power to affect its returns.
Consolidation of a subsidiary begins when the Company obtains
control over the subsidiary and ceases when the Company loses
control of the subsidiary.
All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members
of the Group are eliminated in full on consolidation.
Foreign currency translation
i. Functional and presentation currency
As at January 1, 2021 it was determined that the Group’s
functional and presentation currency had changed from Australian
Dollars to United States Dollars. Therefore, the functional and
presentation currency of the Group is United States dollars (US$).
The prior year financial information has been restated to United
States dollars, and any financial information related to earlier
financial periods remains presented in Australian Dollars (A$)
unless otherwise indicated.
ii. Transactions and balances
Transactions in foreign currencies are initially recorded in the
functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the
rate of exchange ruling at the reporting date.
Non‑monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rate as at
the date of the initial transaction. Non‑monetary items measured
at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
Financial assets and liabilities
Recognition and derecognition of financial assets
Purchases and sales of financial assets that require delivery of
assets within the time frame generally established by regulation
or convention in the marketplace are recognized on the trade date,
i.e., the date that the Group commits to purchase the asset.
Financial assets are derecognized when the right to receive cash
flows from the financial assets has expired or when the entity
38
Opthea Limited
transfers substantially all the risks and rewards of the financial
assets. If the entity neither retains nor transfers substantially
all of the risks and rewards, it derecognizes the asset if it has
transferred control of the assets.
When financial assets are recognized initially, they are measured
at fair value, plus directly attributable transaction costs.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position
comprise cash at bank and in hand and short‑term deposits
with an original maturity of three months or less that are readily
convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value.
For the purposes of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined above.
Other receivables
Other receivables generally comprise bank interest receivable,
other receivables from external parties and Goods and Services
Tax (GST) credits receivable, and are recognized and carried
at original invoice amount less an allowance for any uncollectible
amounts. The amounts are usually received within 30 to 60 days
of recognition.
The Group measures the loss allowance for receivables at an
amount equal to lifetime expected credit losses (ECL). The ECL
on receivables are estimated under the simplified approach as
permitted under AASB 9 “Financial Instruments.” This uses a
provision matrix by reference to past experience of the debtor and
an analysis of the debtor’s current financial position, adjusted for
factors that are specific to the debtors and general economic
conditions of the industry in which the debtors operate.
The Group writes off a receivable when there is information
indicating that the debtor is in severe financial difficulty and
there is no realistic prospect of recovery.
Investments
Investments in financial assets comprise of the Group’s
non‑current investments in listed companies.
On initial recognition, the Group may make an irrevocable election
(on an instrument‑by‑instrument basis) to designate investments
in equity instruments as fair value through other comprehensive
income (FVTOCI). Designation at FVTOCI is not permitted
if the equity instrument is held for trading.
Investments in equity instruments at FVTOCI are initially measured
at fair value plus transaction costs. Subsequently, they are
measured at fair value with gains or losses arising from changes
in the fair value recognized in other comprehensive income and
Notes to the Consolidated Financial Statements (Cont.) 3 . S U M M A R Y O F A C C O U N T I N G P O L I C I E S (CONT.)
accumulated in the fair value of investments reserve. The fair
values of investments in financial assets that are actively traded in
organized financial markets is determined by reference to quoted
market bid prices at the close of business on the reporting date.
The cumulative gain or loss is not reclassified to profit or loss
on disposal of the equity instruments.
The assets’ residual values, useful lives and amortization
methods are reviewed, and adjusted if appropriate, at each
financial year end.
An item of plant and equipment is derecognized upon disposal
or when no further economic benefits are expected from its
use or disposal.
Dividends on these investments in equity instruments are
recognized in profit or loss in accordance with Australian
Accounting Standards.
Finance income
Almost all of the Group’s finance income is earned on short‑term
bank deposits, and as such, finance income is recognized when
the Group’s right to receive the payment is established.
Payables
Payables are carried at amortized cost and due to their
short‑term nature, they are not discounted. They represent
liabilities for goods and services provided to the Group prior
to the end of the financial year that are unpaid and arise when
the Group becomes obliged to make future payments in respect
of the purchase of these goods and services.
The amounts are unsecured and are usually paid within 30 days
of recognition.
Other financial liabilities
Other financial liabilities in the Consolidated Statement of
Financial Position represent the year end marked‑to‑market
value of forward rate foreign exchange contracts to purchase
US dollars (Contracts) which were entered into prior to the
change in functional currency which took place on January 1, 2021.
These Contracts were used to settle US dollar denominated
payables and expired within one year.
The foreign exchange loss on recognition of the Contracts was
included in ‘net foreign exchange gain/(loss)’ in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Plant and equipment
Plant and equipment are stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Depreciation
is calculated on a straight‑line basis over their useful economic
lives as follows:
/ Equipment and furniture – 3 to 10 years; and
/ Leasehold improvements – 8 years or the term of the lease
if shorter.
Leases
The Group assesses at contract inception whether a contract
is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
The Group applies a single recognition and measurement
approach for all leases, except for short‑term leases and leases
of low‑value assets. The Group recognizes lease liabilities to make
lease payments and right‑of‑use assets representing the right
to use the underlying assets.
Right‑of‑use assets
Right‑of‑use assets are recognized at the commencement date of
the lease (that is the date the underlying asset is available for use).
Right‑of‑use assets are measured at cost, less any accumulated
depreciation and any impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right‑of‑use assets
includes the amount of lease liabilities recognized, initial direct
costs incurred, and lease payments made at or before the
commencement date less any lease incentives received.
Right‑of‑use assets are depreciated on a straight‑line basis
over the shorter of the lease terms and the estimated useful
lives of the assets.
Lease liabilities
Lease liabilities are recognized at the commencement date of the
lease at the present value of lease payments to be made over the
lease term. The lease payments include fixed payments (including
in‑substance fixed payments) less any lease incentives receivable.
In calculating the present value of lease payments, the Group
uses its incremental borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily
determinable. The incremental borrowing rate is determined using
market yields on bonds with similar terms to maturity. After the
commencement date, the amount of lease liabilities is increased
to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities
is remeasured if there is a modification, a change in the lease
term, a change in lease payments (e.g., a change to future lease
payments resulting from a change in an index or rate).
Annual Report 2020 – 2021
39
3 . S U M M A R Y O F A C C O U N T I N G P O L I C I E S (CONT.)
Leases of low‑value assets
For short‑term leases (lease term of 12 months or less)
and leases of low‑value assets (such as photo copiers and
telephones), the Group has opted to recognize a lease expense
on a straight‑line basis as permitted by IFRS 16. This expense is
presented within “administrative expenses” in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Research and development costs
Research costs are expensed as incurred. An intangible asset
arising from the development expenditure on an internal project
will only be recognized when the Group can demonstrate the
technical feasibility of completing the intangible asset so that it
will be available for use or sale, its intention to complete and its
ability to use or sell the asset, how the asset will generate future
economic benefits, the availability of resources to complete the
development and the ability to measure reliably the expenditure
attributable to the intangible asset during its development.
As of June 30, 2021 and 2020, the Group is in the research
phase and has not capitalized any development costs to date.
Provisions and employee benefits
i. Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non‑monetary benefits
and annual leave expected to be settled within 12 months of the
reporting date are recognized in current provisions in respect of
employees’ services up to the reporting date. They are measured
at the amounts expected to be paid when the liabilities are settled.
Expenses for non‑accumulating sick leave are recognized when
the leave is taken and are measured at the rate paid or payable.
ii. Long service leave
The liability for long service leave is recognized in the provision
for employee benefits and measured as the present value of
expected future payments to be made in respect of services
provided by employees up to the reporting date. Consideration
is given to expected future wage and salary levels, experience
of employee departures, and periods of service. Expected future
payments are discounted using market yields at the reporting
date on bonds with terms to maturity that match, as closely
as possible, the estimated future cash outflows.
Share‑based payment transactions
The Group provides benefits to directors and employees
(including key management personnel) of the Group in the
form of share‑based payments, whereby employees render
services in exchange for shares or rights over shares
(equity‑settled transactions).
40 Opthea Limited
The cost of these equity‑settled transactions with employees is
measured by reference to the fair value at the date at which they
are granted. Binomial models are used to value the options issued.
The cost of the equity‑settled transactions is recognized,
together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled (the vesting period),
ending on the date on which the relevant employees become fully
entitled to the award (the vesting date).
The charge to profit or loss for the period is the cumulative
amount less the amounts already charged in previous periods.
There is a corresponding credit to equity.
Until an award has vested, any amounts recorded are contingent
and will be adjusted if more or fewer awards vest than were
originally anticipated to do so.
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
Revenue recognition
License revenue in connection with licensing of the Group’s
intellectual property (including patents) to customers is recognized
as a right to use the Group’s intellectual property as it exists at the
point in time in which the license is granted. This is because the
contracts for the license of intellectual property are distinct and
do not require, nor does the customer reasonably expect, that the
Group will undertake further activities that significantly affect
the intellectual property to which the customer has the rights.
Although the Group is entitled to sales‑based royalties from the
eventual sales of goods and services to third parties using the
intellectual property licensed, these royalty arrangements do not in
themselves indicate that the customer would reasonably expect
the Group to undertake such activities, and no such activities are
undertaken or contracted in practice. Accordingly, the promise
to provide rights to the Group’s intellectual property is accounted
for as a performance obligation satisfied at a point in time.
The following consideration is received in exchange for licenses
of intellectual property:
/ Up‑front license fees – these are fixed amounts and are
recognized at the point in time when the Group transfers
the intellectual property to the customer.
