OPThEA LimiTEd / Appendix 4e 2022
Appendix 4E
Preliminary Final Report
OPTHEA LIMITED
ABN 32 006 340 567
YEAR ENDED JUNE 30, 2022
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Revenues from ordinary activities
90,683
68,613
Up 32.1%
June 30, 2022
$
June 30, 2021
$
Movement
%
Loss from ordinary activities after tax attributable to members
(92,817,371)
(45,344,496)
Loss for the year attributable to members
(92,817,371)
(45,344,496)
Loss has
increased
104.7%
Loss has
increased
104.7%
NTA Backing
Net tangible asset backing per ordinary security
0.21
0.58
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.
1
PROGRESSING
WITH A CLEAR
OBJECTIVE
AnnuAl RepoRt 2021 – 2022
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 NASDAQ
exchange in October 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 aging 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
1
2021–2022 Highlights
2 OPT-302 Progressing in global wet AMD Phase 3 trials
4
9
Building momentum with new appointments
Chairman’s Report
10 CEO’s Report
12 Environmental, Social and Governance at Opthea
14 Directors’ Report
40 Management Team
43 Financial Report
93 Corporate Information
Continued patient
enrollment for ShORe and
COAST Phase 3 clinical trials
in the United States, and
initiated patient recruitment
in Europe, Canada, Asia
Pacific and Latin America
Expanded our leadership
team, Board of Directors
and operations in the
United States
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
2021–2022
HIGHLIGHTS
Increased our profile
with the global investment
and clinical ophthalmology
community through
participation in local and
international conferences,
symposia and events,
including the American
Society Retina Specialists
(ASRS), Retina World,
Angiogenesis and
Association for Research in
Vision and Ophthalmology
(ARVO) conferences
Built on our regulatory strategy
with OPT-302 granted Fast-Track
Designation for wet AMD in
July 2021
Strengthened Opthea’s strategic
position to maximize the value
of OPT-302 through the
announcement of a non-dilutive
financing transaction for up to
US$170 million and a US$90 million
equity financing
1
OPT-302 PROGRESSING
IN GLOBAL WET AMD
PHASE 3 TRIALS
Wet AMD affects
over 3.5 million
people in the US
and Europe. OPT-302
having demonstrated
meaningful, improved
visual outcomes in
its Phase 2b studies
steps us closer to
helping a large and
growing population.
We are progressing our two concurrent,
global, randomized, sham‑controlled
Phase 3 clinical studies:
ShORe:
Study of OPT-302 in
combination with
Ranibizumab
COAST:
Combination OPT-302
with Aflibercept STudy
The ShORe and COAST Phase 3
trials build upon and maintain key
features of our successful Phase 2b
clinical trial of OPT‑302 combination
therapy for the treatment of wet
AMD. Both Phase 3 studies evaluate
OPT‑302 as a combination therapy
over a 52 week treatment period,
each with 990 patients.
The primary endpoint of the
Phase 3 studies is the mean change
in best corrected visual acuity
(BCVA) from baseline to week 52
for OPT‑302 combination therapy
compared to standard of care
anti‑VEGF‑A monotherapies.
activated sites
and enrolled
patients in the
two pivotal Phase
3 clinical trials for
the treatment
of wet AMD
TRIAL
HIGHIGHTS
Over
170
Approximately
35
clinical trial
sites activated
globally for each
Phase 3 trial
countries around the
world are recruiting
patients for our
Phase 3 program
2
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
FASt-tRACK
DEVELOPMENT
TIMELINE
Superior Phase 2b results led to the
US FDA granting Fast‑Track designation
to OPT‑302 as combination therapy
for the treatment of patients with
wet AMD. Fast‑Track designation is
designed to expedite drug development
and review to get important new
therapies with an unmet medical need
to patients more quickly. If our Phase 3
trials are successful, Opthea plans to
file Biologics License and Marketing
Authorization Applications with
regulatory agencies in the US and
Europe respectively.
COMMERCIAL
ADVANTAGES
Investigation of OPT‑302 as a
combination therapy with two leading
standard of care treatments may
position OPT‑302 as a complementary
treatment for administration with any
VEGF‑A inhibitor.
WHY opt-302
Current standard of care treatments
for wet AMD are largely limited to
VEGF‑A inhibitors such as ranibizumab
(Lucentis®) or aflibercept (Eylea®).
This is administered as an injection
once or twice per month by intravitreal
delivery. Though patients are offered
some vision benefit, most patients fail to
achieve sufficient vision gains to resume
routine daily activities such as driving
and reading. Often, they experience
further vision loss after 12 months.
Recent and current clinical trials in the
wet AMD landscape have focused on
achieving increased durability, measured
by longer treatment intervals, without
aiming to improve visual outcomes.
By contrast, our successfully completed
Phase 2b study data has demonstrated
OPT‑302 combination therapy offers
superior vision gains (mean BCVA
gain of +3.4 letters) over the current
standard of care in wet AMD with
comparable safety.
The design of ShORe and COAST have
been optimized based on Phase 2b
outcomes to maximize probability of
success and commercial opportunity
for OPT‑302.
RECRUITMENT FOR
PHASE 3 STUDIES
We have been actively recruiting
patients globally for participation in
both ShORe and COAST Phase 3
studies. As at August 2022, over
150 clinical trial sites for each study
have been activated in the US, Canada,
Europe and Asia Pacific. When fully
activated, we expect over 190 clinical
trial sites to participate in each study.
Over the next 12 months, we will
continue to work with a global
Clinical Trial Organization to accelerate
recruitment and site activations with
a target completion of mid‑2023.
COMPLETING THE
PHASE 3 STUDIES
The ShORe and COAST studies are
both double‑masked, sham‑controlled
Phase 3 registrational trials to evaluate
efficacy and safety of intravitreal
2.0 mg OPT‑302 in combination with
either 0.5 mg ranibizumab (Lucentis®),
or 2.0 mg aflibercept (Eylea®)
respectively.
Each study will investigate the mean
change in best corrected visual acuity
from baseline to week‑52 for OPT‑302
combination therapy versus standard
of care therapy alone. Topline data
for primary analysis is expected to be
reported when all patients complete
the 52‑week treatment period.
If the topline results at the completion of
the primary efficacy phase are favorable,
we intend to file for marketing approval
for OPT‑302 for the treatment of wet
AMD in the US and EU as a priority.
3
BUILDING
MOMENTUM
WITH NEW
APPOINTMENTS
Over the past 12 months, whilst
Opthea has been single-mindedly
focused on progressing its research
program, the company has also
gained increasing recognition as a
biotechnology leader in ophthalmology.
To continue building momentum
and its international profile,
Opthea has substantially grown
its management team, which is
now based across Australia and the
United States. The appointment
of these highly experienced executives
delivers a range of benefits including
their proven track records in late-stage
clinical development and bringing
therapies to market.
During 2021-2022, Opthea welcomed
its first Chief Medical Officer, Joel Naor
and Chief Commercial Officer, Judith
Robertson to the team. Opthea’s new,
experienced team members in our
clinical operations, manufacturing and
commercial teams will assist with the
advancement of OPT-302 through the
pivotal Phase 3 trials and preparations
for commercialization.
To better understand the people
behind two recent senior C-suite
appointments, we invite you to review
their backstories to learn more about
them, their roles and how they intend
to impact Opthea’s operations and
its future plans.
4
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
MEET OUR CHIEF
MEDICAL OFFICER
JOEL
NAOR, MD
Dr. Joel Naor, based in Palo Alto,
Silicon Valley California and Opthea’s
Chief Medical Officer, has been
involved in the field of retinal disease
therapeutics “from its inception”
more than 20 years ago. Dr. Naor has
worked on approaches ranging from
photodynamic therapy (PDT), biologics,
small molecules, sustained release
technologies, and stem cells.
“I worked on PDT, which was the
first product – or technology –
to be approved, in 2000, and I’ve
seen retinal therapies go from nothing
to a multi‑billion dollar market.”
“But since the first approval of the class
of drugs that block VEGF‑A, in 2004,
we’ve had really very little progress
in the field offering advances in
patient visual functional improvements.
There’s been a lot of drugs, and now,
there are even biosimilar anti‑VEGF‑A
drugs, but everything that has been
subsequently approved has been
on the basis of being ‘as‑good‑as,’ or
non‑inferior to the initial anti‑VEGF‑A
treatment approach – and none of
them have been shown to improve
efficacy. That was until our product
OPT‑302 came along with its potential
to change things.”
“There is definitely a sense that we’re
doing something very unique here
at Opthea, something quite noble, in
that we’re working on a new mechanism
of action that may improve patient
outcomes, for a very important human
need – vision.”
“The majority of work in this field, in
effect, has said to patients, ‘Hey, we are
going to make your life a little bit easier,
you’re not going to have to see the
doctor as frequently, but don’t expect
anything more in terms of your vision
or other outcomes.’ However we
believe OPT‑302 is bringing benefit
to patients by potentially improving
visual outcomes. That’s a huge
diffentiator for Opthea, and a big
motivator for employees, but also
patients and physicians.”
For Dr. Naor, OPT‑302 potentially gets
to the heart of personalized medicine.
“Most of the results by which we judge
drugs are based on some average that is
observed in a patient population, but we
know that many patients do not actually
respond optimally, and patients do not
respond equally. Here, we have a drug
that may actually benefit a significant
group of patients. I think each of us
feels that it would be very satisfying to
see OPT‑302 through to application in
patients. I’ve worked with companies
that succeeded before, and in our world,
there’s nothing like that rush.”
5
MEET OUR CHIEF COMMERCIAL OFFICER
JUDITH
ROBERTSON
“I was, and continue to be, impressed
by the pioneering culture and tenacity of
Opthea, a company unrelenting in their
pursuit of the VEGF‑C and VEGF‑D
pathway and unyielding in the goal to
improve visual outcomes for patients
suffering from wet AMD”.
Judith Robertson’s decision to join
the executive management team as
Chief Commercial Officer was
strengthened by her conviction
that she could apply her significant
experience in commercialization of
eye disease therapeutics to position
OPT‑302 as the next transformative
treatment paradigm for wet AMD.
Robertson concluded with this final
statement,
As Chief Commercial Officer,
I recognize that with all great
innovation comes great responsibility
and accountability, and I intend to
apply ever aspect of my acumen,
experience and passion to ensuring
the OPT-302 becomes a reality for
wet AMD patients worldwide.
Chief Commercial Officer Judith
Robertson came to Opthea in
January 2022 by a unique route;
she was on the Board of Directors as
a non‑executive director who elected
to move across to the executive team.
Robertson was appointed to the
Opthea Board precisely because of
her 25+ years of successful track
record in biopharma commercialization
with companies such as Johnson &
Johnson, Alcon and Novartis.
“I was only on the board of Opthea
a few months and realized two
things very quickly. Firstly, OPT‑302
is an incredible asset that is highly
differentiated in the wet AMD space
and represents the only asset in the near
and long‑term development pipeline
with the potential to address the most
important unmet need in wet AMD, the
need to improve visual outcomes over
standard of care anti‑VEGF therapy.
Secondarily, there is much opportunity,
from a global perspective, to increase
the awareness of Opthea, OPT‑302 and
the inherent commercial opportunity in
our lead product candidate.”
6
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
7
Our goal is to roll back the
terrible loss of sight for millions
around the world by fundamentally
innovating treatments for AMD.
Jeremy Levin
Chairman
8
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
CHAIRMAN’S
REPORT
Let me start by reiterating my comments
of last year and note that on behalf of
the Board and management of Opthea,
we send our best wishes to shareholders
in the hope that they and their loved
ones have passed this last year without
major mishap occasioned by the pandemic.
We also express our deepest sympathy
to those who are amongst the millions
of families who have suffered loss from
COVID‑19. The role of biotechnology
in pushing back the depredations of
the pandemic by bringing new vaccines
and medicines to the battle against
COVID‑19 has been remarkable.
We at Opthea are proud to be part
of that global innovation engine.
Our goal is to roll back the terrible loss
of sight for millions of people around
the world by fundamentally innovating
treatments for AMD. We firmly believe
that by doing so, we will benefit patients,
shareholders and more broadly help
increase the economic health of our
society as workers who might be
affected can continue to live normal
and productive lives.
To do this we have taken key steps.
One year ago we embarked on
building out our board. That has been
accomplished with the addition of
Mr. Quinton Oswald and Dr. Susan Orr,
leaders in the fields of ophthalmology.
More recently we have now established
the financing to further enable us to
work towards completing our Phase 3
clinical trials. Joined by world‑leading
investors Carlyle and its life sciences
franchise Abingworth, we have secured
additional capital resources to continue
to tackle the remaining steps for our
Phase 3 clinical trials.
commercial launch should our trials
succeed. While taking these steps, we will
endeavor to create better visibility for
our company within the global investor
and clinical ophthalmology communities.
It is notable that in the last year we
have continued to progress our Phase 3
trials and expanded our management
team in the US following our listing on
the NASDAQ stock exchange in October
2020. We are now focused on further
strengthening our management team and
advancing our clinical program, while
bringing to the attention of investors
around the world the remarkable
potential that we believe our product
candidate OPT‑302 holds.
As generic versions of older treatments
are introduced, the market potential
remains considerable for OPT‑302,
an investigational agent in late‑stage
development with the potential to improve
vision outcomes over standard of care
for patients with wet AMD. This excites
us. We are motivated to deliver the
value that we believe is inherent in
our product and our approach.
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
Going forward, our focus will be on
execution of the Phase 3 trials and laying
the necessary groundwork for a
Jeremy Levin
Board Chairman
Opthea Limited
9
CEO’S
REPORT
Dear Shareholders
The past 12 months has seen
Opthea make tremendous progress
in establishing Opthea as a globally
recognized, emerging biotechnology
company in ophthalmology.
Our experienced management team,
now based in both Australia and the
United States, has grown significantly
over the past year as we recognize the
importance of building our profile globally
with highly experienced executives who
have proven track‑records in late‑stage
clinical development and bringing
therapies to market. During the year we
welcomed Opthea’s first Chief Medical
Officer and Chief Commercial Officer,
and expanded our manufacturing,
clinical operations and commercial teams
to advance OPT‑302 through our pivotal
Phase 3 trials in anticipation for potential
commercialization, if approved. Aligned
with the expansion of the management
team, Opthea’s Board was also bolstered
with the addition of Mr. Quinton Oswald
and Dr. Susan Orr as non‑executive
directors who bring a breadth of
experience in leading biotechnology
companies and launching commercial
products for wet AMD and other
ophthalmic diseases.
Whilst expanding our operations, our
commitment to advancing OPT‑302
has only strengthened. Wet AMD is a
debilitating disease that affects central
vision and consequently, greatly impacts
quality of life and the ability for patients
to live independently. Current standard
of care treatments for wet AMD are
largely limited to VEGF‑A inhibitors and
although they have revolutionized the
treatment of wet AMD, despite receiving
regular administration of this class of
therapy, a majority of patients
fail to achieve sufficient vision gains to
resume routine daily activities such as
driving and reading. There is an urgent
need for new approaches, beyond
selective inhibition of VEGF‑A, to
improve outcomes for patients with
wet AMD. OPT‑302, as a VEGF‑C/D
inhibitor, is complementary to
anti‑VEGF‑A treatments. Used in
combination, OPT‑302 achieves broad
blockade of the VEGF pathway and
targets important mechanisms that
are associated with sub‑optimal vision
improvement in patients receiving
standard of care treatments alone.