/ Sales‑based royalties – these are variable consideration
amounts promised in exchange for the license of intellectual
property and are recognized when the sales to third parties
occur given the performance obligation to transfer the
intellectual property to the customer is already satisfied.
Notes to the Consolidated Financial Statements (Cont.) 3 . S U M M A R Y O F A C C O U N T I N G P O L I C I E S (CONT.)
During the years ended June 30, 2021 and 2020, the Group’s
only revenue related to sales‑based royalties.
Income tax
Current tax
Current tax assets and liabilities for the current and prior periods
are measured at the amount expected to be recovered from or
paid to the taxation authorities based on the current period’s
taxable income.
The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the reporting date.
Research and development tax incentive
The Research and Development (R&D) Tax Incentive Scheme
is an Australian Federal Government program under which
eligible companies with annual aggregated revenue of less than
A$20 million can receive cash amounts equal to 43.5% of eligible
research and development expenditures from the Australian
Taxation Office (ATO). The R&D Tax Incentive Scheme incentive
relates to eligible expenditure incurred in Australia and, under
certain circumstances, overseas on the development of the
Group’s lead candidate, OPT‑302. The R&D tax incentive is
applied annually to eligible expenditure incurred during the Group’s
financial year following annual application to AusIndustry, an
Australian governmental agency, and subsequent filing of its
Income Tax Return with the ATO after the financial year end.
The Group estimates the amount of R&D tax incentive after
the completion of the financial year based on eligible Australia
and overseas expenditures incurred during that year.
The Group has presented incentives in respect of the R&D Tax
Incentive Scheme within income tax benefit in the Statement of
Profit or Loss and Other Comprehensive Income by analogizing
with AASB 112 “Income Taxes”.
Deferred tax
Deferred income tax is provided on all temporary differences at
the reporting date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable
temporary differences except when the deferred income tax
liability arises from the initial recognition of goodwill or of an asset
or liability in a transaction that is not a business combination and
that, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss.
Deferred income tax assets are recognized for all deductible
temporary differences, carry forward of unused tax assets
(or credits) and unused tax losses, to the extent that it is probable
that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilized, except when the
deferred income tax asset relating to the deductible temporary
differences arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit
or taxable profit or loss.
The carrying amount of deferred income tax assets is reviewed at
each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all
or part of the deferred income tax asset to be utilized.
Unrecognized deferred income tax assets are reassessed at
each reporting date and are recognized to the extent that it has
become probable that future taxable profit will allow the deferred
tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted at balance date.
Income taxes relating to items recognized directly in equity are
recognized directly in equity and not in profit or loss.
Tax consolidation legislation
Tax consolidation is a system adopted by the ATO that treats a
group of entities as a single entity for tax purposes. Opthea Limited
and its 100% owned Australian domiciled subsidiary formed a tax
consolidated group effective July 1, 2003. The head entity, Opthea
Limited, and its controlled entity, Vegenics Pty Ltd, are current
members of the tax consolidated group and account for their own
current and deferred tax amounts. Members of the tax consolidated
group have adopted the “separate taxpayer within group” method
to allocate the current and deferred tax amounts to each entity
within the Group.
This method requires adjustments for transactions and events
occurring within the tax consolidated group that do not give rise
to a tax consequence for the Group or that have a different tax
consequence at the level of the Group.
The head entity, which is the parent entity, in assuming the net
unused tax losses and unused relevant tax credits, has recognized
reductions to investments in subsidiaries and where the amount
of tax losses assumed is in excess of the carrying value of the
investment, the parent has recognized the difference as a
distribution from subsidiaries in profit or loss.
Annual Report 2020 – 2021
41
3 . S U M M A R Y O F A C C O U N T I N G P O L I C I E S (CONT.)
Other taxes
Revenues, expenses, assets and liabilities are recognized net
of the amount of GST except:
/ When the GST incurred on a purchase of goods and services
is not recoverable from the taxation authority, in which case
the GST is recognized as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
/ Receivables and payables are stated with the amount
of GST included.
The net amount of GST recoverable from, or payable to the
taxation authority is included as part of receivables or payables
in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross
basis and the GST component of cash flows arising from investing
and financing activities, which is recoverable from, or payable to,
the taxation authority is classified as part of operating cash flows.
Commitments and contingencies are disclosed net of the amount
of GST recoverable from, or payable to, the taxation authority.
Comparatives
The comparative period has been restated due to the change
in presentation currency.
4 . C R I T I C A L A C C O U N T I N G
J U D G M E N T S A N D K E Y S O U R C E S
O F E S T I M A T I O N U N C E R T A I N T Y
In applying the Group’s accounting policies, management
continually evaluates judgments, estimates and assumptions
based on experience and other factors, including expectations
of future events that may have an impact on the Group.
All judgments, estimates and assumptions made are believed
to be reasonable based on the most current set of circumstances
available to management. Actual results may differ from the
judgments, estimates and assumptions.
Significant judgments, estimates and assumptions made by
management in the preparation of these financial statements
are outlined below:
4.1 Critical judgments in applying accounting policies
Research and development costs
The majority of Opthea’s expenditure is incurred as a result of
clinical trials for OPT‑302. During the years ended June 30, 2020
and 2021, Opthea progressed Phase 2b wet age‑related macular
degeneration (wet AMD) and Phase 1b/2a diabetic macular edema
(DME) trials. A key measure of Opthea’s performance is the level
of expenditure incurred on the research of OPT‑302.
42
Opthea Limited
Judgment is required in relation to:
/ The classification of expenses in the income statement
between research and development costs and operating
expenses; and
/ Whether costs relate to R&D, and consequently if they meet
the capitalization criteria under AASB 138 “Intangible Assets.”
The directors have determined that the Group is still in a research
phase and accordingly, no development costs have been capitalized
as of June 30, 2021 and 2020.
Taxation
Research and development tax incentive
The Research and Development (R&D) Tax Incentive Scheme is
an Australian Federal Government program under which eligible
companies can receive cash refunds of 43.5% of eligible R&D
expenditure. Judgments are required as to the R&D tax incentive
refundable offset eligibility in respect of:
/ The Group’s ability to make claims and its continued
compliance under the scheme;
/ R&D and other supporting costs previously approved
by Australian tax authorities;
/ Estimated amounts, timing and geographical location of future
costs related to the projects for which applications have been
approved to date; and
/ Assessment of whether expenditure on projects for which
approval has been given by Australian tax authorities relate
to Australian or overseas expenditure.
For the years ended June 30, 2021 and 2020, the Group has
recognized an R&D tax incentive receivable of $5 million and
$6 million respectively within the Consolidated Statement
of Financial Position, with a corresponding amount recognized
within income tax benefit within the Consolidated Statement
of Profit or Loss and Other Comprehensive Income.
The R&D tax incentive receivable as at June 30, 2021 and 2020 is
based on the legislation as currently enacted as at June 30, 2021
and 2020, respectively. Any proposed changes to the legislation,
such as rate changes to the eligibility requirements, may have a
retrospective impact if the legislation is passed, currently no such
legislative changes have occurred.
Investment tax credits such as the R&D tax incentive are
outside of the scope of AASB 112 “Income Taxes” and AASB 120
“Accounting for Government Grants and Disclosure of
Government Assistance.” Based on the guidance in AASB 108
“Accounting Policies, Changes in Accounting Estimates and
Errors,” companies need to make an accounting policy choice
on how to present these incentives, which in practice is
Notes to the Consolidated Financial Statements (Cont.)
4 . C R I T I C A L A C C O U N T I N G J U D G M E N T S
A N D K E Y S O U R C E S O F E S T I M A T I O N U N C E R T A I N T Y (CONT.)
done by either analogizing with AASB 112 or with AASB 120.
In the Group’s opinion, the R&D tax incentive should be presented
by analogizing to AASB 112 because the nature of the incentive is
considered to be more closely aligned to income taxes, based
on the following considerations:
/ The R&D tax incentive is considered an income tax offset
which will be offset against the Group’s tax obligation if and
when the Group returns to a net tax payable position. In addition,
whilst the Group is currently eligible to receive cash payments
under the scheme since its consolidated revenue is currently
below $20 million, if and when the Group generates revenue
in excess of $20 million the R&D tax incentive will become
non‑refundable and can only be offset against any future
income tax payable by the Group.
/ The ATO, which is the tax authority in Australia, manages
the annual claims process as the R&D tax incentive is included
in the Group’s annual income tax return.
/ The ATO is also responsible for making the R&D tax
incentive cash payment if a company is eligible for a cash
refund under the program, oversees compliance with the
requirements of the R&D tax incentive scheme and
performs pre‑issuance reviews.
Income tax
The Group’s accounting policy for taxation requires judgments
as to the differences between tax and accounting treatments
of income and costs recognized in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income. Judgment is
also required in assessing whether deferred tax assets and
liabilities are recognized in the statement of financial position
and if accumulated income tax losses can be used to offset
potential future tax profits.
Functional currency
Effective January 1, 2021 the Group’s functional and presentation
currency changed from Australian dollars to U.S. dollars as
disclosed in Note 3.
The Group’s assets, liabilities and equity which were previously
denominated in Australian dollars were translated into U.S. dollars
on the date the functional currency changed.
Significant judgment is required in determining the currency of
the primary economic environment in which the Group operates,
which requires an evaluation of various indicators related to the
Group’s underlying transactions, events and conditions as they
relate to generating and expending cash.
4.2 Key sources of estimation uncertainty
Share‑based payment transactions
The Group measures the cost of equity‑settled transactions
with employees by reference to the fair value of the equity
instruments at the date at which they are granted. Fair values
are determined internally using Binomial models. The related
assumptions are detailed in note 31. The accounting estimates
and assumptions relating to equity‑settled share‑based payments
have no impact on the carrying amounts of assets and liabilities
in future reporting periods but may impact expenses and equity.
Should one or more of the assumptions and estimates used in
estimating the fair value of share‑based payments change, this
could have a material impact on the amounts recognized in
equity and employee‑related expenses.
5 . A P P L I C A T I O N O F N E W A N D
R E V I S E D A C C O U N T I N G S T A N D A R D S
New and amended Accounting Standards
that are effective for the current year
The Group has adopted all of the new and revised Standards
and Interpretations issued by the Australian Accounting Standards
Board (the AASB) that are relevant to its operations and effective
for the current year.
New and revised Standards and amendments thereof and
Interpretations effective for the current year that are relevant
to the Group include:
/ AASB 2018‑7 Amendments to Australian Accounting Standards
– Definition of Material;
/ AASB 2019‑1 Amendments to Australian Accounting Standards
– References to the Conceptual Framework; and
/ AASB 2019‑5 Amendments to Australian Accounting Standards
– Disclosure of the Effect of New IFRS Standards Not Yet
Issued in Australia.
Other pronouncements adopted for the first
time in the current year
In the current year, the Group has applied a number of
amendments to Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards
Board (AASB) that are effective for an annual period that
begins on or after July 1, 2020. Their adoption has not had
any material impact on the disclosures or on the amounts
reported in these financial statements.
Annual Report 2020 – 2021
43
5 . A P P L I C A T I O N O F N E W A N D R E V I S E D A C C O U N T I N G S T A N D A R D S (CONT.)
New and revised Australian Accounting Standards and Interpretations on issue but not yet effective
At the date of authorization of the financial statements, the Group has not applied the following new and revised Australian Accounting
Standards, Interpretations and amendments that have been issued but are not yet effective:
Standard/amendment
AASB 2021‑5 Amendments to Australian Accounting Standards – Deferred Tax related to
Assets and Liabilities arising from a Single Transaction
AASB 2021‑2 Amendments to Australian Accounting Standards – Disclosure of
Accounting Policies and Definition of Accounting Estimates.
AASB 2015‑10 Amendments to Australian Accounting Standards – Effective Date of
Amendments to AASB 10 and AASB 128 and AASB 2017‑5 Amendments to Australian
Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128
and Editorial Corrections
AASB 2020‑1 Amendments to Australian Accounting Standards – Classification of Liabilities
as Current or Non‑Current
AASB 2020‑6 Amendments to Australian Accounting Standards – Classification of Liabilities
as Current or Non‑Current – Deferral of Effective date
AASB 2020‑3 Amendments to Australian Accounting Standards – Annual Improvements
2018‑2021 and Other Amendments
AASB 2021‑3 Amendments to Australian Accounting Standards – COVID‑19‑Related
Rent Concessions
Effective for annual reporting
periods beginning on or after
January 1, 2023
January 1, 2023
January 1, 2022
(Editorial corrections in AASB 2017‑5
apply from January 1, 2018)
January 1, 2023
January 1, 2023
January 1, 2023
June 1, 2021
In addition, at the date of authorization of the financial statements the following IASB Standards and IFRS Interpretations
Committee Interpretations were on issue but not yet effective, but for which Australian equivalent Standards and Interpretations
have not yet been issued:
The new and revised Accounting Standards, Interpretations and amendments listed above are not expected to have a material impact
on the amounts recognized or disclosures included in the Group’s financial statements.
44
Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 6 . S E G M E N T I N F O R M A T I O N
The Group operates in one industry and one geographical area, those being the biotechnology and healthcare industry and Australia
(as the U.S subsidiary was only incorporated in May 2021 and currently has no transactions or contracts with customers), respectively.
The Group is focused primarily on developing a novel therapy for the treatment of highly prevalent and progressive retinal diseases.
The chief executive officer regularly reviews entity wide information that is compliant with Australian Accounting Standards.
There is only one segment for segment reporting purposes, and the information reviewed by the chief executive officer for the purpose
of resources allocation and performance assessment is the same as the information presented in the consolidated financial statements.
The Group’s only revenue stream in the current financial year is royalty income generated from licenses granted in respect of the
Group’s intellectual property that are unrelated to the Group’s core business and the development of OPT‑302 and that are not under
development. These licenses are primarily used by third‑party licensees for research purposes. All of the royalty income of $68,613
(2020: $59,061) was generated from customers based outside Australia. The Group does not have any major customers. All property,
plant and equipment are located in Australia.
7 . R E V E N U E
Sales based royalties
Total revenue
8 . O T H E R I N C O M E
Finance income
Grant income
Total other income
9 . R E S E A R C H A N D D E V E L O P M E N T E X P E N S E S
Research project costs 1
Total research and development expenses
1 The research project costs relate to the research programs in respect to the treatment of eye diseases by OPT‑302.
2021
US$
68,613
68,613
Restated
2020
US$
59,061
59,061
2021
US$
372,001
26,950
398,951
Restated
2020
US$
480,453
41,629
522,082
2021
US$
Restated
2020
US$
25,891,851
12,064,008
25,891,851
12,064,008
Annual Report 2020 – 2021
45
1 0 . E X P E N S E S
(a) Administrative expenses
Employee benefits expenses:
Salaries and fees
Cash bonuses
Superannuation
Share‑based payments expense
Total employee benefits expense
Other expenses:
Insurance
Investor relations costs
Audit and accounting
Travel expenses
Payroll tax
Legal fees
Advisory fees
Consultancy costs
Other expenses
Total other expenses
Depreciation of:
Equipment and furniture
Leasehold improvements
Right‑of‑use asset
Total depreciation expense
Loss on disposal of non‑current assets
2021
US$
Restated
2020
US$
1,794,840
1,424,237
479,501
188,543
3,897,638
193,588
141,019
732,688
6,360,522
2,491,532
4,419,433
285,071
647,549
1,459
18,766
83,605
393,843
367,070
714,328
335,786
254,212
221,410
44,521
134,845
372,431
416,082
–
334,262
6,931,124
2,113,549
15,012
–
91,656
106,668
14,581
344
81,611
96,536
1,434
1,243
Total administrative expenses
13,399,748
4,702,860
(b) Occupancy expenses
Short term and low value lease expenses
Lease incidental costs
Total occupancy expense
46
Opthea Limited
–
18,445
18,445
1,539
21,733
23,272
Notes to the Consolidated Financial Statements (Cont.) 1 1 . N E T F O R E I G N E X C H A N G E ( L O S S ) / G A I N
Net foreign exchange (losses)/gains
2021
US$
Restated
2020
US$
(11,011,961)
(265,989)
(11,011,961)
(265,989)
Exchange differences arising on the translation of monetary items are recognized in the Statement Profit and Loss and other
Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment hedge. After the Company’s
US IPO where the Company raised US$128 million, the Company entered into an Australian dollar denominated term deposit worth
US$100 million (A$141.9 million), that matured on February 3, 2021. The Company simultaneously entered into a foreign currency
exchange contract under which the term deposit converted back to US dollars at effectively the same foreign exchange rate as when
the term deposit was entered into. As the Group’s functional currency was the Australian dollar (A$) until December 31, 2020, the Group
recorded a foreign exchange loss of US$9m in relation to this transaction.
1 2 . I N C O M E T A X
(a) Income tax benefit
The major components of income tax benefit are:
Statement of Profit or Loss and Other Comprehensive Income
Current tax
Current income tax credit
Deferred tax
In respect of the current year
2021
US$
Restated
2020
US$
4,938,846
5,708,767
4,938,846
5,708,767
–
–
Total income tax benefit recognized in the Statement of Comprehensive Income
4,938,846
5,708,767
(b) Current tax receivable
Research and Development Tax Incentive Credit receivable
4,972,898
5,868,152
Annual Report 2020 – 2021
47
1 2 . I N C O M E T A X (CONT.)
(c) Numerical reconciliation between aggregate income tax benefit recognized in the Statement of Profit
of Loss and Other Comprehensive Income and benefit calculated per the statutory income tax rate
A reconciliation between income tax benefit and the product of accounting loss before income tax multiplied by the Group’s
applicable income tax rate is as follows:
Accounting loss before tax
At the Company’s statutory income tax rate of 30% (2020; 27.5%)
R&D tax incentive on eligible expenses
Non‑deductible R&D expenditure
Other non‑deductible expenses – share‑based payment expense
Amount of temporary differences and carried forward tax losses not recognized
2021
US$
Restated
2020
US$
(50,283,342)
(16,831,966)
15,085,003
4,628,791
4,938,846
5,708,767
(3,420,951)
(3,624,766)
(1,169,291)
(201,489)
(10,494,761)
(802,536)
Income tax benefit reported in the Statement of Profit or Loss and Other Comprehensive Income
4,938,846
5,708,767
(d) Recognized deferred tax assets and liabilities in statement of financial position
Deferred income tax at June 30 relates to the following:
Deferred tax liabilities:
Interest and royalty income receivable (future assessable income)
Deferred tax assets related to temporary differences:
Recognition of tax losses
Accrued expenses and other liabilities
Employee provisions
Other miscellaneous items
Less: temporary differences not recognized
Net deferred tax recognized in the statement of financial position
(2,344,514)
(70,925)
(2,344,514)
(70,925)
1,508,764
205,458
152,675
477,617
2,344,514
–
–
303,383
128,812
430,839
863,034
(792,109)
–
(e) Unrecognized temporary differences
Temporary differences with respect to deferred tax assets associated with intellectual property and other miscellaneous items
which have a low probability of realization are unrecognized. These amounted to nil at year end (2020: $792,109).