It is this understanding of the mechanism
of our treatment, OPT‑302, which drives
us to advance OPT‑302 through the
final stages of clinical development,
Phase 3 clinical trials.
Our Phase 3 program has been
informed greatly by the outcomes
of our Phase 2b clinical trial in wet
AMD that demonstrated superior
vision outcomes when OPT‑302 is
administered in combination with
standard of care anti‑VEGF‑A therapy.
Although we have maintained many
important aspects of our trial design
in the Phase 3 studies, importantly
the design of and our analysis plan for
ShORe and COAST have been optimized
based on Phase 2b outcomes to
maximize probability of success and
commercial opportunity for OPT‑302.
We are now actively recruiting patients
globally for ShORe and COAST and
expect to complete patient recruitment
for both trials in mid calendar year
2023 and to report topline data in
mid calendar year 2024. Over the
next 12 months we will continue to
robustly manage execution of these
studies with the clear objective of
bringing this important new treatment
to patients for whom there are currently
limited treatment options.
Our recent announcements of an up
to US$170 million non‑dilutive financing
for our OPT‑302 program in wet AMD,
with Launch Therapeutics, a recently
formed development company backed
by funds managed by global investment
firm Carlyle and its life sciences
franchise Abingworth, together
with a concurrent US$90 million
private institutional placement
(with approximately US$47.5 million
subject to shareholder approval)
and share purchase plan, reflect the
potential of OPT‑302 to change the
treatment paradigm for wet AMD
and the promising commercial
opportunity for the asset. We expect
these transactions will greatly assist
Opthea in funding its pivotal Phase 3
clinical trials.
Our achievements this year would not
be possible without the efforts of all our
employees and the commitment of our
Board, our shareholders and the many
investigators and patients who are
participating in our Phase 3 program.
Thank you for your support.
Megan Baldwin, PhD
CEO & Managing Director
Opthea Limited
10
OPThEA LIMITED / AnnuAl RepoRt 2021 – 2022
FORWARD-LOOKING STATEMENTS
Certain statements in this report may
contain forward-looking statements
within the meaning of the US Private
Securities Litigation Reform Act
of 1995. Any statement describing
Opthea’s goals, expectations,
estimates, intentions or beliefs is a
forward-looking statement and should
be considered an at-risk statement,
including, but not limited to, the
expected enrollment of a significant
number of patients for the trials,
the advancement of Opthea’s
Phase 3 registrational program and
commercialization efforts for OPT-302,
the expected timing of Opthea’s
Phase 3 program and trials, Opthea’s
anticipated funding needs and cash
runway, including following the
financing activities, Opthea’s ability to
meet its payment and other obligations
under the financing arrangements,
including compliance with the
minimum cash requirement, Opthea’s
ability to draw the entire US$170 million
of funding capacity in a timely manner
or at all, Opthea’s ability to consummate
the second tranche of the private
institutional placement, and Opthea’s
goal of building out a substantial
presence in the United States.
Such statements are based on
Opthea’s current plans, objectives,
estimates, expectations, and intentions
and are subject to certain risks and
uncertainties, including risks and
uncertainties associated with clinical
trials and product development,
including unexpected costs or delays
in the clinical trial process, risks from
the continuing COVID-19 pandemic,
and the impact of general economic,
industry or political conditions in
Australia, the United States or
internationally. These and other
risks and uncertainties are described
more fully in the section titled “Risk
Factors” in Opthea’s Annual Report
on Form 20-F filed with the SEC on
October 28, 2021. If the risks materialize
or assumptions prove incorrect,
actual results could differ materially
from the results implied by these
forward-looking statements.
Opthea undertakes no obligation to
publicly update any forward-looking
statement, whether as a result of
new information, future events, or
otherwise, except as required under
applicable law. You should not place
undue reliance on these forward-looking
statements as predictions of future
events, which statements apply only
as of the date of this announcement.
Actual results could differ materially
from those discussed in this report.
11
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE AT OPTHEA
Our mission is
to expeditiously
develop our
innovative therapies
to improve vision
and enhance public
health for better
quality of life.
As a biotechnology innovator,
Opthea recognizes the opportunity
we have to drive positive outcomes
for not only our own business but
for the promotion of public health.
Our approach to environmental,
social and governance (ESG) pivots
on how we intend to unite these
positive outcomes with the growth
of enterprise value by integrating
ESG decision‑making into all aspects
of Opthea’s operations.
Opthea has identified a range of key
factors to serve as the foundation for
a meaningful, purposeful, and practical
ESG strategy. This has the potential
to transform the way we discover and
develop medical breakthroughs that
will change the lives of our patients.
We also understand the importance
of setting measurable targets against
which we can track our progress over
time. This will ensure accountability
to our stakeholders while enabling the
business to celebrate and recalibrate
as we continue to grow.
Drug safety
Promotion of public health
Safe and secure clinical trials
Patient
health &
safety
Innovation
Driving enterprise value
Intellectual property protection
Continued innovation
Diversity and inclusion
ESG AT
OPTHEA
Ethics
Data privacy
Supply chain transparency
Clear and accurate labeling
Dealing with medical professionals
Competitive behavior
Equitable
pricing and
access
Ensuring accessibility
Ensuring affordability and fair pricing
12
Our priority issues
DRUG SAFETY
BUSINESS ETHICS
Opthea is under strict regulation
regarding its ethical expectations
for dealing with medical professionals,
such as complete impartiality.
Beyond this, Opthea is committed to
accuracy and clarity over the marketing
and labeling of its future products.
Our corporate policy for recruitment is
to hire the most appropriate individual
for the role. Opthea recognizes the
benefits of internal diversity, such as a
wide range of opinions and backgrounds
contributing to ideation, innovation,
and problem‑solving.
ACCESS & AFFORDABILITY
We envisage a future of sustainable
healthcare solutions where all people
have fair and affordable access to
life‑changing eye treatment. This forms
a key cornerstone of our mission to
enhance public health by improving
the vision of our patients. Opthea will
take measures to focus on affordability
of its therapies. Opthea’s initial research
in this space has informed the company’s
expectations of pricing and a more
detailed framework will be created
once appropriate.
Ensuring the safety of our therapies
is of critical importance to Opthea.
We have protocols in place to monitor
clinical trial safety, and follow strict
processes in our drug supply chain.
This includes maximizing transparency
across supply chain and the conduct
of our clinical trials, which has a wide
range of benefits to our stakeholders.
These range from clarity over labor
practices, to environmental tracking, and
serves as a measure to ensure each drug
batch is tracked and secure. Monitoring
the safety and efficacy of our drugs is
one of the primary methods by which
Opthea strives to enhance public health.
PATIENT PRIVACY
Standard operating procedures for
clinical trial conduct and its data safety
forms the backbone of its ongoing
patient privacy strategy. Our process
and the committee plays a key role in
the oversight of patient privacy and
sensitive information. Its proactivity of
data privacy risk monitoring exceeds
basic industry requirements, displaying
an extreme aversion to potential threats
or leaks. Opthea also requires internal
staff to undergo data privacy training
procedures.
INNOVATION AND IP
The development of an innovative
therapy to improve patient vision is
central to Opthea’s enterprise value.
As such, the business engages
professional patent attorneys to
monitor its ongoing intellectual property.
Similarly, we firmly believe that fair and
ethical competitive behavior is essential
to a healthy commerce. As such, Opthea
maintains strict corporate governance
policies, in place to address this issue.
Committed
to low impact
business
operations
Opthea recognizes the threat
a changing climate poses to
global health and minimizes its
emissions contribution wherever
practicable. Our environmental
footprint is inherently low, and
to help maintain this we have a
policy to allow employees to work
from home, reducing transport
emissions. We also offset our
infrequent flights.
The importance Opthea places
on transparency extends to our
commitment to a supply chain
free from human and labor rights
violations. The relationships and
procedures we have in place with
suppliers maximize our supply
chain transparency and visibility
of any potential shortcomings in
labor rights.
Opthea minimizes its waste
generation by partnering with
sustainable vendors for our
medical products, encouraging the
decoupling of medical treatment
from plastic waste. Our office
waste is managed collectively by
our Melbourne office complex.
A waste stream procedure is in
development in advance of our
products coming to market, at
which point our key waste sources
will be plastic needles, glass
vials, and associated packaging.
In addition, our products do
not exacerbate the depletion
of primary resources as input
materials are self-regenerative,
biological, and only needed in
relatively small quantities.
13
Directors’ Report
The board of directors of
Opthea Limited submits its
report for the year ended
June 30, 2022 for Opthea
and its subsidiaries.
INFORMATION ABOUT THE DIRECTORS
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
Megan Baldwin, Managing Director
and Chief Executive Officer
Susan Orr, Non‑Executive Director
(appointed April 21, 2022)
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
(resigned January 1, 2022)
Quinton Oswald, Non‑Executive Director
(appointed April 21, 2022)
The qualifications, experience and special
responsibilities of the Company’s Directors
are as follows.
COMPANY SECRETARY
Karen Adams
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.
14
JEREMY LEVIN
PhD, 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 PhD in Chromatin Structure, all from University
of Oxford, and a MB BChir from the University of Cambridge.
MEGAN BALDWIN
B.Sc (Hons), PhD
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.
MICHAEL SISTENICH
M.Sc
Non‑Executive Director
Michael Sistenich was appointed Non‑Executive Director of Opthea
in November 2015 and is Chairman of the Remuneration committee.
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,
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
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.
LAWRENCE GOZLAN
B.Sc. (Hons)
Non‑Executive Director
Lawrence Gozlan was appointed as
a director on July 24, 2020 and is
Chairman of the Nominations committee.
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
B.A., MBA
Non‑Executive Director
Daniel Spiegelman has served as a
member of the board of directors since
September 2020 and is Chairman of the
Audit and Risk Committee. 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.
DR. JULIA HALLER
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.
DR. SUSAN ORR
OD
Non‑Executive Director
Susan Orr was appointed Non‑Executive
Director of Opthea in April 2022.
Dr. Orr is an experienced medical
and business leader with specialization
in identifying, developing and
commercializing ophthalmic therapeutic
product candidates. Dr. Orr currently
serves as the Chief Medical Officer at
Claris Biothereapeutics and is a member
of the Retina Global Board of Directors.
Before Claris, Dr. Orr was the Chief
Executive Officer at Notal Vision
subsequent to joining the company as
Chief Medical Officer. Dr. Orr has spent
more that 30 years in the field of
ophthalmology that also includes ten
years in private optometric practice and
leadership roles at Alcon and Janssen
spanning international development,
global new product strategy, and
business development and licensing.
Dr. Orr participated in multiple
acquisitions including Durezol® and
Beovu® (brolucizumab) and has been
a Managing Partner at Fovenedeye
Consulting since 2016.
QUINTON OSWALD
Non‑Executive Director
Quinton Oswald was appointed
Non‑Executive Director of Opthea
in April 2022. Mr. Oswald brings over
25 years of international general
management experience, including
onsite assignments in the US, Europe
and South Africa. Most recently, he was
the CEO of Notal Vision, a commercial‑
stage ophthalmic home monitoring
services provider with a focus on both
wet and dry AMD. Prior to Notal Vision,
he served as the CEO of Neurotech and,
prior to that, as the CEO of SARcode
Bioscience, where he was instrumental
in the clinical development of lifitegrast
ophthalmic solution 5% (Xiidra®) for
the treatment of dry eye disease,
and its subsequent sale to Shire, PLC.
Previously, he was Vice President and
Business Unit Head for Genentech’s
tissue growth and repair business.
During his tenure at Genentech,
Mr. Oswald oversaw the highly
successful commercial launch of
Lucentis® (ranibizumab) for the
treatment of wet AMD. Before
Genentech, Mr. Oswald led the North
American Ophthalmology business for
Novartis, which, in conjunction with
QLT, Inc., pioneered Visudyne®.
15
Directors’ Report (cont.)
Directorships of other listed companies
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
Daniel Spiegelman
Julia Haller
Directors’ interests
Company
period of directorship
Ovid Therapeutics Inc (NASDAQ)
Since 1997
Lundbeck (NASDAQ)
Invex Therapeutics (ASX)
Since 2017
Since 2020
Alterity Therapeutics Limited (ASX)
Since 2011
Myriad Genetics (NASDAQ)
Jiya Acquisition Corp (NASDAQ)
Spruce BioScience (NASDAQ)
Eyenovia (NASDAQ)
Bristol Myers Squibb (NYSE)
Since 2020
Since 2020
Since 2020
Since 2021
Since 2019
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/
Rights
granted
under ltIp
and neD
plans
Fully paid
ordinary
shares
3,839,398
4,600,000
–
3,000,000
1,233,097
1,500,000
1,877,357
2,000,000
–
–
–
–
2,000,000
2,000,000
1,000,000
1,000,000
Megan Baldwin
Jeremy Levin
Michael Sistenich
Lawrence Gozlan
Daniel Spiegelman
Julia Haller
Susan Orr
Quinton Oswald
16
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Share options
As at June 30, 2022 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, 2021 and 2022 financial years the Company granted 25,969,000 options, rights and ADS 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
expiry date
Granted to
March 7, 2016
March 7, 2021
Directors under the LTIP and NED plan
March 31, 2016
January 1, 2022
Employees under the LTIP
August 23, 2017
January 1, 2023
Employees under the LTIP
exercise price
number of
options granted
$0.36
$0.37
$0.92
7,000,000
2,625,000
500,000
November 29, 2018
November 29, 2022
Directors under the LTIP and NED plan
$0.625
6,000,000
April 3, 2019
April 3, 2023
Employees under the LTIP
$0.608
2,844,000
October 12, 2020
October 11, 2024
Directors under the NED Plan
October 12, 2020
October 11, 2024
Directors under the NED Plan
January 19, 2021
January 18, 2025
Directors under the NED Plan
October 19, 2021
October 18, 2025
Directors under the NED Plan
October 19, 2021
October 18, 2025
Employees under the LTIP
April 21, 2022
April 21, 2026
Directors under the NED Plan
June 6, 2022
June 6, 2032
Employees under the LTIP
$2.16
$3.24
$1.56
$0.948
$0.948
$0.75
$1.46
Grant date
expiry date
Granted to
exercise price
2,000,000
2,000,000
3,000,000
2,000,000
2,000,000
2,000,000
800,000
32,769,000
number of
performance
rights
October 19, 2021
October 19, 2031
Director under the LTIP
Grant date
expiry date
Granted to
October 18, 2021
October 18, 2031
Employees under the LTIP
January 10, 2022
January 10, 2032
Employees under the LTIP
March 1, 2022
March 1, 2032
Employees under the LTIP
April 18, 2022
April 18, 2032
Employees under the LTIP
May 23, 2022
May 23, 2032
Employees under the LTIP
June 1, 2022
June 1, 2032
Employees under the LTIP
June 20, 2022
June 20, 2032
Employees under the LTIP
$ Nil
1,600,000
1,600,000
exercise price
number of
ADS options
$7.62
$7.51
$6.01
$6.09
$7.12
$7.45
$5.52
175,000
150,000
300,000
80,000
80,000
80,000
60,000
925,000
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.