(f) Carry forward unrecognized tax losses
The Group had income tax losses of $20,846,641 and capital losses of $672,934 at year end (2020: income tax losses of $14,378,726
and capital losses of $672,934) for which no deferred tax asset is recognized on the statement of financial position as they are currently
not considered probable of realization. These tax losses are available indefinitely for offset against future assessable income subject
to continuing to meet relevant statutory tests.
48
Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 1 2 . I N C O M E T A X (CONT.)
(g) Franking credit balance
The franking account balance at the end of the financial year at 30% is A$227,371 (2020: A$227,371), which represents the amount
of franking credits available for the subsequent financial year and is not recognized in the financial statements.
1 3 . E A R N I N G S P E R S H A R E
The following reflects the income used in the basic and diluted earnings per share computations:
(a) Earnings used in calculating earnings per share
Net loss attributable to ordinary equity holders of the parent
(b) Weighted average number of shares
2021
US$
Restated
2020
US$
(45,344,496)
(11,123,199)
Weighted average number of ordinary shares on issue for basic earnings per share
320,432,814
260,795,745
Effect of dilution:
Share options
–
–
Weighted average number of ordinary shares adjusted for the effect of dilution
320,432,814 260,795,745
Loss per share (basic and diluted in cents)
(14.15)
(4.27)
There have been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of
ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of this financial report.
Diluted earnings per share is calculated as net loss divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares. Options granted under the Long Term Incentive (LTIP) and Non‑Executive Director Share and Option (NED Plan)
plans would generally be included in the calculation due to the conditions of the issuance being satisfied. As the Group is in a loss
position, the options are anti‑dilutive and, accordingly, the basic loss per share is the same as the diluted loss per share.
A total number of 16,644,000 options outstanding June 30, 2021 were anti‑dilutive and were therefore excluded from the weighted
average number of ordinary shares for the purpose of diluted earnings per share. These options related to the following option plans:
NED Plan
LTIP
As at June 30, 2021, 11,394,000 outstanding options were exercisable as of that date (2020: 18,044,000).
2021
No.
2020
No.
10,000,000
6,000,000
6,644,000
12,044,000
16,644,000
18,044,000
Annual Report 2020 – 2021
49
1 4 . C U R R E N T A S S E T S – C A S H A N D C A S H E Q U I V A L E N T S
Cash at bank and in hand
Short‑term deposits
Total cash and cash equivalents
2021
US$
Restated
2020
US$
15,538,510
2,077,089
102,654,667
40,573,769
118,193,177
42,650,858
Cash at bank earns interest at floating rates based on daily bank deposit rates. The carrying amounts of cash and cash equivalents
represent fair value.
Short term‑deposits are with two major Australian banks and are made for varying periods of between 30 and 90 days, depending
on the immediate cash requirements of the Group, and earn interest at a fixed rate for the respective short‑term deposit periods.
At year end, the average rate was 0.24% (2020: 1.01%).
1 5 . C U R R E N T A S S E T S – R E C E I V A B L E S
Interest receivable
GST receivable 1
Other receivable 1
Total current receivables
2021
US$
37,905
136,239
391,142
Restated
2020
US$
56,032
105,124
34,417
565,286
195,573
1 The GST and other receivables are non‑interest bearing. There were no receivables with a material expected credit loss recorded during the financial
year (2020: nil).
1 6 . C U R R E N T A S S E T S – P R E P A Y M E N T S
R&D Contract Research Organization
Insurance
Other prepayments
Total current prepayments
2021
US$
12,551,398
1,820,059
14,698
14,386,155
Restated
2020
US$
–
320,521
8,630
329,151
The R&D Contract Research Organization prepayment consists of prepayments on the Phase 3 clinical trial for OPT‑302 in order to secure sites across
the world and start patient recruitment. These prepayments covered the initial start up of the Phase 3 clinical trials and are expected to be consumed
within the next 12 months. The Insurance amount relates to specific Phase 3 Clinical trial insurance in place for various sites around the world covering
periods to 2024. The non‑current portion of the prepayments are recorded as non‑current assets. Refer Note 19.
50 Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 1 7 . N O N ‑ C U R R E N T A S S E T S – I N V E S T M E N T S I N F I N A N C I A L A S S E T S
Listed Australian shares – at fair value 1
Details of listed Australian shares
Listed investments
2021
Non‑current investments:
Optiscan Imaging Limited
Total listed investments
2020 (Restated)
Non‑current investments:
Antisense Therapeutics Ltd
Optiscan Imaging Limited
Total listed investments
2021
US$
–
Restated
2020
US$
199,417
Ownership
interest
Fair
value at
June 302
Exchange
on
translation
Disposal
in the
financial
year3
Fair value
gain/(loss)
recognized
in OCI4
Opening
fair value
–
–
–
–
–
1.73%
199,417
199,417
–
–
(669,184)
(669,184)
469,767
469,767
199,417
199,417
(7,783)
(335,746)
174,196
(15,852)
–
(133,098)
(23,635)
(335,746)
41,098
169,333
348,367
517,700
1 These financial assets are investments in equity instruments and are not held for trading, they are held for medium to long‑term strategic purposes.
Accordingly, the Group has elected to designate these investments in equity instruments as at FVTOCI as recognizing short‑term fluctuations in these
investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long‑term purposes and
realizing their performance potential in the long run.
2 The fair value represents the share (bid) price at year end and does not include any capital gains tax or selling costs that may be applicable on the
disposal of these investments. These non‑current investments in listed shares consist of investments in ordinary shares, and therefore have no fixed
maturity date or coupon rate.
3 During the year ended June 30, 2021, the Group’s investment in Optiscan Imaging Limited (OIL) was sold for net proceeds of $669,184. The increase in
fair value during the year of $469,767 was recognized in other comprehensive income. The fair value of the investment in OIL at the disposal date was
US$669,184. The Group disposed of the investment in line with its Treasury and Investment Policy.
During the year ended June 30, 2020, the Group disposed of its remaining investment in ANP for net proceeds of $335,746. The increase in fair
value during the year of $174,196 was recognized in other comprehensive income. In accordance with the Group’s accounting policy, the gain remains
within the fair value of investments reserve. The fair value of the investment in ANP at the disposal date was $335,746. The Group disposed of the
investment in line with its Treasury and Investments Policy.
4 A fair value increase of $469,767 (2020: $41,098) in the carrying value of investments has been made through other comprehensive income in
the year due to a net increase in their market value in the year.
Annual Report 2020 – 2021
51
1 8 . R I G H T ‑ O F ‑ U S E A S S E T S
Right‑of‑use asset
The Group has a three‑year lease contract for its head office premises in Melbourne, Australia which commenced on July 15, 2019.
The agreement does not contain any extension options. The carrying amount of the lease at June 30, 2021 and 2020 is as follows:
Right‑of‑Use Asset Cost
Opening balance as at July 1
Additions
Exchange on translation
Right‑of‑Use Asset Depreciation
Opening balance as at July 1
Charge for the period
Exchange on translation
Net carrying amount at June 30
Lease liabilities
Lease liabilities are as indicated below.
2021
US$
Restated
2020
US$
251,189
–
–
251,189
30,365
281,554
–
251,189
(83,729)
(91,656)
(12,317)
(187,702)
93,852
–
(81,611)
(2,118)
(83,729)
167,460
At the commencement date of the lease of its office premises, the Group recognizes lease liabilities measured at the present value
of lease payments to be made over the lease term ending on July 14, 2022, using an incremental borrowing rate of 3%.
Carrying amount at July 1
New lease
Payments
Carrying amount at June 30
Maturity analysis:
Year 1
Year 2
Less: unearned interest
Analyzed into:
Current portion
Non‑current portion
52
Opthea Limited
2021
US$
182,290
–
(69,325)
112,965
124,495
–
124,495
(11,530)
112,965
Restated
2020
US$
–
251,189
(68,899)
182,290
105,026
87,827
192,853
(10,563)
182,290
112,965
–
99,745
82,545
112,965
182,290
Notes to the Consolidated Financial Statements (Cont.)
1 8 . R I G H T ‑ O F ‑ U S E A S S E T S (CONT.)
Amounts recognized in profit or loss:
Depreciation expense on right‑of‑use asset
Lease finance costs
Expense relating to leases of low value assets
2021
US$
Restated
2020
US$
91,656
5,782
7,042
104,480
83,729
5,148
6,497
95,374
The Group did not have any short‑term leases during the year ended June 30, 2021 and 2020. The above amounts are recorded in
Administrative expenses.
1 9 . N O N ‑ C U R R E N T A S S E T S – P R E P A Y M E N T S
Insurance
Total non‑current prepayments
2021
US$
174,541
174,541
Restated
2020
US$
–
–
The non‑current prepayment amount relates to specific Phase 3 Clinical trial insurance in place for various sites around the world
covering periods to 2024.
2 0 . C U R R E N T L I A B I L I T I E S – P A Y A B L E S
Creditors (unsecured) 1
Pay as You Go (PAYG) tax liability
Total current payables
1 Creditors are non‑interest bearing and are normally settled on 30 day terms.
2 1 . C U R R E N T L I A B I L I T I E S – P R O V I S I O N S
Annual leave
Long service leave
Total current provisions
2021
US$
Restated
2020
US$
2,417,719
4,014,818
83,799
39,143
2,501,518
4,053,961
2021
US$
289,043
202,959
492,002
Restated
2020
US$
277,469
163,296
440,765
Annual Report 2020 – 2021
53
2 2 . N O N ‑ C U R R E N T L I A B I L I T I E S – P R O V I S I O N S
Long service leave
2 3 . C O N T R I B U T E D E Q U I T Y
(a) Ordinary shares
Issued and fully paid at June 30
Movement in ordinary shares:
Opening balance
Issue of shares in a private placement
Issue of shares on exercise of options granted under the LTIP
Issue of shares on NASDAQ listing net of issuance cost $10,126,959
Issue of shares on exercise of warrants net of issuance cost $1,099,412
Transfer from option reserve
Ordinary shares on issue:
Opening balance
Issue of shares in a private placement
Issue of shares on exercise of options granted under the LTIP
Issue of shares on NASDAQ listing
Issue of shares on exercise of pre‑funded warrants
2021
US$
Restated
2020
US$
16,915
27,643
2021
US$
Restated
2020
US$
234,147,526
113,852,364
113,852,364
80,331,016
–
–
33,236,520
284,828
105,477,591
11,546,029
3,271,542
–
–
–
234,147,526
113,852,364
No:
No:
269,157,769
249,414,839
–
18,867,930
5,845,804
875,000
68,506,400
7,493,568
–
–
351,003,541
269,157,769
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Issued capital at June 30, 2021 amounted to $234,147,526 (351,003,541 fully paid ordinary shares) net of share issue costs and tax.
During the year ended June 30, 2021 the Company issued 68,506,400 ordinary shares on NASDAQ listing for net proceeds of $105,477,591
as well as issued 7,493,568 pre‑funded warrants for net proceeds of $11,546,029.
At June 30, 2021, the company had 6,750,000 Non‑Executive Director options remain unexercised with expiry of November 2022 for
1,500,000, October 2023 for 3,000,000 options and January 2024 for 2,250,000 options.
54
Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 2 3 . C O N T R I B U T E D E Q U I T Y (CONT.)
Options granted to directors and employees
The company has two share‑based payment schemes, the Long Term Incentive Plan (LTIP) and Non‑Executive Director Share and
Option Plan. Options to subscribe for the Company’s shares have been granted under these plans to certain employees and directors.
The company granted 7,000,000 options over ordinary shares under these plans during the year ended June 30, 2021 (note 31).
These options had a weighted average fair value at their grant date of $1.03 per option. During June 30, 2021 8,400,000 options
granted under the LTIP and NED Plan were exercised for $3,271,542. No options were granted under the Plans during the year
ended June 30, 2020.
(b) Pre‑funded warrants
Movement in pre‑funded warrants:
Opening balance
Issue of pre‑funded warrants in a US Initial public offering
Cost of issue of pre‑funded warrants
Issue of shares on exercise of pre‑funded warrants
Pre‑funded warrants on issue:
Opening balance
Issue of pre‑funded warrants in a US Initial public offering
Exercise of pre‑funded warrants
Forfeiture on exercise
2021
US$
Restated
2020
US$
–
12,645,441
(1,099,412)
(11,546,029)
–
No:
–
7,493,600
(7,493,568)
(32)
–
–
–
–
–
–
No:
–
–
–
–
–
The Company issued 7,493,600 pre‑funded warrants for US$11,546,029 net of issue costs in respect of the US initial public offering.
The pre‑funded warrants were unquoted, having no voting or dividend rights and are exercisable to ADS’s at an exercise price of
US$0.00001 per pre‑funded warrant on a one for one basis with no expiry date. During the year all pre‑funded warrants were exercised,
converting to ADS’s.
(c) Capital management
The Group is not subject to any externally imposed capital requirements. When managing share capital, management’s objective
is to ensure the entity continues as a going concern as well as to provide benefits to shareholders and for other stakeholders. In order
to maintain or achieve an appropriate capital structure, the Company may issue new shares or reduce its share capital, subject to the
provisions of the Company’s constitution. The Group only commits to significant R&D expenditure when this is fully funded either
by existing funds or further equity raises.
Annual Report 2020 – 2021
55
2 4 . A C C U M U L A T E D L O S S E S A N D R E S E R V E S
(a) Movements in accumulated losses were as follows:
Balance at July 1
Net loss for the period
Balance at June 30
(b) R eserves
Fair value of investments reserve (i)
Share‑based payments reserve (ii)
Foreign translation reserve (iii)
Total reserves
(i) Movement in fair value of investments reserve:
Opening balance
Fair value gains on investments in financial assets
Exchange on translation
Closing balance
(ii) Movement in share‑based payments reserve:
Opening balance
Share‑based payments expense
Exercise of options
Exchange on translation
Closing balance
(iii) Movement in Foreign translation reserve:
Opening balance
Gain/loss on translation
Closing balance
(c) Nature and purpose of reserves
Fair value of investments reserve
This reserve records fair value changes on listed investments.
Share‑based payment reserve
2021
US$
Restated
2020
US$
(78,779,486)
(67,656,287)
(45,344,496)
(11,123,199)
(124,123,982) (78,779,486)
1,085,411
551,409
4,087,650
3,116,080
20,089,163
5,827,605
25,262,224
9,495,094
551,409
469,767
64,235
517,700
41,098
(7,389)
1,085,411
551,409
3,116,080
2,401,769
3,897,638
732,688
(3,271,542)
(284,828)
345,474
266,451
4,087,650
3,116,080
5,827,605
6,257,941
14,261,558
(430,336)
20,089,163
5,827,605
This reserve is used to record the value of equity benefits provided to executives and employees as part of their remuneration.
Foreign currency translation reserve
The reserve records the value of foreign currency movements on translation of financial statements from A$ to US$.
56 Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 2 5 . F I N A N C I A L R I S K M A N A G E M E N T O B J E C T I V E S A N D P O L I C I E S
The Group’s principal financial assets comprise cash, receivables, short‑term deposits and investments in listed shares.
The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance with the Group’s
financial risk management practices. The objective is to support the delivery of the Group’s financial targets whilst protecting
future financial security.
The Group’s other various financial assets and liabilities, such as receivables and payables, arise directly from its operations.
The main risks arising from the Group’s financial assets and liabilities are interest rate risk, foreign currency risk, equity securities
price risk and liquidity risk.
The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring
levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rates and foreign
exchange rates. Liquidity risk is monitored through future rolling cash flow forecasts.
The board reviews and agrees policies for managing each of these risks as summarized below.
Risk exposures and responses
The Group has investigated the main financial risk areas which could impact on its financial assets and determined the impact
on post tax (losses) or profits for a range of sensitivities. These can be seen in the post tax (loss)/profit impact for each risk area.
For each risk area, the equity impact relates solely to reserve movements and excludes movements in accumulated losses as the
impact of these can be seen within the post tax (loss)/profit impact.
(i) Interest rate risk
The Group’s exposure to market interest rates relates primarily to the short‑term deposits. The deposits are held with two of Australia’s
largest banks.
The objective of managing interest rate risk is to minimize the Group’s exposure to fluctuations in interest rates that might impact
its interest income and cash flow. To manage interest rate risk, the Group invests the majority of its cash in short‑term deposits
for varying periods of between 30 days and 90 days, depending on the short and long‑term cash requirements of the Group which
is determined based on the Group’s cash flow forecast. This consideration also takes into account the costs associated with recalling
a term deposit should early access to cash and cash equivalents be required. Cash is not locked into long‑term deposits at fixed rates
so as to mitigate the risk of earning interest below the current floating rate.
The Group does not have any borrowings (2020: nil).
The following sensitivity analysis (an annual effect) is based on the interest rate risk exposures at June 30, 2021 and 2020.
Annual Report 2020 – 2021
57
2 5 . F I N A N C I A L R I S K M A N A G E M E N T O B J E C T I V E S A N D P O L I C I E S (CONT.)
At June 30, 2021, if interest rates moved, with all variables held constant, post tax (loss)/profit and equity would have been affected
as illustrated in the following table:
Judgments of reasonably possible movements
+ 0.50% (50 basis points) (2020: + 0.50%)
– 0.50% (50 basis points) (2020: – 0.50%)
Post tax
(loss)/profit impact
2021
US$
Restated
2020
US$
359,442
137,676
(359,442)
(137,676)
The post tax figures include an offset for unrecognized tax losses (bringing the tax effect to nil) for the year ended June 30, 2021
(2020: nil).
Significant assumptions used in the interest rate sensitivity analysis include:
/ The reasonably possible movement of 0.5% was calculated by taking the interest rates as at balance date, moving these
by plus and minus 0.5% and then re‑calculating the interest on term deposits with the ‘new‑interest‑rate’.
/ The net exposure at balance date is representative of what the Group was and is expecting to be exposed to in the next
twelve months from balance date.
(ii) Price risk
The Group’s investment in listed shares is exposed to equity securities price risk and as such their fair values are exposed to fluctuations
as a result of changes in market prices.
Equity price risk is the risk that the fair value of equities will decrease as a result of share price movements. The Group’s equity
investments are publicly traded on the ASX and are designated and accounted for as investments in financial assets.
The investments in listed shares are not held for short‑term trading. Their values are reviewed regularly by management and the
board. The strategy for realizing any part of these investments is determined based on the liquidity of the respective stocks, potential
off‑market acquirers and likely developments in their values based on publicly available information.
At June 30, 2021 and 2020, had the share price moved with all other variables held constant, post tax (loss)/profit and equity would have
been affected as illustrated in the table below:
Judgments of reasonably possible movements
Change in variables
10% increase in listed share price
10% decrease in listed share price
Impact
of loss
Impact
on equity
2021
US$
2021
US$
Impact
of loss
Restated
2020
US$
Impact
on equity
Restated
2020
US$
–
–
–
–
13,450
(13,450)
13,450
(13,450)
58
Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 2 5 . F I N A N C I A L R I S K M A N A G E M E N T O B J E C T I V E S A N D P O L I C I E S (CONT.)