17
Directors’ Report (cont.)
Dividends
No cash dividends have been paid, declared or recommended during or since the end of the financial year by the Company.
principal activities
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 2021‑2022 included progression of the Company’s Phase 3 registrational trials of OPT‑302 for
wet AMD through the activation of clinical trial sites in countries globally and continued enrollment of patients into the studies.
Opthea also manufactured OPT‑302 for use in the Phase 3 clinical trials, conducted activities to support commercialization of
the product and expanded its management team in the US to facilitate broader oversight and execution of its Phase 3 program.
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.
operating and financial review
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 3 clinical trials;
• Total R&D expenditure amounted to US$78,654,217 (2021: US$25,891,851). 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$14,481,116
(2021: US$11,403,170);
• Opthea received an R&D tax incentive payment during the year of US$4,972,898 (2021: US$5,834,100); and
• The consolidated net loss of the Group for the year was US$92,817,371 after an income tax benefit of US$6,299,286
(2021: loss of US$45,344,496 after an income tax benefit of US$4,938,846).
FINANCIAL POSITION
The Group’s statement of financial position includes the following key balances:
• Consolidated cash balances as at June 30, 2022 amounted to US$44,631,293 (2021: US$118,193,177);
• Receivables of US$6,556,954 (2021: US$5,538,184) include the Opthea Group’s expected refund of R&D tax incentives
for the year to June 2021 of US$6,299,285 (2021: US$4,972,898);
• The Group has a net current asset surplus of US$47,866,741 (2021: US$135,011,031); and
• The net tangible asset backing per share as at June 30, 2022 was US$0.21 (2021: US$0.58); Opthea’s share price was
AU$1.10 (2021: AU$1.34).
18
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
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.
OPT‑302 has the potential to be positioned as complementary and agnostic with any combined anti‑VEGF‑A therapy for
the treatment of wet AMD, a strategy intended to maximize the commercial opportunity for the therapy.
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$12 billion
in 2021. 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.
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 intravitreal 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 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.
19
Directors’ Report (cont.)
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 progressing its
Phase 3 pivotal program in wet AMD, through continued patient recruitment into the ShORe and COAST clinical trials, activation
of clinical trial sites in countries in various regions around the world and manufacture of OPT‑302 to cGMP standards for use in
the clinical trials. The Company also conducted activities to support commercialization of the product, included enhancing its
presence at clinical ophthalmology conferences and symposia and representation at several investment events focused on
emerging ophthalmology companies. These increased efforts were further facilitated by the growth of Opthea’s management
team in the US to execute its Phase 3 program and begin pre‑commercialization activities.
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.
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); and
• COAST: Combination OPT‑302 with Aflibercept Study (Study OPT‑302 1005).
Both ShORe and COAST are currently enrolling treatment naïve patients.
In ShORe, treatment naïve patients with wet AMD are 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 are 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 of the ongoing trials 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 this 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.
20
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
The first patients were treated in our Phase 3 pivotal program in March 2021 in the US, and since that time, we have
continued to activate clinical trial sites and recruit patients globally. In August 2021, the first sites commenced enrollment
in Canada, followed subsequently with patients randomized in Europe, Asia Pacific and Latin America.
Opthea continues to expect to complete patient recruitment in the Phase 3 clinical trials of OPT‑302 for the treatment of
wet AMD by mid‑2023, with topline data to be reported when all patients complete the 52‑week treatment period for the
primary analysis. If the topline results at the completion of the primary efficacy phase are favorable, Opthea expects to file
for marketing approval for OPT‑302 for the treatment of wet AMD in the United States, European Union and other territories.
CORPORATE UPDATE
In August 2022, Opthea was pleased to announce a non‑dilutive financing transaction for up to US$170 million from Carlyle
and its life sciences franchise Abingworth, working with their recently formed development company Launch Therapeutics
(Launch Tx). The non‑dilutive financing consists of a US$120 million commitment and an option to increase funding by a further
US$50 million. If OPT‑302 is approved in a major market, Carlyle and Abingworth will be eligible to receive fixed success
payments and variable success payments of 7% on annual net sales, which terminate after reaching four times the funded amount.
Concurrent with this non‑dilutive financing, Opthea also announced the close of a US$90 million equity financing which was
well supported by existing and new institutional investors, including large global and US‑based funds. The private placements
consists of two tranches. The first tranche for AU$60.7 million (US$41.9 million) was funded on August 24, 2022. Opthea will
use reasonable best efforts to obtain shareholder approval to issue and consummate the second tranche, which will be for
US$47.5 million, or 59 million shares.
In February 2022, Opthea also announced the establishment of an “at the market” program whereby Opthea may offer and
sell its ordinary shares in the form of American Depositary Shares, with an aggregate gross sales price of up to US$75.0 million.
These financing arrangements strengthen Opthea’s strategic position to maximize the value of OPT‑302 and further validate
our commitment to bring OPT‑302 to wet AMD patients, a disease for which there remains significant unmet medical need
despite the availability of therapies that selectively target VEGF‑A. Opthea expects to use the net proceeds from the non‑dilutive
financing and the private placement, together with its existing cash and cash equivalents, to continue advancing the clinical
development of OPT‑302 for the treatment of wet AMD, including the Phase 3 clinical trials, and anticipates that any remaining
proceeds will fund pre‑commercialization activities, including commercial scale manufacturing, team build and market shaping,
as well as for working capital and general corporate purposes. Opthea believes its current cash and cash equivalents, together
with the net proceeds from these transactions, will be sufficient to fund its operations and research and development expenses
through at least the fourth calendar quarter of 2024.
The amounts and timing of Opthea’s expenditures will depend upon and have been impacted in the past, and may continue to be
impacted by, numerous factors, including the results of its research and development efforts, the timing and success of ongoing
clinical trials or clinical trials that Opthea may commence in the future, the timing of regulatory submissions, the performance
and cost efficiency of third parties that assist Opthea with clinical development, including clinical research organizations (“CROs”),
and the continuing impacts of the COVID‑19 pandemic and macroeconomic challenges. Opthea has based its beliefs and
expectations stated above on assumptions that may prove to be wrong, including due to the continued uncertainty relating
to the COVID‑19 pandemic and related macroeconomic challenges. Opthea may also experience future delays in its clinical
development or commercialization of OPT‑302 for any indication, including due to the factors and conditions set forth above or
other factors that Opthea cannot presently anticipate, and may use its available capital resources sooner than Opthea currently
expects. Opthea will require additional funding to reach commercialization of OPT‑302 in any indication, including wet AMD.
In addition, Opthea may require additional external funding to meet the minimum cash condition under the non‑dilutive financing
agreement, including prior to the expected readout of top‑line results for Opthea’s Phase 3 clinical trials.
Over the past 12 months, Opthea has worked to broaden Opthea’s geographical reach by expanding its operations and
building a US‑based team of senior executives. In January 2022, Ms. Judith Robertson was appointed as the Company’s first
Chief Commercial Officer (CCO), after having formerly served as a non‑executive member of the Opthea Board of Directors.
This appointment was followed by the appointment of Dr. Joel Naor, MD, as Chief Medical Officer (CMO) in March 2022, and
the subsequent appointment of several executives in Opthea’s manufacturing, clinical operations and commercial divisions.
21
Directors’ Report (cont.)
In addition, over the past 12 months, the Company further expanded its Board of Directors, which included welcoming
Mr. Quinton Oswald and Dr. Susan Orr who have deep experience leading biotechnology companies and launching commercial
products for the treatment of wet AMD and other ophthalmic diseases.
Significant changes in the state of affairs
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.
Impact of CoVID‑19
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. 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 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. As previously disclosed, Opthea’s efforts to
advance its Phase 3 clinical trials, including clinical trial activations and trial site engagements, have been challenged in part
by the COVID‑19 pandemic and administrative delays. In particular, Opthea has incurred and experienced, and may continue
to incur and experience in the future, significantly increased costs and delays in connection with the activities conducted by
third‑party CROs and other third parties to prepare for and progress Opthea’s Phase 3 clinical trials.
Future developments
• Opthea’s key objective over the next 12 months is to advance the ShORe and COAST Phase 3 clinical trials by continuing
patient recruitment into the trials globally, with the objective of completing patient recruitment by mid‑CY 2023.
• To achieve this objective, Opthea will continue to engage with clinical trial sites, investigators and the clinical ophthalmology
community and focus on robust trial execution to reach our objective of topline data readout mid‑CY 2024.
• Over the following 12 months, we will also continue to raise the awareness of the commercial potential inherent in OPT‑302
for the treatment of serious retinal diseases. Opthea will also continue to expand its management team and presence at
international investment and clinical ophthalmology conferences and symposia, progress cGMP manufacturing activities of
OPT‑302 to support future commercial efforts and initiate pre‑commercial activities to position OPT‑302 as a promising
therapeutic for the treatment of wet AMD.
22
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Significant events after balance date
DEVELOPMENT AGREEMENT AND PIPE FUNDING
On August 12, 2022 (the “Effective Date”), Opthea Limited (“Opthea”) entered into a Development Funding Agreement (the
“Agreement”) with Ocelot SPV LP (“Investor”), an affiliate of Carlyle and Abingworth, working together with Carlyle and Abingworth’s
recently formed development company Launch Therapeutics, pursuant to which Investor agrees to provide funding to Opthea
to support its development of OPT‑302 for the treatment of wet (neovascular) age‑related macular degeneration (“wet AMD”).
Pursuant to the Agreement, Investor has committed to provide Opthea US$120 million in funding which may be increased up to
US$170 million at Investor’s option, of which US$50 million will be paid shortly after Opthea receives the proceeds from the first
tranche of the PIPE (as defined below), with the remainder being funded in two additional tranches to be paid on December 31, 2022
and December 31, 2023, respectively. Pursuant to the Agreement, Opthea will be required to use commercially reasonable efforts
to develop OPT‑302 for the treatment of wet AMD in accordance with the Agreement, including pursuant to certain
development timelines set forth therein.
In return, Opthea will pay to Investor (1) upon the first to occur of regulatory approval of OPT‑302 for the treatment of wet AMD
in the United States, United Kingdom or European Union (“Regulatory Approval”), fixed payments equal to a total of approximately
two times the funding provided, consisting of seven payments, with the first payment due shortly after Regulatory Approval and
the remaining six payments payable over a six‑year period thereafter, and (2) variable payments equal to 7% of net sales of OPT‑302
for the treatment of wet AMD for each calendar quarter.
At the time that Investor receives an aggregate of four times the funding provided (US$680 million if Investor funds the full
US$170 million under the Agreement) (the “Cap”), Opthea’s payment obligations under the Agreement will be fully satisfied.
Opthea has the option to satisfy its payment obligations to Investor upon Regulatory Approval or a change of control of Opthea
by paying an amount equal to the present value of the remaining payments payable to Investor subject to a mid‑single‑digit
discount rate. Opthea also has an option to buy out the remaining payments at any time by paying an amount equal to the
remaining payments due subject to a proposed discount rate, which Investor may accept or reject. Upon a change of control
of Opthea, an acceleration payment of a specified multiple of the funding provided is payable, net of payments already made
to Investor and creditable against future payments to Investor.
Opthea will grant Investor a security interest in all of its assets (other than intellectual property not related to OPT‑302).
The security interest will terminate when Investor receives payments and/or change of control acceleration payments equal
to two times the funding provided or upon certain terminations of the Agreement (the “Release Date”). The Agreement also
includes customary representations and warranties and covenants, including certain negative covenants regarding limitations
on incurrence of indebtedness, liens, investments, restricted payments, sales of assets, and royalty sales. The negative covenants
will terminate upon the Release Date.
The Agreement terminates upon the payment of all payments owing to Investor, unless earlier terminated by Investor if:
• Opthea fails to comply with certain covenants and agreements set forth in the Agreement, including failure to make
required payments or develop OPT‑302 as set forth in the Agreement;
• Opthea suffers a material adverse event;
•
•
•
there is a material adverse patent impact on Opthea’s intellectual property covering OPT‑302;
there are certain irresolvable disagreements within the joint steering committee overseeing Opthea’s development of OPT‑302;
the security interests of Opthea are invalidated or terminated other than as set forth in the Agreement; or
• any Phase 3 clinical trial of OPT‑302 is completed or terminated and (1) the primary endpoint is not met or (2) Investor
reasonably determines that the results of any such trial do not support regulatory approval.
The Agreement may also be earlier terminated by Opthea if Investor fails to fund as provided in the Agreement. The Agreement
may be terminated by either party (i) if the other party materially breaches the Agreement (“Material Breach”), (ii) if OPT‑302 fails
to receive regulatory approval in the United States or European Union, (iii) upon the bankruptcy of the other party, (iv) if a serious
safety concern arises in an OPT‑302 clinical trial or (v) upon a change of control of Opthea.
23
Directors’ Report (cont.)
In certain instances, upon the termination of the Agreement, Opthea will be obligated to pay Investor a multiple of the amounts
paid to Opthea under the Agreement, including specifically,
• up to the Cap in the event that Investor terminates the agreement due to (w) failure by Opthea to comply with certain
covenants and agreements set forth in the Agreement, including failure to make required payments or develop OPT‑302
as set forth in the Agreement, (x) the bankruptcy of Opthea, (y) a safety concern resulting from gross negligence on the part
of Opthea or due to a safety concern that was material on the Effective Date and the material data showing such safety
concern was not publicly known, disclosed to Investor, or in the diligence room made available to Investor or (z) the security
interests of Investor being invalidated or terminated other than as set forth in the Agreement;
• several multiples of such amounts in the event the Agreement is terminated due to Material Breach by Opthea; and
• a small multiple of such amounts in the event of certain irresolvable disagreements within the executive review committee
overseeing Opthea’s development of OPT‑302.
In addition, if following certain events of termination of the Agreement, Opthea continues to develop OPT‑302 for the treatment
of wet AMD and obtains Regulatory Approval, it will make the payments to Investor as if the Agreement had not been terminated,
less any payments made upon termination.
The Agreement also provides that Opthea will use reasonable best efforts to complete a private placement of its ordinary shares
or American Depositary Shares ("ADS’s") representing its ordinary shares (at a ratio of 8 ordinary shares per ADS) for gross proceeds
of at least US$70 million, which Opthea expects will be satisfied through the PIPE (as described below).
The Agreement also includes a minimum cash requirement, and Opthea may need to obtain additional funding to meet this
requirement in the future, including prior to the expected readout of top‑line results for its Phase 3 clinical trials. To the extent
that Opthea raises additional capital through the sale of equity or convertible debt securities to meet this requirement, Opthea’s
equity holders will be diluted.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by the full text
of the Agreement, a copy of which will be filed as an exhibit to Opthea’s Annual Report on Form 20‑F for the fiscal year ended
June 30, 2022, which will be subsequently filed with the Securities and Exchange Commission.
Concurrently with the execution of the Agreement, Opthea entered into binding commitments for the private placement
of ordinary shares to be issued pursuant to Regulation S under, and Section 4(a)(2) of, the Securities Act of 1933, as amended
(the “Securities Act”), as the case may be, for aggregate gross proceeds of approximately US$90 million (the “PIPE”) and a price
per ordinary share of AU$1.15 (approximately US$0.81).
The PIPE consists of two tranches. The first tranche will be for AU$60.7 million (US$41.9 million), or 52.8 million ordinary shares,
which amount represents the amount of new ordinary shares that Opthea may currently issue without obtaining shareholder
approval under ASX Listing Rules. The first tranche was received on August 24, 2022. Opthea will use reasonable best efforts to
obtain shareholder approval to issue and consummate the second tranche, which will be for US$47.5 million, or 59 million shares.
Opthea expects to issue a Notice of Meeting to its shareholders to convene a general meeting of shareholders expected in
September 2022 to obtain shareholder approval to issue and consummate the second tranche.
APPROVAL OF ADVANCED OVERSEAS FINDING CERTIFICATE
On August 29, 2022, the Company obtained an Advanced Overseas Finding Certificate from AusIndustry for additional overseas
research activities for OPT‑302. This is a non‑adjusting subsequent event.
Besides the above‑mentioned subsequent events, there are no other significant events after June 30, 2022, to report.
24
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Directors’ Report (cont.)
environmental regulations
The Company is not subject to significant environmental regulations.
Indemnification and insurance
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.
The Company has insured its directors, the company secretary and executive officers for the financial year ended June 30, 2022.
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.
Directors’ meetings
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.
Meetings of committees
Directors’
meetings
Audit & risk
Nomination
Remuneration
Number of meetings held
Number of meetings attended:
Jeremy Levin
Michael Sistenich
Lawrence Gozlan
Daniel Spiegelman
Julia Haller (appointed June 1, 2021)
Judith Robertson (appointed June 1, 2021,
resigned January 1, 2022)
Susan Orr (appointed April 21, 2022)
Quinton Oswald (appointed April 21, 2022)
Megan Baldwin
2
2
2
2
7
7
7
7
7
7
4
1
1
7
7
6
7
6
7
4
5
1
1
7
5
3
5
5
3
5
3
3
25
Directors’ Report (cont.)
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
Lawrence Gozlan
Lawrence Gozlan
(appointed February 24, 2022)
Judith Robertson
(resigned January 1, 2022)
Daniel Spiegelman
Julia Haller
–
Auditor’s independence declaration
The directors have obtained a declaration of independence from Deloitte Touche Tohmatsu, the Company’s auditors, which
is set out on page 85 and forms part of the directors’ report for the financial year ended June 30, 2022.
proceedings on behalf of the company
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.
Remuneration report – audited
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, 2022. 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)
Julia Haller
Daniel Spiegelman
Michael Sistenich
Lawrence Gozlan
Susan Orr (appointed April 21, 2022)
Quinton Oswald (appointed April 21, 2022)
Judith Robertson (resigned January 1, 2022)
26
Chairman,
Non‑executive director
Non‑executive director
Non‑executive director
Non‑executive director
Non‑executive director
Non‑executive director
Non‑executive director
Non‑executive director
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
executive officers
Megan Baldwin
Karen Adams
Chief Executive Officer and Managing Director
Vice President Finance and Company Secretary
Judith Robertson (appointed January 1, 2022)
Chief Commercial Officer
Joel Naor (appointed March 1, 2022)
Chief Medical Officer
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, 2022, 37.9% of the directors and 53.9% 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 2022 or 2021.
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.
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 2022 financial year in August 2022. Based on the achievement
of operational objectives in the financial year, the remuneration committee has determined there will be US$261,456 STI bonus
paid to KMP for the 2022 financial year (2021: US$244,145).
Long Term Incentive Plan (LTIP): The objective of the LTIP is to reward KMP in a manner that aligns this element of compensation
with the creation of shareholder wealth. LTIP grants are made to KMP and employees who are able to influence the generation
of shareholder wealth and have a direct impact on the Company’s performance and development. Option vesting conditions
are based on continued service to the Company by the KMP.
27
Directors’ Report (cont.)
The Company implemented an LTIP to attract, retain and motivate eligible employees, essential to the continued growth and
development of the Company. The LTIP was approved by shareholders at the Company’s 2014 AGM. The limit of the Company’s
share capital to be granted under the LTIP was increased to 10% at the 2016 EGM.
CONSEQUENCES OF PERFORMANCE ON SHAREHOLDER WEALTH
In considering the Company’s performance and benefits for shareholder wealth, the remuneration committee have regard to
operational contributions and the following indices in respect of the current and previous four financial years. Due to the change
in functional currency and presentation currency in the current year, the current and prior year has been restated to US currency
with the remaining years remaining in AU$. Refer to Note 3 Change in presentation and functional currencies for more
information in regard to the determination of the change.
2022
US$
2021
US$
2020
A$
2019
A$
2018
A$
Revenue including finance income
326,151
440,615
539,514
914,840
1,143,822
Loss before tax
Tax benefit
Loss after tax
(99,116,657)
(50,283,342)
(16,831,966)
(35,547,034)
(28,919,488)
6,299,286
4,938,846
5,708,767
14,636,973
12,017,248
(92,817,371)
(45,344,496)
(11,123,199)
(20,910,061)
(16,902,240)
2022 and 2021 is US$ with remaining years presented in AU$. Refer to Note 3 Change in presentation and functional currencies.
Basic loss per share
Net Tangible Asset (NTA)
backing per share @ June 30
Opthea share price @ June 30
2022
US$
(0.26)
0.20
A$1.10
2021
US$
(0.14)
2020
A$
(0.04)
2019
A$
(0.09)
2018
A$
(0.04)
0.58
A$1.34
0.17
A$2.36
0.12
A$0.67
0.19
A$0.53
Change in share price is one of the financial performance targets considered in setting STI.
SERVICE CONTRACTS
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 AU$470,422 per annum from July 1, 2021.
• 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.
28
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
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’s 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.
Judith Robertson, Chief Commercial Officer, has an ongoing contract and employment is at will. The Company may terminate the
employment without cause which provides a severance payment of 12 months base salary, 12 months of health cover costs.
The Company may terminate Judith Robertson’s 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.
Joel Naor, Chief Medical Officer, has an ongoing contract and employment is at will. The Company may terminate the
employment without cause which provides a severance payment of 12 months base salary, 12 months of health cover costs.
The Company may terminate Joel Naor’s 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.
NON‑EXECUTIVE DIRECTORS
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 AU$65,700 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/AU$13,140, and general committee fees of US$5,000/AU$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.
29
Directors’ Report (cont.)
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:
Short
term
Salary
& Fees
US$
Cash
bonus1
US$
post‑
employ‑
ment
Super-
annu-
ation
US$
–
–
–
2,046
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,046
long
term
Long
Service
Leave
US$
termin‑
ation
benefits
Shared
based
payment
Termin-
ation
Pay
US$
Options
US$
Total
US$
Total
perfor-
mance
related
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
858,286
933,286
– 1,158,465 1,212,497
–
–
–
–
–
–
–
–
–
–
23,580
73,789
64,344
586,271
656,472
– 1,252,173 1,312,589
–
696,217
771,217
– 1,487,000 1,551,583
–
–
–
–
–
–
–
–
587,694
642,694
–
4,250
128,010
137,593
–
–
128,010
137,593
–
–
358,633
386,133
–
4,250
– 3,343,121 3,738,777
– 3,897,638 4,173,093
92%
96%
0%
0%
0%
0%
89%
95%
90%
96%
91%
0%
93%
0%
93%
0%
93%
0%
89%
93%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
non‑executive directors:
Jeremy Levin
2022
2021
Geoffrey Kempler2
2022
Michael Sistenich
Lawrence Gozlan3
2021
2022
2021
2022
2021
Daniel Spiegelman4
2022
75,000
54,032
–
21,534
73,789
64,344
70,201
60,416
75,000
64,583
55,000
4,250
9,583
–
9,583
–
27,500
4,250
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
395,656
2021
273,409
Julia Haller5
Susan Orr6
Quinton Oswald7
Judith Robertson8
Sub‑total
Non‑executive
directors
30
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Short
term
Salary
& Fees
US$
Cash
bonus1
US$
post‑
employ‑
ment
Super-
annu-
ation
US$
long
term
Long
Service
Leave
US$
termin‑
ation
benefits
Shared
based
payment
Termin-
ation
Pay
US$
Options
US$
Total
US$
Total
perfor-
mance
related
%
executive directors:
Megan Baldwin
2022
2021
342,510
113,475
34,251
338,618
147,166
45,666
other Key Management personnel:
Karen Adams9
2022
2021
211,035
27,981
21,104
31,039
–
2,949
Judith Robertson8
2022
195,000
78,000
2021
–
–
–
–
Joel Naor10
2022
150,000
42,000
750
Mike Tonroe11
2021
2022
2021
–
–
–
–
–
–
237,535
71,314
28,889
totals
2022 1,294,201
261,456
56,105
2021
880,601
218,480
79,550
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
730,644 1,220,880
–
531,450
119,147
379,267
–
33,988
229,060
502,060
–
–
242,795
435,545
–
–
–
–
–
337,738
– 4,664,767 6,276,529
– 3,897,638 5,076,269
76%
28%
39%
0%
61%
–%
65%
–%
–%
21%
80%
81%
1. Bonuses are paid in the financial year following the year in which they are earned.
2. Director resigned October 12, 2020.
3. Lawrence Gozlan was appointed as a non‑executive director on July 24, 2020. Mr. Gozlan’s annual director fee is AU$65,700.
4. Director appointed September 10, 2020.
5. Director appointed June 1, 2021.
6. Director appointed April 21, 2022.
7. Director appointed April 21, 2022.
8. Director resigned January 1, 2022, appointed CCO January 1, 2022.
9. Appointed June 15, 2021.
10. Appointed CMO March 1, 2022.
11. Resigned June 24, 2021.
31
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
Julia Haller
Judith Robertson
Susan Orr
Quinton Oswald
Karen Adams
During the financial year
Number
of options
granted
2,000,000
2,000,000
1,000,000
1,000,000
800,000
Number
of options
vested12
500,000
500,000
250,000
250,000
200,000
Options Granted during the year have the following Fair values at Grant date, US$0.705 (AU$0.526), US$0.535 (AU$0.397)
and US$0.675 (AU$0.937) with the following exercise price US$0.948 (AU$1.27), US$0.755 (AU$1.01) and US$1.46 (AU$2.03),
for Julia and Judith, Susan and Quinton and Karen Adams, 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.
PERFORMANCE RIGHTS OVER EQUITY INSTRUMENTS GRANTED AS COMPENSATION
Details of performance rights over ordinary shares in the Company that were granted as compensation to KMP during the
reporting period and details of rights that vested during the reporting period are as follows:
Name
Megan Baldwin
During the financial year
Number
of options
granted
Number
of options
vested
1,600,000
69,589
Performance rights granted during the year have the following Fair value at Grant date US$0.955 (AU$1.28) with a nil exercise
price. All rights have an expiry of 10 years or termination date of the individual’s employment. Rights vesting is conditional on
performance hurdles and being employed or in office.
12. Options that are vested during the financial year were originally granted in the year ended June 30, 2022.
32
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
AMERICAN DEPOSITORY SECURITY OPTIONS OVER EQUITY INSTRUMENTS GRANTED
AS COMPENSATION
Details of American depository security options over ordinary shares in the Company that were granted as compensation
to KMP during the reporting period and details of ADS options that vested during the reporting period are as follows:
Name
Joel Naor
During the financial year
Number
of options
granted
300,000
Number
of options
vested
–
American depository securities options granted during the year have the following fair value at grant date US$4.116 with
an exercise price of US$6.01. All ADS options have an expiry of 10 years or termination date of the individual’s employment.
ADS options vesting is conditional on the individual being employed or in office.
EXERCISE OF OPTIONS GRANTED AS COMPENSATION
During 2021, 5,845,804 shares were issued to KMP on the exercise of 8,400,000 of options previously granted as compensation.
During 2021, 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 AU$1.672 for 7,000,000 options and AU$1.647
for 1,400,000 options and an exercise price of AU$0.48 for 7,800,000 options and AU$0.855 for 600,000 options.
Name
No. of
ordinary
shares
of Opthea
Limited issued
No. of
options
exercised
Issue date
Amount
unpaid
Expiry date
of Rights
Megan Baldwin
4,000,000
2,851,675
March 7, 2016
Geoffrey Kempler
2,000,000
1,425,837
March 7, 2016
Michael Sistenich
1,000,000
Mike Tonroe
Mike Tonroe
800,000
600,000
712,919
566,849
288,524
March 7, 2016
March 31, 2016
April 3, 2019
$nil
$nil
$nil
$nil
$nil
March 7, 2021
March 7, 2021
March 7, 2021
January 1, 2022
April 3, 2023
8,400,000
5,845,804
33
Directors’ Report (cont.)
DETAILS OF OPTIONS AFFECTING CURRENT AND FUTURE REMUNERATION
Details of vesting profiles of the options held by each KMP of the Company are:
Number
of options
Grant date
% Vested
%
Forfeited13
Financial
years in which
grant vests
Vesting
conditions
Megan Baldwin
1,320,000
March 7, 2016
1,320,000
March 7, 2016
1,360,000
March 7, 2016
3,000,000 November 29, 2018
Jeremy Levin
750,000
January 19, 2021
750,000
January 19, 2021
750,000
January 19, 2021
750,000
January 19, 2021
Geoffrey Kempler
660,000
March 7, 2016
Michael Sistenich
660,000
680,000
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
Daniel Spiegelman
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%
Lawrence Gozlan
500,000
October 12, 2020
100%
500,000
October 12, 2020
500,000
October 12, 2020
500,000
October 12, 2020
0%
0%
0%
Julia Haller
500,000
October 19, 2021
100%
Susan Orr
500,000
October 19, 2021
500,000
October 19, 2021
500,000
October 19, 2021
0%
0%
0%
250,000
250,000
250,000
250,000
April 24, 2022
100%
April 24, 2022
April 24, 2022
April 24, 2022
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
July 1, 2015 Continued service
July 1, 2016
July 1, 2017
July 1, 2019
July 1, 2020 Continued service
July 1, 2021
July 1, 2022
July 1, 2023
July 1, 2015 Continued service
July 1, 2016
July 1, 2017
July 1, 2019
July 1, 2015 Continued service
July 1, 2016
July 1, 2017
July 1, 2019
July 1, 2020 Continued service
July 1, 2021
July 1, 2022
July 1, 2023
July 1, 2020 Continued service
July 1, 2021
July 1, 2022
July 1, 2023
July 1, 2021 Continued service
July 1, 2022
July 1, 2023
July 1, 2024
July 1, 2022 Continued service
July 1, 2023
July 1, 2024
July 1, 2025
13. 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.