(iii) Foreign currency risk
As a result of services provided by non‑related entities in the United States, Canada, United Kingdom and Europe, part of the
Group’s monetary assets and liabilities are affected by movements in the exchange rate.
The Group does not enter into any hedging transactions.
At the reporting date, the Group has the following exposure to foreign currencies. The functional currency of the Group changed during
the year ended June 30, 2021. Accordingly, the 2021 table illustrates the Group’s exposure to Australian dollars and the 2020 table
illustrates the Group’s exposure to US dollars:
2021
Financial assets
Cash
Receivables
Financial liabilities
Payables
Other financial liabilities
Net exposure
2020 Restated
Financial assets
Cash
Receivables
Financial liabilities
Payables
Other financial liabilities
Net exposure
AUD
2021
US$
35,646,457
5,513,541
Consolidated
EURO
2021
US$
–
–
(1,276,164)
(41,872)
–
–
39,883,834
(41,872)
Consolidated
USD
2020
US$
42,417
25,821
EURO
2020
US$
–
–
GBP
2021
US$
–
–
–
–
–
GBP
2020
US$
–
–
(3,355,050)
(10,238)
(23,481)
(163,547)
–
–
(3,450,359)
(10,238)
(23,481)
CAD
2021
US$
–
–
(1,290)
–
(1,290)
CAD
2020
US$
–
–
–
–
–
The following sensitivity is based on the foreign currency risk exposures in existence at June 30, 2021 and 2020.
Annual Report 2020 – 2021
59
2 5 . F I N A N C I A L R I S K M A N A G E M E N T O B J E C T I V E S A N D P O L I C I E S (CONT.)
At June 30, 2021 and 2020, had the United States dollar (2020: Australian dollar) moved with all other variables held constant, post tax
(loss) profit and equity would have been affected as illustrated in the table below:
Judgments of reasonably possible movements
Consolidated
AUD/USD +10% (2020: +10%)
AUD/USD –10% (2020: ‑10%)
Post tax
(loss)/profit impact
2021
US$
Restated
2020
US$
(2,538,062)
219,569
3,102,076
(268,361)
The reasonably possible movements at June 30, 2021 are higher than at June 30, 2020 due mainly to the higher net exposure to the
Australian dollar due to significant cash at bank deposits. There was minimum or insignificant exposure to the GBP, Euro and CAD during
the current financial year.
Significant assumptions used in the foreign currency exposure sensitivity analysis include:
The reasonably possible movement of 10% was calculated by taking the currency spot rates as at balance date, moving these by
10% and then re‑converting the currencies into US with the ‘new‑spot‑rate’. This methodology reflects the translation methodology
undertaken by the Group.
The net exposure at balance date is representative of what the Group was and is expecting to be exposed to in the next twelve
months from balance date.
Management believes the balance date risk exposures are representative of the risk exposure inherent in the financial instruments.
(iv) Credit risk
Credit risk is associated with those financial assets of the Group which comprise cash and cash equivalents, receivables and listed
investments. The Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying
amount of these investments. Credit risk is considered minimal as the Group transacts with reputable recognized Australian banks.
(v) Liquidity risk
Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to meet their obligations to repay
their financial liabilities as and when they fall due. The Group has minimal liquidity risk because of the high balances of cash and cash
equivalents; however the Group manages liquidity risk by maintaining adequate reserves and by monitoring forecast and actual cash
flows and by matching the maturity profiles of financial assets and liabilities. The financial liabilities of the Group relate to trade payables
that are all expected to be paid within 12 months.
The Group’s objective is to maintain an appropriate cash asset balance to fund its operations.
60 Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 2 5 . F I N A N C I A L R I S K M A N A G E M E N T O B J E C T I V E S A N D P O L I C I E S (CONT.)
(vi) Fair value
The Group has investments in listed equities which are calculated using the quoted prices in an active market and are considered level 1
fair value measurements. The Group does not have any derivative investments where the fair value is estimated using inputs other than
quoted prices that are observable for the asset or liability, either directly (as prices) or indirectly (i.e. derived from prices). The Group also
does not hold any financial instruments where fair value measurement uses observable inputs that require significant adjustments based
on observable inputs to estimate its value.
Details of the fair value of the investment in financial assets are disclosed in note 17 of the financial statements.
The fair value of financial assets and financial liabilities in the consolidated statement of financial position at June 30, 2021 and 2020
is the same as their carrying amounts.
The methods for estimating fair value are also outlined in the relevant notes to the financial statements.
2 6 . R E L A T E D P A R T Y D I S C L O S U R E S
(a) S ubsidiaries
The consolidated financial statements include the financial statements of Opthea Limited and its subsidiaries in the following table:
Name of company
Vegenics Pty Ltd 1
Opthea US Inc2
Parent entity
% equity interest
2021
%
100
100
2020
%
100
–
1 Opthea Limited is the ultimate parent entity. Vegenics Pty Ltd is incorporated in Australia and has the same financial year as Opthea Limited.
2 Opthea Limited is the ultimate parent entity. Opthea US Inc was incorporated in the United States in May 2021 and has the same financial year
as Opthea Limited.
(b) Transactions with related parties
Balances and transactions between the Company and its subsidiaries, a related party of the Company, have been eliminated on
consolidation and are not disclosed in this note.
Annual Report 2020 – 2021
61
2 7 . C A S H F L O W S T A T E M E N T R E C O N C I L I A T I O N
(a) Reconciliation to cash at the end of the year
Cash at bank and in hand (note 14)
(b) Reconciliation of net loss after tax to net cash flows from operations
Net loss for the year
Adjustments for:
Income tax benefit recognized in profit or loss
Depreciation of non‑current assets
Depreciation of right‑of‑use asset
Share‑based payments
Net exchange differences
Changes in:
Payables
Receivables
Prepayments
Provisions
Net cash flows used in operating activities before tax
R&D tax incentive received
Net cash flows used in operating activities
(c) Reconciliation of borrowings arising from financing activities
Balance at July 1
Non‑cash addition1
Payment of lease liabilities
Exchange on translation
Balance at June 30
2021
US$
Restated
2020
US$
118,193,177
42,650,858
118,193,177
42,650,858
(45,344,496)
(11,123,199)
(4,938,846)
(5,708,767)
15,012
91,656
3,897,638
11,011,961
14,926
81,611
732,688
265,989
10,077,421
(4,613,553)
(1,552,443)
(125,492)
(369,712)
12,127
(14,231,546)
(30,994)
40,510
72,794
(51,380,266)
(15,808,317)
5,834,099
10,118,697
(45,546,167)
(5,689,620)
2021
US$
Restated
2020
US$
167,460
–
(87,373)
13,765
93,852
–
251,189
(66,781)
(16,948)
167,460
1 Non‑cash addition represents the new lease on the Company’s office premises in Melbourne, Australia that commenced on July 15, 2019.
62
Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 2 8 . C O M M I T M E N T S
(i) Lease commitments – Group as lessee
Lease commitments are in respect of low value leases which have not been recognized in the Statement of Financial Position.
These leases are expensed on a straight‑line basis over the term of the lease.
Within one year
After one year but not more than five years
2021
US$
5,304
8,398
13,702
Restated
2020
US$
4,497
11,619
16,116
(ii) Research projects and license commitments
The Group has entered into research and development contracts and intellectual property license agreements with various third parties
in respect of services for the Phase 3 DME clinical trial and the clinical grade manufacture of OPT‑302. Expenditure commitments relating to
these and intellectual property license agreements are payable as follows:
Within one year
After one year but not more than five years
After more than five years
2021
US$
Restated
2020
US$
26,377,778
7,660,325
2,347,060
–
293,815
75,000
28,724,838
8,029,140
Currently, the biggest Research contract has a 60 day termination clause and all commitments have been limited to a six month commitment.
Annual Report 2020 – 2021
63
2 9 . C O N T I N G E N C I E S
The Group is party to various research agreements with respect to which a commitment to pay is contingent on the achievement of
research milestones. Assuming all milestones are achieved within the time‑frames stipulated in the contracts, those which could become
payable in less than one year total $nil (2020: $263,241) and those which could become payable in more than one year total $11,548,205
(2020: $11,518,745).
Under these license/collaboration agreements, payments are to be made only if certain research and clinical development milestones
are achieved and royalties may become payable on any eventual sales of products developed under these agreements.
The group had a bank guarantee outstanding at June 30, 2021 in respect of a rental deposit for its office premises of $43,000
(2020: $39,391).
3 0 . K E Y M A N A G E M E N T P E R S O N N E L
(a) Compensation of Key Management Personnel
Short‑term employee benefits
Post‑employment benefits
Share‑based payments expense
Total compensation
2021
US$
Restated
2020
US$
1,099,081
680,954
79,550
3,897,638
64,632
420,751
5,076,269
1,166,337
Details of the key management personnel are included within the Remuneration Report section of the Directors’ Report.
(b) Other transactions and balances with director and key management personnel and their related parties
There were no director and key management personnel related party transactions during the current or prior financial year.