34
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Quinton Oswald
Karen Adams
Number
of options
250,000
250,000
250,000
250,000
200,000
200,000
200,000
200,000
Grant date
% Vested
April 24, 2022
100%
April 24, 2022
April 24, 2022
April 24, 2022
0%
0%
0%
June 6, 2022
100%
June 6, 2022
June 6, 2022
June 6, 2022
0%
0%
0%
%
Forfeited13
Financial
years in which
grant vests
Vesting
conditions
0%
0%
0%
0%
0%
0%
0%
0%
July 1, 2022 Continued service
July 1, 2023
July 1, 2024
July 1, 2025
July 1, 2022 Continued service
July 1, 2023
July 1, 2024
July 1, 2024
DETAILS OF PERFORMANCE RIGHTS AFFECTING CURRENT AND FUTURE REMUNERATION
Details of vesting profiles of the Performance rights held by each KMP of the Company are:
Number
of rights
Grant date
% Vested
% Forfeited14
Megan Baldwin
100,000 October 19, 2021
100%
100,000 October 19, 2021
100,000 October 19, 2021
150,000 October 19, 2021
150,000 October 19, 2021
400,000 October 19, 2021
400,000 October 19, 2021
200,000 October 19, 2021
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Financial
years in which
grant vests
Vesting
conditions
July 1, 2022 Continued service
July 1, 2023 Continued service
July 1, 2024 Continued service
July 1, 2024
July 1, 2024
July 1, 2024
July 1, 2024
July 1, 2024
KPIs
KPIs
KPIs
KPIs
KPIs
DETAILS OF ADS OPTIONS AFFECTING CURRENT AND FUTURE REMUNERATION
Details of vesting profiles of the ADS options held by each KMP of the Company are:
Number of
ADS options
Grant date
% Vested
% Forfeited15
Financial
years in which
grant vests
Vesting
conditions
Joel Naor
75,000
March 1, 2023
6,250 monthly
for 36 months
April 1, 2023 –
Mar 1, 2026
0%
0%
0%
July 1, 2022 Continued service
July 1, 2023
– 2026
0%
14. 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.
15. 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.
35
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
2022 3,000,000
2021
7,000,000
Jeremy Levin
2022 3,000,000
–
–
–
2021
–
3,000,000
Geoffrey Kempler16 2022
1,500,000
2021
3,500,000
Daniel Spiegelman 2022
2,000,000
–
–
–
2021
–
2,000,000
Lawrence Gozlan
2022
2,000,000
–
2021
–
2,000,000
Michael Sistenich
2022
1,500,000
2021
2,500,000
Julia Haller
Susan Orr
Quinton Oswald
2022
2021
2022
2021
2022
2021
other executives:
Mike Tonroe17
2022
–
–
–
–
–
–
2021
1,400,000
–
–
2,000,000
–
1,000,000
–
1,000,000
–
–
–
Karen Adams
2022
2021
Judith Robertson
2022
2021
–
–
–
–
800,000
–
2,000,000
–
total
2022 13,000,000
6,800,000
Options
exercised
–
(4,000,000)
–
–
–
(2,000,000)
–
–
–
–
–
(1,000,000)
–
–
–
–
–
–
–
(1,400,000)
–
–
–
–
–
2021 14,400,000
7,000,000
(8,400,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Held at
June 30
3,000,000
3,000,000
Vested
during
the year
Vested and
exercisable
–
–
3,000,000
3,000,000
3,000,000
750,000
1,500,000
3,000,000
750,000
750,000
1,500,000
1,500,000
–
–
1,500,000
1,500,000
2,000,000
500,000
1,000,000
2,000,000
500,000
500,000
2,000,000
500,000
1,000,000
2,000,000
500,000
500,000
1,500,000
1,500,000
–
–
1,500,000
1,500,000
2,000,000
500,000
500,000
–
–
–
1,000,000
250,000
250,000
–
–
–
1,000,000
250,000
250,000
–
–
0
–
–
0
–
–
0
800,000
200,000
200,000
–
–
–
2,000,000
500,000
500,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 19,800,000
3,450,000 11,200,000
– 13,000,000
1,750,000
7,750,000
16. Geoffrey Kempler resigned October 12, 2020.
17. Mike Tonroe resigned at June 24, 2021. All options had been converted prior to his resignation.
36
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Number of
performance
rights
Megan Baldwin
Total
Number of
ADS options
Joel Naor
Total
2022
2021
2022
2021
2022
2021
2022
2021
Held at
July 1
–
–
–
–
Held at
July 1
–
–
–
–
Granted as
compen-
sation
1,600,000
–
–
Granted as
compen-
sation
300,000
–
300,000
–
Rights
exercised
Lapsed
Forfeited
Held at
June 30
Vested
during
the year
Vested and
exercisable
–
–
–
–
ADS
options
exercised
–
–
–
–
–
–
–
–
–
–
–
–
1,600,000
69,589
69,589
–
–
–
1,600,000
69,589
69,589
–
–
–
Lapsed
Forfeited
–
–
–
–
–
–
–
–
Held at
June 30
300,000
–
300,000
–
Vested
during
the year
Vested and
exercisable
–
–
–
–
–
–
–
–
37
Directors’ Report (cont.)
Key management personnel transactions
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
Balance at
beginning of
period July 1
Granted as
remuneration
On Exercise
of Quoted
Options
Purchased in
the year
Sold during
the year
Balance at
end of period
June 30
Jeremy Levin
Geoffrey Kempler18
Michael Sistenich
Daniel Spiegelman
Lawrence Gozlan
Julia Haller
Susan Orr
Quinton Oswald
Judith Robertson
(resigned
January 1, 2022)
executives
Megan Baldwin
Karen Adams
Judith Robertson
Joel Naor
Mike Tonroe19
total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
–
–
2,326,797
900,960
1,233,097
520,178
–
–
1,877,357
–
–
–
–
–
–
–
–
–
3,839,398
987,723
–
–
–
–
–
–
–
–
9,276,649
2,408,861
18. Geoffrey Kempler resigned as at October 12, 2020.
19. Mike Tonroe resigned as at June 24, 2021.
38
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,425,837
–
712,919
–
–
–
–
–
–
–
–
–
–
–
–
–
2,851,675
–
–
–
–
–
–
–
855,373
–
–
–
–
–
–
–
–
–
–
1,877,357
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(855,373)
–
–
2,326,797
2,326,797
1,233,097
1,233,097
–
–
1,877,357
1,877,357
–
–
–
–
–
–
–
–
3,839,398
3,839,398
–
–
–
–
–
–
–
–
–
9,276,649
5,845,804
1,877,357
(855,373)
9,276,649
Directors’ Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
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, 2022.
For and on behalf of the board:
Megan Baldwin
CEO & Managing Director
Opthea Limited
Melbourne
August 30, 2022
39
Management Team
Megan Baldwin
PhD, MAICD
Chief Executive Officer
and Managing Director
Karen Adams
B.BUS, CPA, GAICD, FCG, FGIA
Vice President Finance
and Company Secretary
Joel naor
MD, MBA, MSc
Chief Medical
Officer
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.
Dr. Joel Naor was appointed Chief
Medical Officer of Opthea in
March 2022.
Dr. Joel Naor has over two decades of
experience leading clinical development
programs that target retina conditions
encompassing biologics, small molecules,
sustained release technologies, stem
cells and photodynamic therapy.
In his most recent role, he served as
Vice President of Clinical Science and
Development Operations at Kodiak
Sciences Inc. Previously, Dr. Naor was
the Chief Medical Officer for Macusight,
Inc. until the company was acquired by
Santen Inc. in 2010, and subsequently
served as Vice President and Head of
Global Medical Affairs for Santen Inc.
He has also held leadership positions
at Allergan Inc., QLT Inc. and Stem
Cells Inc. Dr. Joel Naor received his
Doctor of Medicine (M.D.) from
the Technion – Israel Institute of
Technology and completed training
in Ophthalmology at the University
of Toronto. He holds a Master of
Science (MSc.) in Epidemiology from
the University of Toronto and a Master
of Business Administration (M.B.A.) from
Simon Fraser University in Vancouver.
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.
40
Management Team (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Judith Robertson
Chief Commercial
Officer
Mike Gerometta
PhD
Head of CMC Development
Mark o’ neill
MSc, B. Chem Eng
Vice President CMC
Judith Robertson was appointed Chief
Commercial Officer of Opthea in
January 2022.
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 BA with
honors from Ryerson University,
Canada. She also holds an MBA
from Northwestern University,
Kellogg School of Management.
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.
Mark O’Neill was appointed Vice
President CMC in January 2022.
Mr. O’Neill was most recently head of
Process Development for Avexis Gene
therapies where he orchestrated all
product development and technical
operations activities pertaining to the
startup and licensure of Zolgensma
drug substance manufacturing at the
Colorado site. Prior to Avexis, he was
Vice President and General Manager
of the Thermo Fisher Groningen Single
Use Biologics Manufacturing Facility in
Groningen, The Netherlands, where he
oversaw all operations including startup
of commercial manufacturing and initial
commercial licensure at the facility.
Mr. O’Neill has over 30 years of
experience in the manufacturing of
biopharmaceuticals including 20 years
with Amgen where he gained extensive
experience in all aspects of lifecycle
management including Quality,
Engineering, Production, Development,
Supply Chain and Business Development.
Mark holds a Master of Science Degree
from Colorado School of Mines in
Environmental and Chemical Engineering
and a Bachelor’s of Science Degree
in Chemical Engineering from the
University of Colorado.
41
Management Team (cont.)
Ian leitch
PhD
Director – Clinical Research
Clare price
BPHARM
Director of Clinical Development
Annette leahy
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.
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.
42
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Financial Report
CONTENTS
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated
Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
ASX Additional Information
Corporate Directory
44
45
46
47
48
84
85
86
91
93
43
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended June 30, 2022
Revenue
Other income
Research and development expenses
Patent expenses
Intellectual property costs
Administrative expenses
Occupancy expenses
Finance income – interest income
Net foreign exchange 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 year, 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:
Note
7
8
9
2022
US$
90,683
108,322
2021
US$
68,613
26,950
(78,654,217)
(25,891,851)
(131,788)
(137,666)
(28,713)
(291,235)
10
(17,901,112)
(13,399,748)
(21,307)
(18,445)
235,468
372,001
(2,813,993)
(11,011,961)
11
12
(99,116,657)
(50,283,342)
13
6,299,286
4,938,846
(92,817,371)
(45,344,496)
–
–
469,767
469,767
(92,817,371)
(44,874,729)
23
(92,817,371)
(45,344,496)
(92,817,371)
(45,344,496)
(92,817,371)
(44,874,729)
(92,817,371)
(44,874,729)
– Basic and diluted loss per share (cents)
14
(26.40)
(14.15)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
44
Consolidated Statement of Financial Position
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
At June 30, 2022
Assets
Current assets
Cash and cash equivalents
Current tax receivable
Receivables
Prepayments
total current assets
non‑current assets
Plant and equipment
Right‑of‑use asset
Prepayments
total non‑current assets
total assets
liabilities
Current liabilities
Payables
Lease liabilities
Provisions
total current liabilities
non‑current liabilities
Provisions
total non‑current liabilities
total liabilities
net assets
equity
Contributed equity
Pre‑funded warrants
Accumulated losses
Reserves
total equity
Note
2022
US$
2021
US$
15
13
16
17
18
44,631,293
118,193,177
6,299,286
4,972,898
257,668
565,286
8,720,195
14,386,155
59,908,442
138,117,516
28,082
–
110,295
138,377
23,259
93,852
174,541
291,652
60,046,819
138,409,168
19
11,445,498
2,501,518
–
20
596,203
112,965
492,002
12,041,701
3,106,485
21
22
22
23
23
27,974
27,974
16,915
16,915
12,069,675
3,123,400
47,977,144
135,285,768
235,277,217
234,147,526
–
–
(216,941,353)
(124,123,982)
29,641,280
25,262,224
47,977,144
135,285,768
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
45
Consolidated Statement of Changes in Equity
For the year ended June 30, 2022
Contributed
equity
US$
Pre-funded
warrants
US$
Note
Share-based
payments
reserve
US$
Fair value of
investments
reserve
US$
FX
translation
reserve
US$
Accumulated
losses
US$
Total equity
US$
As at July 1, 2020
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 costs
$10,126,959
Issuance of ordinary
shares and pre‑funded
warrants net of issuance
costs $1,099,412
Exchange on conversion
113,852,364
23
23
–
–
–
–
22
3,271,542
–
–
–
–
–
–
22 105,477,591
11,546,029
11,546,029
(11,546,029)
22
23
–
Balance at June 30, 2021
234,147,526
As at July 1, 2021
Loss for the year*
Total comprehensive
income and expense
for the period
Recognition of
share‑based payment
234,147,526
–
–
–
23
Issue of ordinary shares
on the exercise of options
22
1,129,691
Balance at June 30, 2022
235,277,217
*Amounts are after tax.
3,116,080
551,409
5,827,605
(78,779,486)
44,567,972
–
–
–
469,767
–
469,767
3,897,638
(3,271,542)
–
–
–
_
–
–
–
–
–
–
–
–
–
345,474
64,235
14,261,558
–
469,767
(45,344,496)
(45,344,496)
(45,344,496)
(44,874,729)
–
–
3,897,638
–
– 117,023,620
–
–
–
14,671,267
4,087,650
1,085,411
20,089,163 (124,123,982) 135,285,768
4,087,650
1,085,411
20,089,163 (124,123,982) 135,285,768
–
–
5,251,572
(872,516)
–
–
–
–
–
(92,817,371)
(92,817,371)
–
–
–
(92,817,371)
(92,817,371)
–
–
5,251,572
257,175
8,466,706
1,085,411
20,089,163 (216,941,353)
47,977,144
–
–
–
–
–
–
–
–
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
46
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Consolidated Statement of Cash Flows
For the year ended June 30, 2022
Cash flows from operating activities
Interest received
Royalty and license income received
Grant and other income
Payment of lease interest
Payments to suppliers, employees and for research & development
and intellectual property costs (inclusive of GST)
Research and development tax incentive scheme credit received
Note
2022
US$
2021
US$
216,422
90,683
455,807
(5,920)
390,128
103,031
26,949
(5,782)
(77,064,842)
(51,894,593)
4,972,898
5,834,100
Net cash flows used in operating activities
26
(71,334,952)
(45,546,167)
Cash flows from investing activities
Cash received on disposal of financial asset
Purchase of plant and equipment
Net cash flows (used in)/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
–
(16,910)
(16,910)
669,184
(12,702)
656,482
(85,578)
(87,373)
–
–
105,477,591
11,546,029
Cash received for ordinary shares issued on exercise of options
22
257,175
–
Net cash flows provided by financing activities
171,597
116,936,247
Net (decrease)/increase in cash and cash equivalents
(71,180,265)
72,046,562
Effects of exchange rate changes on the balance of cash held in
foreign currencies
Cash and cash equivalents at beginning of year
(2,381,619)
3,495,757
118,193,177
42,650,858
Cash and cash equivalents at the end of the year
15
44,631,293
118,193,117
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
47
Notes to the Consolidated Financial Statements
1. Reporting entity
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. Basis of accounting
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, 2022.
GOING CONCERN
For the year ended June 30, 2022, the Group incurred a loss after income tax of $92,817,371 (2021: $45,344,496), and had net
cash outflows from operating activities of $71,334,952 (2021: $45,546,167). As at June 30, 2022, the Group had cash and cash
equivalents of $44,631,293 (2021: $118,193,177), current assets of $59,908,442 (2021: $138,117,516) and was in a net current
asset position of $47,866,741 (2021: $135,011,031).
The consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of normal
activities and realization of assets and settlement of liabilities in the normal course of business. As the Group is still in the
research and development phase, the ability of the Group to continue its development activities as a going concern is dependent
upon it deriving sufficient cash from investors.
Subsequent to June 30, 2022, on August 12, 2022, the Group entered a Development Funding Agreement (‘Agreement’) with
Ocelot SPV LP (‘Investor’), an affiliate of Carlyle and Abingworth, pursuant to which Investor has committed to provide Opthea
$120 million in funding which may be increased up to $170 million at the Investor’s option. Of this funding, $50 million will be
received by the Group in September 2022. Concurrently with the execution of the Agreement, the Group entered into binding
commitments for the private placement of ordinary shares for aggregate gross proceeds of approximately $90 million (the ‘PIPE’).
The PIPE consists of two tranches, of which the first tranche of AU$60.7 million (US$41.9 million) was received on August 24,
2022. The second tranche of $47.5 million, which is subject to shareholder approval, is expected to be issued and received in
September 2022. See Note 33, Events after the balance sheet date, for further information.
The Directors and management have considered the cash flow forecasts including the funding requirements of the business as
well as the funding raised through the Agreement and PIPE. They have also considered the Group’s key risks and uncertainties
affecting the likely development of the business, as well as the conditions set forth in the Agreement. Based on this assessment,
the Directors and management believe that the conditions in the Agreement can be met and that the Group has adequate
resources to continue normal activities and realize its assets and settle its liabilities in the normal course of business.
Accordingly, the directors have prepared the financial statements on the going concern basis.
48
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
3. Summary of accounting policies
The consolidated financial statements have been prepared using the significant accounting policies and measurement bases
summarized below.
BASIS OF MEASUREMENT
The consolidated financial statements have been prepared on a historical cost basis, except for the investments classified
as financial assets, which have been measured at fair value. All amounts are presented in United States dollars unless
otherwise stated.
FUNCTIONAL CURRENCIES
An entity’s functional currency is the currency of the primary economic environment in which the entity operates. During 2021
the Group’s operations continued to move further towards being US$ denominated and several other factors during the period
also contributed to the Group changing its functional currency during the year, such as the completion of US initial public
offering (IPO) and the NASDAQ listing in October 2020, opening a US subsidiary in May 2021 for the planned expansion into
the US, and expanding the Board of Directors with the appointment of now five 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 US capital market and all of the Group’s budgeting and planning is
conducted solely in US dollars led to the Directors determining that US dollar (US$) best represents the currency of the primary
economic environment in which the entity now operates. Accordingly, the Group changed its functional currency from Australian
dollar (AU$) to US dollar (US$) effective January 1, 2021.
PRESENTATION CURRENCY
Following the change in functional currency, the Group changed its presentation currency from Australian dollars (A$) to US$
in 2021. The change in presentation currency was made to better reflect the Group’s business activities and to enhance access
to US capital markets. Prior to the change, the Group reported its financial statements in Australian dollars (A$).
A change in presentation currency is a change in accounting policy which was accounted for retrospectively during 2021.
In making this change in presentation currency, the Group followed the requirements set out in IAS 21 The Effects of Changes
in Foreign Exchange Rates. As required by IAS 21, the consolidated statement of profit or loss and other comprehensive income
and the consolidated statement of cash flows for each period were translated into the presentation currency using the average
exchange rates prevailing during each reporting period. All assets and liabilities were translated using the exchange rates
prevailing at the consolidated statement of financial position dates. Shareholders’ equity transactions were translated using the
rates of exchange in effect as of the dates of various capital transactions. All resulting exchange differences arising from the
translation were included as a separate component of other comprehensive income. All comparative financial information were
restated to reflect the Group’s results as if they had been historically reported in US$ and the effect on the consolidated
financial statements resulted in an addition to the foreign currency translation reserve of US$14.3 million.
CHANGE IN PRESENTATION OF OTHER INCOME
The Group changed its presentation of Other income by reclassifying interest income out of Other income and into
Finance Income – interest income to better reflect the nature of the related amounts as finance income. This reclassification
had no effect on the reported results of operations.
49
Notes to the Consolidated Financial Statements (cont.)
3. Summary of accounting policies (cont.)
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries.
Control is achieved when the Company:
• Has power over the investee;
•
Is exposed, or has rights, to variable returns from its involvement with the investee; and
• Has the ability to use its power to affect its returns.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members
of the Group are eliminated in full on consolidation.
FOREIGN CURRENCY TRANSLATION
i. Functional and presentation currency
As at January 1, 2021 it was determined that the Group’s functional and presentation currency had changed from
Australian dollars to United States dollars. Therefore, the functional and presentation currency of the Group is
United States dollars (US$).
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
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.
50
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
3. Summary of accounting policies (cont.)
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
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.
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.
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.
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.
51
Notes to the Consolidated Financial Statements (cont.)
3. Summary of accounting policies (cont.)
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, 2022 and 2021, 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).
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.
52
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
3. Summary of accounting policies (cont.)
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.
During the years ended June 30, 2022 and 2021, 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 AU$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.
53
Notes to the Consolidated Financial Statements (cont.)
3. Summary of accounting policies (cont.)
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.
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.
54
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
4. Critical accounting judgments and key sources of estimation uncertainty
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, 2022
and 2021, Opthea progressed Phase 3 wet age‑related macular degeneration (wet AMD) trials. A key measure of Opthea’s
performance is the level of expenditure incurred on the research of OPT‑302.
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, 2022 and 2021.
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 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, 2022 and 2021, the Group has recognized an R&D tax incentive receivable of $6 million and
$5 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, 2022 and 2021 is based on the legislation as currently enacted as at
June 30, 2022 and 2021, respectively. Any proposed changes to the legislation, such as rate changes and eligibility requirements,
may have a retrospective impact if the legislation is passed. During the year, no such 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 done by either analogizing with AASB 112 or with AASB 120.
55
Notes to the Consolidated Financial Statements (cont.)
4. Critical accounting judgments and key sources of estimation uncertainty (cont.)
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 currency changed from Australian dollars to US dollars as disclosed
in Note 3.
The Group’s assets, liabilities and equity which were previously denominated in Australian dollars were translated into
US 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 30. 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.
56
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
5. Application of new and revised Accounting Standards
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 2020‑8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform;
• AASB 2021‑3 Amendments to Australian Accounting Standards – Covid‑19 Rent Concessions beyond 30 June 2021;
• AASB 2020‑3 Amendments to Australian Accounting Standards – Annual Improvements 2018‑2020 and Other amendments: and
• AASB 2021‑7 Amendment to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and
Editorial Corrections.
Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
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 2020‑1 Amendments to Australian Accounting Standards –
Classification of Liabilities as Current or Non‑current and AASB 2020‑6 Amendments
to Australian Accounting Standards – Classification of Liabilities as Current and Non‑current –
Deferral of Effective Dated
effective for annual reporting
periods beginning on or after
January 1, 2023
AASB 2020‑3 Amendments to Australian Accounting Standards –
Disclosure of Accounting Policies and Definition of Accounting Estimates
AASB 2020‑3 Amendments to Australian Accounting Standards –
Annual Improvements 2018‑2020 and Other Amendments
AASB 2022‑1 Amendments to Australian Accounting Standards –
Initial Application of AASB 17 and AASB 9 – Comparative Information
AASB 2021‑5 Amendments to Australian Accounting Standards –
Deferred tax related to Assets and Liabilities arising from a Single Transaction
AASB 2020‑3 Amendments to Australian Accounting Standards –
Annual Improvements 2018‑2020 and Other Amendments
January 1, 2023
January 1, 2022
January 1 2023
January 1 2023
January 1, 2022
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:
Editorial corrections
IFRS 9 Financial Instruments: Disclosures
January 1, 2022
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.
57
Notes to the Consolidated Financial Statements (cont.)
6. Segment information
The Group operates in one industry and two geographical areas, those being the biotechnology and healthcare industry
and Australia and US, 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 and prior financial years 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 $90,683 (2021: $68,613) was generated from customers based outside of Australia. The Group does not have
any major customers. All property, plant and equipment are located in Australia.
7. Revenue
Sales‑based royalties
total revenue
8. other income
Grant and other income
total other income
9. Research and development expenses
Research project costs20
total research and development expenses
2022
US$
90,683
90,683
2022
US$
108,322
108,322
2021
US$
68,613
68,613
2021
US$
26,950
26,950
2022
US$
2021
US$
78,654,217
25,891,851
78,654,217
25,891,851
20. The research project costs relate to the research programs in respect to the treatment of eye diseases by OPT‑302.
58
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
10. expenses
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
Right‑of‑use asset
total depreciation expense
Loss on disposal of non‑current assets
2022
US$
2021
US$
2,931,243
1,794,840
376,649
171,899
479,501
188,543
5,251,572
3,897,638
8,731,363
6,360,522
4,205,106
4,419,433
328,026
496,652
13,616
172,884
1,252,014
156,978
1,619,824
846,098
285,071
647,549
1,459
18,766
83,605
393,843
367,070
714,328
9,091,198
6,931,124
11,917
66,465
78,382
15,012
91,656
106,668
169
1,434
total administrative expenses
17,901,112
13,399,748
59
Notes to the Consolidated Financial Statements (cont.)
11. Finance Income
Interest income
12. net foreign exchange loss
Net foreign exchange losses
2022
US$
235,468
235,468
2021
US$
372,001
372,001
2022
US$
2021
US$
(2,813,993)
(11,011,961)
(2,813,993)
(11,011,961)
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 in fiscal year 2021 where the Company raised US$128 million, the Company entered into an Australian dollar
denominated term deposit worth US$100 million (AU$141.9 million), that matured on February 3, 2021. The Company
simultaneously entered into a foreign currency exchange contract under which the term deposit converted back to US dollars
at effectively the same foreign exchange rate as when the term deposit was entered into. As the Group’s functional currency
was the Australian dollar (AU$) until December 31, 2020, the Group recorded a foreign exchange loss of US$9 million in
relation to this transaction during the year ended June 30, 2021.
13. Income tax
(a) Income tax benefit
The major components of income tax benefit are:
Statement of Profit or Loss and Other Comprehensive Income
Current tax
Current income tax credit
Deferred tax
In respect of the current year
total income tax benefit recognized in the Statement
of profit or loss and other Comprehensive Income
(b) Current tax receivable
2022
US$
2021
US$
6,299,286
4,938,846
6,299,286
4,938,846
–
–
6,299,286
4,938,846
Research and Development Tax Incentive Credit receivable
6,299,286
4,972,898
60
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
13. Income tax (cont.)
(c) Numerical reconciliation between aggregate income tax benefit recognized in the Statement of Profit or 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% (2021: 30%)
R&D tax incentive on eligible expenses
Non‑deductible R&D expenditure
Other non‑deductible expenses – share‑based payment expense
2022
US$
2021
US$
(99,116,657)
(50,283,342)
29,734,997
15,085,003
6,299,286
4,938,846
(4,344,335)
(3,420,951)
(1,575,472)
(1,169,291)
Amount of temporary differences and carried forward tax losses not recognized
(23,815,190)
(10,494,761)
Income tax benefit reported in the Statement of Profit or Loss
and Other Comprehensive Income
6,299,286
4,938,846
(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
Net deferred tax assets
Less: temporary differences not recognized
Net deferred tax recognized in the statement of financial position
(17,085)
(2,344,514)
(17,085)
(2,344,514)
–
1,508,764
198,607
161,159
306,531
666,297
649,212
(649,212)
–
205,458
152,675
477,617
2,344,514
–
–
–
(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 (2021: $nil).
(f) Carry forward unrecognized tax losses
The Group had income tax losses of $37,717,792 and capital losses of $412,122 at year end (2021: income tax losses of
$20,846,641 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.
61
Notes to the Consolidated Financial Statements (cont.)
13. Income tax (cont.)
(g) Franking credit balance
Franking credits are a type of tax credit in Australia that is available to the Group’s shareholder to reduce double taxation
on any dividends paid by the Group. The franking account balance at the end of the financial year at 30% is AU$227,371
(2021: A$227,371), which represents the amount of franking credits available for the subsequent financial year.
Franking credits are not recognized in the consolidated statement of financial position.
14. earnings per share
The following reflects the income used in the basic and diluted earnings per
share computations:
(a) Earnings used in calculating earnings per share
Net loss attributable to ordinary equity holders of the parent
(92,817,371)
(45,344,496)
2022
US$
2021
US$
(b) Weighted average number of shares
Weighted average number of ordinary shares on issue for basic earnings per share
351,560,199
320,432,814
Effect of dilution:
Share options
–
–
Weighted average number of ordinary shares adjusted for the effect of dilution
351,560,199
320,432,814
Loss per share (basic and diluted in cents)
(26.40)
(14.15)
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 22,988,000 options/rights outstanding at June 30, 2022 (2021: 16,644,000) and 925,000 ADS options
(2021: nil) were anti‑dilutive and were therefore excluded from the weighted average number of ordinary shares for the purpose
of diluted earnings per share. 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. These options related to the following option plans:
NED Plan
LTIP
62
2022
No.
2021
No.
14,000,000
10,000,000
7,388,000
6,644,000
21,388,000
16,644,000
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
14. earnings per share (cont.)
Performance Rights
These rights related to the following option plans:
NED Plan
LTIP
ADS options
These rights related to the following option plans:
NED Plan
LTIP
2022
No.
–
1,600,000
1,600,000
2022
No.
–
925,000
925,000
2021
No.
–
–
–
2021
No.
–
–
–
As at June 30, 2022, 12,857,589 outstanding options and rights were exercisable as of that date (2021: 11,394,000).
As at June 30, 2022, Nil outstanding ADS options were exercisable as of that date.
15. Current assets – cash and cash equivalents
Cash at bank and in hand
Short‑term deposits
total cash and cash equivalents
2022
US$
2021
US$
11,853,883
15,538,510
32,777,410
102,654,667
44,631,293
118,193,177
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 0.43% (2021: 0.24%).
63
Notes to the Consolidated Financial Statements (cont.)
16. Current assets – receivables
Interest receivable
GST receivable
Other receivable
total current receivables
2022
US$
56,952
157,060
43,656
257,668
2021
US$
37,905
136,239
391,142
565,286
The GST and other receivables are non‑interest bearing. There were no receivables with a material expected credit loss recorded
during the financial year (2021: nil).
17. Current assets – prepayments
R&D Contract Research Organization
Insurance
Other prepayments
total current prepayments
2022
US$
2021
US$
7,428,599
12,551,398
1,086,847
1,820,059
204,749
14,698
8,720,195
14,386,155
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 other key milestones 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 to Note 18.
18. non‑current assets – prepayments
Insurance
total non‑current prepayments
2022
US$
110,295
110,295
2021
US$
174,541
174,541
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.
64
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
19. Current liabilities – payables
Creditors (unsecured)
Payroll related tax liability
total current payables
Creditors are non‑interest bearing and are normally settled on 30 day terms.
20. Current liabilities – provisions
Annual leave
Long service leave
total current provisions
21. non‑current liabilities – provisions
Long service leave
2022
US$
2021
US$
11,402,164
2,417,719
43,334
83,799
11,445,498
2,501,518
2022
US$
383,220
212,983
596,203
2021
US$
289,043
202,959
492,002
2022
US$
2021
US$
27,974
16,915
65
Notes to the Consolidated Financial Statements (cont.)