3 1 . S H A R E ‑ B A S E D P A Y M E N T S
(a) Recognized share based payment expenses
The expense recognized for share‑based payments during the year is shown in the table below:
2021
US$
Restated
2020
US$
Expense arising from equity‑settled share‑based payment transactions:
Director and employee services received
3,897,638
732,688
(b) Non‑executive director and employee share option plans
During the 2015 financial year, the Group introduced an ownership‑based compensation scheme for non‑executive directors, executives
and senior employees, the Long Term Incentive Plan (LTIP) and Non‑Executive Directors Share and Option Plan (NED Plan). In accordance
with the terms of the plans, as approved by shareholders at the 2014 annual general meeting, eligible non‑executive directors, executives
and senior employees with the Group may be granted options to purchase ordinary shares.
Each employee share option converts into one ordinary share of Opthea Limited on exercise. No amounts are paid or payable by the
recipient on receipt of the option. The options carry neither rights to dividends nor voting rights and are not transferable. Options may
be exercised at any time from the date of vesting to the date of their expiry.
64
Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 3 1 . S H A R E ‑ B A S E D P A Y M E N T S (CONT.)
The number of options granted is subject to approval by the board and rewards executives and senior employees to the extent of the
Group’s and the individual’s achievement judged against both qualitative and quantitative criteria as determined by the board on a case
by case basis.
The vesting condition of options granted under the LTIP and NED Plan is continuous service.
Options/Rights series
LTIP – director FY2016
Grant date
March 7, 2016
LTIP – director FY2019
November 29, 2018
LTIP – employees FY2016
March 31, 2016
LTIP – employees FY2018
August 23, 2017
LTIP – employees FY2019
NED Plan FY2016
NED Plan FY2019
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
April 3, 2019
March 7, 2016
November 29, 2018
October 12, 2020
October 12, 2020
October 12, 2020
October 12, 2020
October 12, 2020
October 12, 2020
October 12, 2020
October 12, 2020
January 19, 2021
January 19, 2021
January 19, 2021
January 19, 2021
Grant date
fair value
US$
$0.14
$0.15
$0.18.
$0.26
$0.18
$0.14
$0.15
$1.05
$1.05
$1.05
$1.05
$1.24
$1.24
$1.24
$1.24
$0.88
$0.88
$0.88
$0.88
Exercise
price
US$
$0.36
Expiry date
March 7, 2021
Vesting date
June 30, 2016
$0.625
November 29, 2022
November 29, 2019
$0.37
$0.92
$0.608
$0.36
January 1, 2022
January 1, 2023
April 3, 2023
March 7, 2021
January 1, 2017
June 30, 2018
April 3, 2021
June 30, 2016
$0.625
November 29, 2022
November 29, 2019
$3.24
$3.24
$3.24
$3.24
$2.16
$2.16
$2.16
$2.16
$1.56
$1.56
$1.56
$1.56
October 11, 2024
October 11, 2020
October 11, 2024
October 11, 2021
October 11, 2024
October 11, 2022
October 11, 2024
October 11, 2023
October 11, 2024
October 11, 2021
October 11, 2024
October 11, 2022
October 11, 2024
October 11, 2023
October 11, 2024
October 11, 2024
January 18, 2025
January 19, 2021
January 18, 2025
January 19, 2022
January 18, 2025
January 19, 2023
January 18, 2025
January 19, 2024
There has been no alteration of the terms and conditions of the above share‑based payment arrangements since the grant date.
Annual Report 2020 – 2021
65
3 1 . S H A R E ‑ B A S E D P A Y M E N T S (CONT.)
(c) Fair value of share options granted
Where relevant, the expected life used in the model has been adjusted based on management’s best estimate for the effects
of non‑transferability, exercise restrictions (including the probability of meeting market conditions attached to the option),
and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 4 or 5 years.
Grant
date
share
price
US$
$0.28
$0.42
$0.54
$0.34
$0.48
$0.28
$0.42
$2.19
$2.19
$1.56
Exercise
price
US$
Fair
value per
option
US$
Expected
volatility
Option
life
Dividend
yield
Risk free
interest
rate
$0.36
$0.625
$0.37
$0.92
$0.608
$0.36
$0.625
$2.16
$3.24
$1.56
$0.14
$0.15
$0.18
$0.26
$0.18
$0.14
$0.15
$1.24
$1.05
$0.88
65%
58%
65%
66%
57%
65%
58%
77.25%
77.25%
77.01%
5 years
4 years
5 years
5 years
4 years
5 years
4 years
4 years
4 years
4 years
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
2.09%
2.04%
2.09%
2.09%
2.04%
2.09%
2.04%
0.25%
0.25%
0.25%
Model
used
Binomial
Binomial
Binomial
Binomial
Binomial
Binomial
Binomial
Binomial
Binomial
Binomial
LTIP – director FY2016
LTIP – director FY2019
LTIP – employees FY2016
LTIP – employees FY2018
LTIP – employees FY2019
NED Plan FY2016
NED Plan FY2019
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
(d) Movements in share options during the year
The following reconciles the share options outstanding at the beginning and end of the year:
Balance at beginning of year
Granted during the year:
To employees and directors under the LTIP and NED Plan
Exercised during the year
Expired during the year
Balance at end of year
Exercisable at end of year
June 30, 2021
June 30, 2020
Weighted
average
exercise
price
US$
Number
of options
and rights
Weighted
average
exercise
price
US$
Number
of options
and rights
18,044,000
0.50
18,919,000
0.50
7,000,000
(8,400,000)
–
16,644,000
11,394,000
2.21
0.36
–
–
(875,000)
–
1.28
18,044,000
0.86
18,044,000
–
0.37
–
0.50
0.50
The share options outstanding at the end of the year had a weighted average exercise price of $0.86 (2020: $0.50) and a weighted
average remaining contractual life of 628 days (2020: 626 days).
66 Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 3 2 . N E T T A N G I B L E A S S E T B A C K I N G
Net tangible assets (including Right‑of‑use assets)
3 3 . A U D I T O R ’ S R E M U N E R A T I O N
The auditor of Opthea Limited is Deloitte Touche Tohmatsu.
2021
US$
0.39
Restated
2020
US$
0.17
2021
A$
2020
A$
Deloitte and related networks firms:
Audit or review of the financial report of the entity and any other entity in the consolidated group
408,660
615,000
Statutory assurance services required by legislation to be provided by the auditor
Other assurances and agreed‑upon procedures under other legislation or contractual arrangements
Other services:
– Tax compliance services
– Consulting services
– Other
–
45,000
–
–
–
–
–
–
–
–
453,660
615,000
3 4 . E V E N T S A F T E R T H E B A L A N C E S H E E T D A T E
No matters or circumstances have arisen since the end of the reporting period, which significantly affected, or may significantly affect,
the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.
Annual Report 2020 – 2021
67
3 5 . P A R E N T E N T I T Y I N F O R M A T I O N
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the
same as those applied in the consolidated financial statements. Refer to note 3 for significant accounting policies relating to the Group.
(a) Financial position
Current assets
Non‑current assets
Total assets
Current liabilities
Non‑current liabilities
Total liabilities
Net assets
Issued capital
Accumulated losses
Employee equity benefits reserve
Fair value of investments reserve
Foreign currency translation reserve
Total shareholders’ equity
(b) Financial performance
Loss of the parent entity
Other comprehensive income
Total comprehensive loss of the parent entity
2021
US$
Restated
2020
US$
138,331,255
48,912,774
117,110
392,445
138,448,365
49,305,219
(3,078,269)
(4,653,758)
(16,916)
(110,188)
(3,095,185)
(4,763,946)
135,353,180
44,541,273
234,147,526
113,852,364
(124,112,899)
(76,874,382)
4,087,650
1,085,411
3,116,081
551,409
20,145,492
3,895,801
135,353,180
44,541,273
Year ended
June 30,
2021
US$
Restated
Year ended
June 30,
2020
US$
(45,304,268)
(10,836,631)
469,767
41,098
(44,834,501)
(10,795,533)
(c) Parent entity contractual commitments for acquisition of property, plant and equipment
The parent entity does not have any contractual commitments for the acquisition of property, plant and equipment for the year
ended June 30, 2021 (2020: nil).
68
Opthea Limited
Notes to the Consolidated Financial Statements (Cont.) 3 5 . P A R E N T E N T I T Y I N F O R M A T I O N (CONT.)
(d) Parent entity contingent liabilities
The Company is party to various research agreements with respect to which a commitment to pay is contingent on the achievement
of research milestones. Assuming all milestones are achieved within the time‑frames stipulated in the contracts, those which could
become payable in less than one year total US$nil (2020: $263,241) and those which could become payable in more than one year
total $1,056,099 (2020: $1,026,640).
Under these license/collaboration agreements, payments are to be made only if certain research and clinical development milestones
are achieved and royalties may become payable on any eventual sales of products developed under these agreements.
The parent entity had a bank guarantee outstanding at June 30, 2021 in respect of a rental deposit for its office premises
of $43,000 (2020 $39,391.).
Annual Report 2020 – 2021
69
Directors’ Declaration
F O R T H E Y E A R E N D E D J U N E 3 0 , 2 0 2 1
In accordance with a resolution of the directors of Opthea Limited, we state that:
1. In the opinion of the directors:
(a) the financial report and the notes thereto are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at June 30, 2021 and of its performance for the year ended
on that date; and
(ii) complying with Australian Accounting Standards, Corporations Regulations 2001, and International Financial Reporting
Standards (IFRS) as disclosed in note 3 of the financial statements; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with section
295A of the Corporations Act 2001 for the financial year ended June 30, 2021.