22. Contributed equity
(a) Ordinary shares
Issued and fully paid at June 30
Movement in ordinary shares:
Opening balance
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 $1,099,412
Ordinary shares on issue:
Opening balance
Issue of shares on exercise of options granted under the LTIP
Issue of shares on NASDAQ listing
Issue of shares on exercise of pre‑funded warrants
2022
US$
2021
US$
235,277,217
234,147,526
234,147,526
113,852,364
1,129,691
3,271,542
–
–
105,477,591
11,546,029
235,277,217
234,147,526
No:
No:
351,003,541
269,157,769
1,149,001
5,845,804
–
–
68,506,400
7,493,568
352,152,542
351,003,541
Fully paid ordinary shares carry one vote per share and carry the right to dividends. No cash dividends have been paid,
declared or recommended during or since the end of the financial year by the Company. Issued capital at June 30, 2022
amounted to $235,277,217 (352,152,542 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, 2022, the Company had 7,500,000 Non‑Executive Director options that remain unexercised with expiry
of November 2022 for 3,000,000, October 2024 for 2,000,000 options, January 2025 for 1,500,000 options, October 25
for 500,000 options and April 26 for 500,000 options.
At June 30, 2021, the Company had 3,250,000 Non‑Executive Director options that remain unexercised with expiry of
November 2022 for 1,500,000 options, October 2024 for 1,000,000 options and January 2025 for 750,000 options.
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 8,400,000 options/rights over ordinary shares and 925,000 ADS options under these plans
during the year ended June 30, 2022 (Note 30). These options/rights had a weighted average fair value at grant date of $0.781
per option. During the year ended June 30, 2022, 2,056,000 options granted under the LTIP and NED Plan were exercised for
$1,129,691 ($257,175 for cash and $872,516 via cashless conversion). The company granted 7,000,000 options over ordinary
shares under these plans during the year ended June 30, 2021 (Note 30). These options had a weighted average fair value at
their grant date of $1.03 per option. During the year ended June 30, 2021 8,400,000 options granted under the LTIP and
NED Plan were exercised for $3,271,542.
66
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
22. Contributed equity (cont.)
(b) Pre‑funded warrants
Movement in pre‑funded warrants:
Opening balance
Issue of pre‑funded warrants in a US Initial public offering
Cost of issue of pre‑funded warrants
Issue of shares on exercise of pre‑funded warrants
Pre-funded warrants on issue:
Opening balance
Issue of pre‑funded warrants in a US Initial public offering
Exercise of pre‑funded warrants
Forfeiture on exercise
2022
US$
2021
US$
–
–
–
–
–
No:
–
–
–
–
–
–
12,645,441
(1,099,412)
(11,546,029)
–
No:
–
7,493,600
(7,493,568)
(32)
–
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 in fiscal year 2021. The pre‑funded warrants were unquoted, having no voting or dividend rights and are exercisable to
ADS’s at an exercise price of US$0.00001 per pre‑funded warrant on a one for one basis with no expiry date. On June 21, 2021
all pre‑funded warrants were exercised, converting to ADS’s.
(c) Capital management
The Group is not subject to any externally imposed capital requirements. When managing share capital, management’s objective
is to ensure the entity continues as a going concern as well as to provide benefits to shareholders and for other stakeholders.
In order to maintain or achieve an appropriate capital structure, the Company may issue new shares or reduce its share capital,
subject to the provisions of the Company’s constitution. The Group only commits to significant R&D expenditure when this is
fully funded either by existing funds or further equity raises.
67
Notes to the Consolidated Financial Statements (cont.)
23. Accumulated losses and reserves
(a) Movements in accumulated losses were as follows:
Balance at July 1
Net loss for the period
Balance at June 30
(b) Reserves
Fair value of investments reserve (i)
Share‑based payments reserve (ii)
Foreign translation reserve (iii)
Total reserves
(i) Movement in fair value of investments reserve:
Opening balance
Fair value gains on investments in financial assets
Exchange on translation
Closing balance
(ii) Movement in share‑based payments reserve:
Opening balance
Share‑based payments expense
Exercise of options
Exchange on translation
Closing balance
(iii) Movement in Foreign translation reserve:
Opening balance
Gain/loss on translation
Closing balance
(c) Nature and purpose of reserves
Fair value of investments reserve
This reserve records fair value changes on listed investments.
Share-based payment reserve
2022
US$
2021
US$
(124,123,982)
(78,779,486)
(92,817,371)
(45,344,496)
(216,941,353)
(124,123,982)
1,085,411
1,085,411
8,466,706
4,087,650
20,089,163
20,089,163
29,641,280
25,262,224
1,085,411
–
–
551,409
469,767
64,235
1,085,411
1,085,411
4,087,650
3,116,080
5,251,572
3,897,638
(872,516)
(3,271,542)
–
345,474
8,466,706
4,087,650
20,089,163
5,827,605
–
14,261,558
20,089,163
20,089,163
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 AU$ to US$.
68
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
24. Financial risk management objectives and policies
The Group’s principal financial assets comprise cash, receivables and short‑term deposits.
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 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 (2021: nil).
The following sensitivity analysis (an annual effect) is based on the interest rate risk exposures at June 30, 2022 and 2021.
At June 30, 2022, 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
2022
US$
2021
US$
114,859
359,442
(114,859)
(359,442)
The post tax figures include an offset for unrecognized tax losses (bringing the tax effect to nil) for the year ended June 30, 2022
(2021: 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’.
69
Notes to the Consolidated Financial Statements (cont.)
24. Financial risk management objectives and policies (cont.)
• 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) Foreign currency risk
As a result of services provided by non‑related entities in Australia, 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.
Consolidated
AUD
2021
US$
EURO
2021
US$
26,697,582
7,827,565
–
–
GBP
2021
US$
–
–
CAD
2021
US$
–
–
(1,213,469)
(435,698)
(3,037)
(13,419)
–
–
–
–
33,311,678
(435,698)
(3,037)
(13,419)
AUD
2021
US$
EURO
2021
US$
GBP
2021
US$
35,646,457
5,513,541
–
–
(1,276,164)
(41,872)
–
–
39,883,834
(41,872)
–
–
–
–
–
CAD
2021
US$
–
–
(1,290)
–
(1,290)
2022
Financial assets
Cash
Receivables
Financial liabilities
Payables
Other financial liabilities
Net exposure
2021
Financial assets
Cash
Receivables
Financial liabilities
Payables
Other financial liabilities
Net exposure
70
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
24. Financial risk management objectives and policies (cont.)
The following sensitivity is based on the foreign currency risk exposures in existence at June 30, 2022 and 2021.
At June 30, 2022 and 2021, had the United States 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% (2021: +10%)
AUD/USD –10% (2021: –10%)
post tax (loss)/profit impact
2022
US$
2021
US$
(2,119,834)
(2,538,062)
2,590,908
3,102,076
The reasonably possible movements at June 30, 2022 are lower than at June 30, 2021 due mainly to the net exposure to the
Australian dollar due to 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.
(iii) Credit risk
Credit risk is associated with those financial assets of the Group which comprise cash and cash equivalents and receivables.
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.
(iv) 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 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. With the funding agreement that
was entered on August 12, 2022 the Group may incur a total payment equal to approximately four times the funding provided,
consisting of seven payments, with the first payment due shortly after Regulatory Approval and the remaining six payments
payable over a six‑year period thereafter, and variable payments equal to 7% of net sales of OPT‑302 for the treatment of wet
AMD for each calendar quarter. Refer to Subsequent event Note 33 for further information on the transaction.
The Group’s objective is to maintain an appropriate cash asset balance to fund its operations.
71
Notes to the Consolidated Financial Statements (cont.)
25. Related party disclosures
(a) Subsidiaries
Name of company
Vegenics Pty Ltd21
Opthea US Inc22
parent equity
% equity interest
2022
%
100
100
2021
%
100
100
(b) Transactions with related parties
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note.
21. Opthea Limited is the ultimate parent entity. Vegenics Pty Ltd is incorporated in Australia and has the same financial year as Opthea Limited.
22. Opthea Limited is the ultimate parent entity. Opthea US was incorporated in the United States in May 2021 and has the same financial year
as Opthea Limited.
72
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
26. Cash flow statement reconciliation
(a) Reconciliation to cash at the end of the year
Cash at bank and in hand (Note 15)
(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
Net loss on disposal of non‑current assets
Depreciation of non‑current assets
Depreciation of right‑of‑use asset
Share‑based payments expense
Net exchange differences
Changes in working capital:
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
Payment of lease liabilities
Exchange on translation
Balance at June 30
2022
US$
2021
US$
44,631,293
118,193,177
44,631,293
118,193,177
(92,817,371)
(45,344,496)
(6,299,286)
(4,938,846)
169
11,917
66,465
–
15,012
91,656
5,251,572
3,897,638
2,813,993
11,011,961
1,844,830
10,077,421
8,511,607
(1,552,443)
307,618
(369,712)
5,730,207
(14,231,546)
115,259
40,510
(76,307,850)
(51,380,266)
4,972,898
5,834,099
(71,334,952)
(45,546,167)
2022
US$
2021
US$
93,852
(85,578)
(8,274)
–
167,460
(87,373)
13,765
93,852
73
Notes to the Consolidated Financial Statements (cont.)
27. Commitments
(i) 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 wet AMD 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
2022
US$
2021
US$
39,947,900
26,377,778
8,007,202
2,347,060
45,000
–
48,000,102
28,724,838
Currently, the biggest Research contract has a 60 day termination clause and all commitments have been limited to a six
month commitment.
(ii) Commercial commitments
The Group has entered into commercial agreements with various third parties in respect of services for preparation of OPT‑302
for launch and pre‑marketing phase. Expenditure commitments relating to these activities are payable as follows:
Within one year
After one year but not more than five years
After more than five years
2022
US$
507,874
–
–
507,874
2021
US$
–
–
–
–
Currently, the biggest contract has a 60 day termination clause and all commitments have been limited to a twelve
month commitment.
28. Contingencies
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 (2021: $nil) and those which could become payable in more than
one year total $11,512,675 (2021: $11,548,205).
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, 2022 in respect of a rental deposit for its office premises of
$39,478 (2021: $43,000).
74
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
29. Key management personnel
(a) Compensation of Key Management Personnel
Short‑term employee benefits
Post‑employment benefits
Share‑based payments expense
Total compensation
2022
US$
2021
US$
1,555,658
1,099,081
56,105
79,550
4,664,767
3,897,638
6,276,530
5,076,269
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.
30. Share‑based payments
(a) Recognized share‑based payment expenses
The expense recognized for share‑based payments during the year is shown in the table below:
2022
US$
2021
US$
Expense arising from equity‑settled share‑based payment transactions:
Director and employee services received
5,251,572
3,897,638
(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.
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.
75
Notes to the Consolidated Financial Statements (cont.)
30. Share‑based payments (cont.)
options/Rights series
Grant date
LTIP – director FY2016
March 7, 2016
LTIP – director FY2019
November 29, 2018
LTIP – employees FY2016
March 31, 2016
LTIP – employees FY2018
August 23, 2017
LTIP – employees FY2019
April 3, 2019
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
October 19, 2021
LTIP – employees FY2022
LTIP – employees FY2022
LTIP – employees FY2022
LTIP – employees FY2022
June 6, 2022
June 6, 2022
June 6, 2022
June 6, 2022
NED Plan FY2016
March 7, 2016
NED Plan FY2019
November 29, 2018
NED Plan FY2021
October 12, 2020
NED Plan FY2021
October 12, 2020
NED Plan FY2021
October 12, 2020
NED Plan FY2021
October 12, 2020
NED Plan FY2021
October 12, 2020
NED Plan FY2021
October 12, 2020
NED Plan FY2021
October 12, 2020
NED Plan FY2021
October 12, 2020
NED Plan FY2021
NED Plan FY2021
January 19, 2021
January 19, 2021
76
Grant date
fair value
uS$
exercise
price
uS$
expiry date
Vesting date
$0.14
$0.15
$0.18
$0.26
$0.18
$0.955
$0.955
$0.955
$0.955
$0.955
$0.955
$0.955
$0.955
$0.526
$0.526
$0.526
$0.526
$0.553
$0.553
$0.553
$0.553
$0.14
$0.15
$1.05
$1.05
$1.05
$1.05
$1.24
$1.24
$1.24
$1.24
$0.88
$0.88
$0.36
March 7, 2021
June 30, 2016
$0.625 November 29, 2022 November 29, 2019
$0.37
$0.92
January 1, 2022
January 1, 2017
January 1, 2023
June 30, 2018
$0.608
April 3, 2023
April 3, 2021
$0.00
October 18, 2031
October 19, 2021
$0.00
October 18, 2031
October 19, 2022
$0.00
October 18, 2031
October 19, 2023
$0.00
October 18, 2031
January 31, 2023
$0.00
October 18, 2031 November 30, 2022
$0.00
October 18, 2031
April 30, 2023
$0.00
October 18, 2031
April 30, 2023
$0.00
October 18, 2031 September 30, 2024
$0.948
October 18, 2025
October 19, 2021
$0.948
October 18, 2025
October 19, 2022
$0.948
October 18, 2025
October 19, 2023
$0.948
October 18, 2025
October 19, 2024
$1.46
$1.46
$1.46
$1.46
$0.36
June 5, 2032
June 6, 2022
June 5, 2032
June 6, 2023
June 5, 2032
June 6, 2024
June 5, 2032
June 6, 2025
March 7, 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
$1.56
October 11, 2024
October 11, 2020
October 11, 2024
October 11, 2021
October 11, 2024
October 11, 2022
October 11, 2024
October 11, 2023
October 11, 2024
October 11, 2021
October 11, 2024
October 11, 2022
October 11, 2024
October 11, 2023
October 11, 2024
October 11, 2024
January 18, 2025
January 19, 2021
January 18, 2025
January 19, 2022
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
30. Share‑based payments (cont.)
options/Rights series
Grant date
NED Plan FY2021
NED Plan FY2021
January 19, 2021
January 19, 2021
NED Plan FY2022
October 19, 2021
NED Plan FY2022
October 19, 2021
NED Plan FY2022
October 19, 2021
NED Plan FY2022
October 19, 2021
Grant date
fair value
uS$
$0.88
$0.88
$0.526
$0.526
$0.526
$0.526
exercise
price
uS$
$1.56
$1.56
expiry date
Vesting date
January 18, 2025
January 19, 2023
January 18, 2025
January 19, 2024
$0.948
October 18, 2025
October 19, 2021
$0.948
October 18, 2025
October 19, 2022
$0.948
October 18, 2025
October 19, 2023
$0.948
October 18, 2025
October 19, 2024
There has been no alteration of the terms and conditions of the above share‑based payment arrangements since the grant date.
(c) Fair value of share options granted
Where relevant, the expected life used in the model has been adjusted based on management’s best estimate for the effects
of non‑transferability, exercise restrictions (including the probability of meeting market conditions attached to the option),
and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 4 or 5 years.