Signed in accordance with a resolution of the directors made pursuant to S.295(5) of the Corporations Act 2001. On behalf of the
directors:
Megan Baldwin
CEO & Managing Director
Opthea Limited
Melbourne
August 30, 2021
Jeremy Levin
Chairman
Opthea Limited
70
Opthea Limited
Independent Auditor’s Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff
OOpptthheeaa LLiimmiitteedd
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
OOppiinniioonn
We have audited the financial report of Opthea Limited (“Opthea” or the “Company”) and its subsidiary (the
“Group”), which comprises the Consolidated Statement of Financial Position as at 30 June 2021, the Consolidated
Statement of Profit or Loss, the Consolidated Statement of Comprehensive Income, the Consolidated Statement
of Changes in Equity and the Consolidated Statement of Cash Flows for the year then ended, notes to the financial
statements including a summary of significant accounting policies and the directors’ declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
BBaassiiss ffoorr OOppiinniioonn
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
this report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the “Code”) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Annual Report 2020 – 2021
71
Independent Auditor’s Report (Cont.)
KKeeyy AAuuddiitt MMaatttteerrss
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Change in functional and presentation currency
from AUD to USD
Effective 1 January 2021 the Group's functional
and presentation currency changed from
Australian dollars to U.S. dollars as disclosed in
Note 3.
The Group's assets, liabilities and equity which
were previously denominated in Australian dollars
were translated into U.S. dollars on the date the
functional currency changed.
Significant judgement is required in determining
the currency of the primary economic
environment in which the Group operates, which
requires an evaluation of various indicators
related to the Group’s underlying transactions,
events and conditions as they relate to generating
and expending cash.
Research and development tax incentive
The Group operates in the biotechnology market
and is in the clinical research stage of developing
a molecule asset, OPT-302, for treatment of eye
diseases.
The Group claims Research & Development tax
incentives ("R&D tax incentives") provided by the
Australian Government as disclosed in Note 4.1.
For the year ended 30 June 2021, the Group has
recognised an R&D tax incentive receivable of
$4.9 million within the consolidated statement of
financial position, with a corresponding amount
recognised within income tax benefit within the
consolidated statement of profit or loss and other
comprehensive income.
Our procedures included, but were not limited to:
• Obtaining an understanding of how management
determined the Group's functional currency.
• Assessing the status of significant indicators of
functional currency including:
o The currency that mainly influences the
Group's capital and operating costs in
relation to its ongoing research and
development projects
o The currency in which receipts from
equity raising activities are retained.
•
•
Challenging management's assessment through
inquiry and inspecting documentation to assess
whether the date of change in functional
currency is reasonable, and
Confirming the exchange rates applied and re-
performing the translation of underlying balances
into U.S. dollars.
We also assessed the appropriateness of the disclosures in
Note 3 to the financial statements.
Our procedures included, but were not limited to:
• Assessing the design and implementation of key
controls in relation to R&D expenditure and the
preparation and review of the R&D tax incentive
calculation.
• Assessing the accounting policy adopted by the
Group to account for the R&D tax incentive.
In conjunction with our R&D tax specialists we:
• Obtained an understanding of the rules and
regulations governing R&D tax incentives and the
basis used by the Group to recognise the
incentive.
• Assessed the work performed by the Group's
external R&D tax advisors to understand the
process for the preparation and review of the
R&D tax incentive submissions.
72
Opthea Limited
KKeeyy AAuuddiitt MMaatttteerr
Management exercises significant judgement in
respect of R&D tax incentives claimed by the
Group including:
• Determining the accounting policy used
in accounting for the R&D tax incentive.
• Assessing the eligibility of R&D activities
and costs attributed to those eligible
R&D activities against the rules and
regulations governing the R&D tax
incentive.
• Determining the estimated amounts,
timing and geographical location of
future costs related to the projects for
which R&D tax incentive applications
have been approved to date.
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
• Assessed management's documentation
addressing how the Group's R&D activities satisfy
the eligibility criteria outlined in the rules and
regulations governing the R&D tax incentives.
• On a sample basis, inspected R&D expenses to
•
supporting documentation.
Tested on a sample basis, management's
apportionment of costs to these R&D activities
and whether the underlying methodology used
for the apportionment is consistent with the rules
and regulations governing the R&D tax incentive.
• Assessed management's R&D project forecasts
for eligible activities, including assessing the
estimated amounts, timing and geographical
location of future costs.
We also assessed the appropriateness of the disclosures in
Note 2, 4.1 and 12 to the financial statements.
OOtthheerr IInnffoorrmmaattiioonn
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2021, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not and will not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
RReessppoonnssiibbiilliittiieess ooff tthhee DDiirreeccttoorrss ffoorr tthhee FFiinnaanncciiaall RReeppoorrtt
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
AAuuddiittoorr’’ss RReessppoonnssiibbiilliittiieess ffoorr tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
Annual Report 2020 – 2021
73
Independent Auditor’s Report (Cont.)
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the Group audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 25 of the Directors’ Report for the year ended
30 June 2021.
74
Opthea Limited
In our opinion, the Remuneration Report of Opthea Limited, for the year ended 30 June 2021 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Vincent Snijders
Partner
Chartered Accountants
Perth, 30 August 2021
Annual Report 2020 – 2021
75
ASX Additional Information
1 . D I S T R I B U T I O N O F E Q U I T Y S E C U R I T I E S
The number of shareholders, by size of holding, of quoted fully paid ordinary shares as at July 30, 2021 is as follows:
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and Over
Total
Fully paid
ordinary shares
No. of
holders
3,349
3,440
No. of
shares
1,835,417
9,095,179
1,055
8,134,870
971
119
27,131,374
304,806,701
8,934
351,003,541
Number of shareholders holding less than a marketable parcel of shares
1,310
318,883
2 . T W E N T Y L A R G E S T S H A R E H O L D E R S
The names of the 20 largest holders of quoted fully paid ordinary shares and their respective holdings at July 30, 2021 are:
Rank Name
No. of shares
% interest
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
UBS NOMINEES PTY LTD
JAGEN PTY LTD
CS THIRD NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
ARMADA TRADING PTY LIMITED
MRS MARGARET LYNETTE HARVEY
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
GAJA HOLDINGS
LL FAMILY NOMINEES PTY LTD
SUIBIAN TRADING PTY LTD
JUST GROUP INVESTMENT PTY LTD
CS FOURTH NOMINEES PTY LIMITED
ARMADA TRADING PTY LTD
JAGEN PTY LTD
BNP PARIBAS NOMINEES PTY LTD
20
GEOFFREY PAUL KEMPLER
Totals: Top 20 holders of ordinary fully paid shares
Total remaining holders balance
76
Opthea Limited
121,305,679
36,818,813
29,632,302
12,105,634
11,581,484
10,588,622
10,009,416
7,969,850
5,071,967
4,000,000
3,156,372
2,851,675
2,527,897
2,420,933
1,934,559
1,823,462
1,610,064
1,439,056
1,428,898
1,425,837
34.56%
10.49%
8.44%
3.45%
3.30%
3.02%
2.85%
2.27%
1.44%
1.14%
0.90%
0.81%
0.72%
0.69%
0.55%
0.52%
0.46%
0.41%
0.41%
0.41%
269,702,520
81,301,021
76.84%
23.16%
ASX Additional Information (Cont.)
3 . S U B S T A N T I A L S H A R E H O L D E R S
The following information is current at July 30, 2021 based on information extracted from the substantial shareholding notices
given to the Company by shareholders who hold relevant interests in more than 5 per cent of the Company’s voting shares:
Name
Regal Funds Management Pty Ltd
Baker Brothers Life Sciences LP
Bank of America Corporation and its related bodies corporate
UBS Group AG and its related bodies corporate
No. of
shares
36,253,572
29,696,496
17,879,283
17,736,308
4 . V O T I N G R I G H T S
Clauses 44 to 53 of the Company’s Constitution stipulate the voting rights of members. In summary, but without prejudice to the
provisions of the Constitution, every member present in person or by representative, proxy or attorney shall have one vote for each
ordinary share held by the member.
The Company’s shares are quoted on the Australian Securities Exchange Limited (ASX code: OPT).
Annual Report 2020 – 2021
77
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Opthea Limited
B A N K E R S
Commonwealth Bank of Australia
Melbourne, Victoria
A U D I T O R S
Deloitte Touche Tohmatsu
550 Bourke Street,
Melbourne, Victoria 3000
S O L I C I T O R S
Gilbert and Tobin
101 Collins Street,
Melbourne, Victoria 3000
S H A R E R E G I S T E R
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street,
Abbotsford, Victoria 3067
Telephone: +61 (3) 9415 4000 or
1300 850 505 (within Australia)
S T O C K E X C H A N G E L I S T I N G
Opthea Limited’s shares are quoted on the Australian
Securities Exchange Limited ASX (code: OPT).
Opthea Limited ADS are quoted on the U.S. Securities
and Exchange Commission (SEC) NASDAQ (code: OPT).
Corporate Information
C O M P A N Y
Opthea Limited
ABN 32 006 340 567
D I R E C T O R S
Jeremy Levin
Non‑Executive Director and Chairman
Megan Baldwin
Managing Director and Chief Executive Officer
Michael Sistenich
Non‑Executive Director
Lawrence Gozlan
Non‑Executive Director
Daniel Spiegelman
Non‑Executive Director
Julia Haller
Non‑Executive Director
Judith Robertson
Non‑Executive Director
C O M P A N Y S E C R E T A R Y
Karen Adams
BBus, CPA GAICD,FGIA FCG
R E G I S T E R E D O F F I C E
Level 4, 650 Chapel Street,
South Yarra, Victoria 3141
P R I N C I P A L A D M I N I S T R A T I V E O F F I C E
Level 4, 650 Chapel Street,
South Yarra, Victoria 3141
www.opthea.com
Telephone: +61 (3) 9826 0399
www.colliercreative.com.au #OPT0027
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