Grant date
share price
uS$
exercise
price
uS$
Fair
value per
option
uS$
expected
volatility
option
life
Dividend
yield
Risk free
interest
rate
Model
used
LTIP – director FY2016
LTIP – director FY2019
LTIP – employees FY2016
LTIP – employees FY2018
$0.28
$0.42
$0.54
$0.34
$0.36
$0.625
$0.37
$0.92
LTIP – employees FY2019
$0.48
$0.608
$0.14
$0.15
$0.18
$0.26
$0.18
65%
58%
65%
66%
57%
5 years
4 years
5 years
5 years
4 years
LTIP – employees FY2022
$0.955
$0.948
$0.526
74.78%
4 years
LTIP – employees FY2022
LTIP – employees FY2022
NED Plan FY2016
NED Plan FY2019
NED Plan FY2021
NED Plan FY2021
NED Plan FY2021
NED Plan FY2022
NED Plan FY2022
$0.955
$0.901
$0.28
$0.42
$2.19
$2.19
$1.56
$nil
$0.955
n/a
10 years
$1.46
$0.553
75% 6.5 years
$0.36
$0.625
$2.16
$3.24
$1.56
$0.14
$0.15
$1.24
$1.05
65%
58%
5 years
4 years
77.25%
4 years
77.25%
4 years
$0.88
77.01%
4 years
$0.955
$0.945
$0.526
74.78%
4 years
$0.741
$0.755
$0.397
75% 3.5 years
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
2.09%
Binomial
2.04%
Binomial
2.09%
Binomial
2.09%
Binomial
2.04%
Binomial
0.25%
Binomial
n/a
n/a
3.4%
Binomial
2.09%
Binomial
2.04%
Binomial
0.25%
Binomial
0.25%
Binomial
0.25%
Binomial
0.25%
Binomial
2.7%
Binomial
77
Notes to the Consolidated Financial Statements (cont.)
30. Share‑based payments (cont.)
Fair value of American depository shares options granted
Where relevant, the expected life used in the model has been adjusted based on management’s best estimate for the effects
of non‑transferability, exercise restrictions (including the probability of meeting market conditions attached to the option),
and behavioral considerations. Expected volatility is based on the historical share price volatility.
Grant date
share price
uS$
exercise
price
uS$
Fair
value per
ADS
options
uS$
expected
volatility
$7.240
$7.625
$4.970
$7.500
$7.515
$5.228
$5.925
$6.009
$4.116
$5.915
$6.090
$4.171
$7.000
$7.116
$4.953
$7.309
$7.445
$5.175
$5.500
$5.522
$3.886
75%
75%
75%
75%
75%
75%
75%
ADS
options
life
7 years
7 years
7 years
7 years
7 years
7 years
7 years
Dividend
yield
Risk free
interest
rate
Model
used
0%
0%
0%
0%
0%
0%
0%
1.4%
Binomial
1.7%
Binomial
1.7%
Binomial
2.9%
Binomial
2.9%
Binomial
3.0%
Binomial
3.4%
Binomial
LTIP – employee
LTIP – employee
LTIP – employee
LTIP – employee
LTIP – employee
LTIP – employee
LTIP – employee
(d) Movements in share options/rights during the year
The following reconciles the share options/rights outstanding at the beginning and end of the year:
Balance at beginning of year
Granted during the year:
June 30, 2022
June 30, 2021
Number of
options and
rights
Weighted
average
exercise price
US$
Number of
options and
rights
Weighted
average
exercise price
US$
16,644,000
0.50
18,044,000
0.50
To employees and directors under the LTIP and NED Plan
8,400,000
Exercised during the year
Expired during the year
Balance at end of year
Exercisable at end of year
(2,056,000)
–
22,988,000
12,857,589
0.77
0.58
–
1.16
0.97
7,000,000
(8,400,000)
–
16,644,000
11,394,000
2.21
0.38
–
1,28
0.86
The share options outstanding at the end of the year had a weighted average exercise price of $0.97 (2021: $0.86) and
a weighted average remaining contractual life of 567 days (2021: 628 days).
78
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
30. Share‑based payments (cont.)
(e) Movements in ADS options during the year
The following reconciles the ADS options outstanding at the beginning and end of the year:
June 30, 2022
June 30, 2021
Number
of options
and rights
Weighted
average
exercise price
US$
Number
of options
and rights
Weighted
average
exercise price
US$
Balance at beginning of year
Granted during the year:
–
–
To employees and directors under the LTIP and NED Plan
925,000
6.75
Exercised during the year
Expired during the year
Balance at end of year
Exercisable at end of year
31. net tangible asset backing
–
–
925,000
–
–
–
6.75
–
Net tangible assets (including Right‑of‑use assets)
32. Auditor’s remuneration
The auditor of Opthea Limited is Deloitte Touche Tohmatsu.
–
–
–
–
–
–
–
–
–
–
–
–
2022
US$
0.20
2021
US$
0.58
2022
A$
2021
A$
Deloitte and related networks firms:
Audit or review of the financial report of the entity and any other entity
in the consolidated group
295,000
408,660
Statutory assurance services required by legislation to be provided by the auditor
–
–
Other assurances and agreed‑upon procedures under other legislation
or contractual arrangements
171,171
466,171
45,000
453,660
79
Notes to the Consolidated Financial Statements (cont.)
33. events after the balance sheet date
DEVELOPMENT AGREEMENT AND PIPE FUNDING
On August 12, 2022 (the “Effective Date”), Opthea Limited (“Opthea”) entered into a Development Funding Agreement
(the “Agreement”) with Ocelot SPV LP (“Investor”), an affiliate of Carlyle and Abingworth, working together with Carlyle
and Abingworth’s recently formed development company Launch Therapeutics, pursuant to which Investor agrees to provide
funding to Opthea to support its development of OPT‑302 for the treatment of wet (neovascular) age‑related macular
degeneration (“wet AMD”).
Pursuant to the Agreement, Investor has committed to provide Opthea US$120 million in funding which may be increased
up to US$170 million at Investor’s option, of which US$50 million will be paid shortly after Opthea receives the proceeds
from the first tranche of the PIPE (as defined below), with the remainder being funded in two additional tranches to be paid
on December 31, 2022 and December 31, 2023, respectively. Pursuant to the Agreement, Opthea will be required to use
commercially reasonable efforts to develop OPT‑302 for the treatment of wet AMD in accordance with the Agreement,
including pursuant to certain development timelines set forth therein.
In return, Opthea will pay to Investor (1) upon the first to occur of regulatory approval of OPT‑302 for the treatment of wet AMD
in the United States, United Kingdom or European Union (“Regulatory Approval”), fixed payments equal to a total of approximately
two times the funding provided, consisting of seven payments, with the first payment due shortly after Regulatory Approval and
the remaining six payments payable over a six‑year period thereafter, and (2) variable payments equal to 7% of net sales of OPT‑302
for the treatment of wet AMD for each calendar quarter.
At the time that Investor receives an aggregate of four times the funding provided (US$680 million if Investor funds the full
US$170 million under the Agreement) (the “Cap”), Opthea’s payment obligations under the Agreement will be fully satisfied.
Opthea has the option to satisfy its payment obligations to Investor upon Regulatory Approval or a change of control of Opthea
by paying an amount equal to the present value of the remaining payments payable to Investor subject to a mid‑single‑digit
discount rate. Opthea also has an option to buy out the remaining payments at any time by paying an amount equal to the
remaining payments due subject to a proposed discount rate, which Investor may accept or reject. Upon a change of control
of Opthea, an acceleration payment of a specified multiple of the funding provided is payable, net of payments already made
to Investor and creditable against future payments to Investor.
Opthea will grant Investor a security interest in all of its assets (other than intellectual property not related to OPT‑302).
The security interest will terminate when Investor receives payments and/or change of control acceleration payments equal
to two times the funding provided or upon certain terminations of the Agreement (the “Release Date”). The Agreement also
includes customary representations and warranties and covenants, including certain negative covenants regarding limitations
on incurrence of indebtedness, liens, investments, restricted payments, sales of assets, and royalty sales. The negative covenants
will terminate upon the Release Date.
The Agreement terminates upon the payment of all payments owing to Investor, unless earlier terminated by Investor if:
• Opthea fails to comply with certain covenants and agreements set forth in the Agreement, including failure to make required
payments or develop OPT‑302 as set forth in the Agreement;
• Opthea suffers a material adverse event;
•
•
•
there is a material adverse patent impact on Opthea’s intellectual property covering OPT‑302;
there are certain irresolvable disagreements within the joint steering committee overseeing Opthea’s development of OPT‑302;
the security interests of Opthea are invalidated or terminated other than as set forth in the Agreement; or
• any Phase 3 clinical trial of OPT‑302 is completed or terminated and (1) the primary endpoint is not met or (2) Investor
reasonably determines that the results of any such trial do not support regulatory approval.
The Agreement may also be earlier terminated by Opthea if Investor fails to fund as provided in the Agreement. The Agreement
may be terminated by either party (i) if the other party materially breaches the Agreement (“Material Breach”), (ii) if OPT‑302 fails
to receive regulatory approval in the United States or European Union, (iii) upon the bankruptcy of the other party, (iv) if a serious
safety concern arises in an OPT‑302 clinical trial or (vi) upon a change of control of Opthea.
80
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
33. events after the balance sheet date (cont.)
In certain instances, upon the termination of the Agreement, Opthea will be obligated to pay Investor a multiple of the amounts
paid to Opthea under the Agreement, including specifically,
• up to the Cap in the event that Investor terminates the agreement due to (w) failure by Opthea to comply with certain
covenants and agreements set forth in the Agreement, including failure to make required payments or develop OPT‑302
as set forth in the Agreement, (x) the bankruptcy of Opthea, (y) a safety concern resulting from gross negligence on the part
of Opthea or due to a safety concern that was material on the Effective Date and the material data showing such safety
concern was not publicly known, disclosed to Investor, or in the diligence room made available to Investor or (z) the security
interests of Investor being invalidated or terminated other than as set forth in the Agreement;
• several multiples of such amounts in the event the Agreement is terminated due to Material Breach by Opthea; and
• a small multiple of such amounts in the event of certain irresolvable disagreements within the executive review committee
overseeing Opthea’s development of OPT‑302.
In addition, if following certain events of termination of the Agreement, Opthea continues to develop OPT‑302 for the treatment
of wet AMD and obtains Regulatory Approval, it will make the payments to Investor as if the Agreement had not been terminated,
less any payments made upon termination.
The Agreement also provides that Opthea will use reasonable best efforts to complete a private placement of its ordinary
shares or American Depositary Shares ("ADS’s") representing its ordinary shares (at a ratio of 8 ordinary shares per ADS) for gross
proceeds of at least US$70 million, which Opthea expects will be satisfied through the PIPE (as described below).
The Agreement also includes a minimum cash requirement, and Opthea may need to obtain additional funding to meet
this requirement in the future, including prior to the expected readout of top‑line results for its Phase 3 clinical trials. To the
extent that Opthea raises additional capital through the sale of equity or convertible debt securities to meet this requirement,
Opthea’s equity holders will be diluted.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by the full text
of the Agreement, a copy of which will be filed as an exhibit to Opthea’s Annual Report on Form 20‑F for the fiscal year ended
June 30, 2022, which will be subsequently filed with the Securities and Exchange Commission.
Concurrently with the execution of the Agreement, Opthea entered into binding commitments for the private placement of
ordinary shares to be issued pursuant to Regulation S under, and Section 4(a)(2) of, the Securities Act of 1933, as amended
(the “Securities Act”), as the case may be, for aggregate gross proceeds of approximately US$90 million (the “PIPE”) and a price
per ordinary share of AU$1.15 (approximately US$0.81).
The PIPE consists of two tranches. The first tranche will be for AU$60.7 million (US$41.9 million), or 52.8 million ordinary shares,
which amount represents the amount of new ordinary shares that Opthea may currently issue without obtaining shareholder
approval under ASX Listing Rules. The first tranche was receipted on August 24, 2022. Opthea will use reasonable best efforts to
obtain shareholder approval to issue and consummate the second tranche, which will be for US$47.5 million, or 59 million shares.
Opthea expects to issue a Notice of Meeting to its shareholders to convene a general meeting of shareholders expected
in September 2022 to obtain shareholder approval to issue and consummate the second tranche.
The Company is still assessing the accounting treatment of this transaction.
APPROVAL OF ADVANCED OVERSEAS FINDING CERTIFICATE
On August 29, 2022, the Company obtained an Advanced Overseas Finding Certificate from AusIndustry for additional overseas
research activities for OPT‑302. This is a non‑adjusting subsequent event.
Besides the above‑mentioned subsequent events, no matters or circumstances have arisen since the end of the reporting period,
which significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state
of affairs of the Group in future financial years.
81
Notes to the Consolidated Financial Statements (cont.)
34. parent entity information
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are
the same as those applied in the consolidated financial statements. Refer to Note 3 for significant accounting policies relating to
the Group.
2022
US$
2021
US$
61,913,395
138,331,255
129,015
117,110
62,042,410
138,448,365
(11,417,465)
(3,078,269)
(27,974)
(16,916)
(11,445,439)
(3,095,185)
50,596,971
135,353,180
235,277,217
234,147,526
(214,377,855)
(124,112,899)
8,466,706
4,087,650
1,085,411
1,085,411
20,145,492
20,145,492
50,596,971
135,353,180
Year ended
June 30, 2022
US$
Year ended
June 30, 2021
US$
(90,264,957)
(45,304,268)
–
469,767
(90,264,957)
(44,834,501)
(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
82
Notes to the Consolidated Financial Statements (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
34. parent entity information (cont.)
(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, 2022 (2021: nil).
(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 (2021: $nil) and those which could become payable in
more than one year total $11,512,675 (2021: $11,548,205).
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, 2022 in respect of a rental deposit for its office premises
of $39,478 (2021: $43,000).
83
Directors’ Declaration
for the year ended June 30, 2022
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, 2022 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 2 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, 2022.
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, 2022
Jeremy Levin
Chairman
Opthea Limited
84
Auditor’s Independence Declaration
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
Deloitte Touche Tohmatsu
A.B.N. 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
www.deloitte.com.au
Board of Directors
Opthea Limited
Suite 403, Level 4
650 Chapel Street
South Yarra VIC 3141
30 August 2022
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 2022, 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
DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU
VViinncceenntt SSnniijjddeerrss
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
85
85
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 subsidiaries (the
“Group”), which comprises the Consolidated Statement of Financial Position as at 30 June 2022, the Consolidated
Statement of Profit or Loss and other 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 2022 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.
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.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
86
86
Independent Auditor’s Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Ongoing capital funding activities and the going
concern assumption
The Group is subject to capital raising requirements
as it conducts its clinical trials for OPT-302, and its
ability to raise capital is a key determinant of the
Group’s ability to continue as a going concern.
As disclosed in Notes 2 and 33 of the Financial
Statements of the Group, subsequent to 30 June
2022, on 12 August 2022, the Group entered a
Development Funding Agreement (“Agreement”)
with Ocelot SPV LP (“Investor”), pursuant to which
the Investor has committed to provide Opthea
$120 million in funding which may be increased up
to $170 million at the Investor’s option.
Concurrently with the execution of the Agreement,
the Group entered into binding commitments for
the private placement of ordinary shares for
aggregate gross proceeds of approximately $90
million (the “PIPE”). The PIPE consists of two
tranches, of which the first tranche of $41.9 million
was received on 24 August 2022. The second
tranche of $47.5 million, or 59 million shares, which
is subject to shareholder approval, is expected to
be issued and received in September 2022.
We identified that the most significant assumptions
in assessing the Group’s ability to continue as a
going concern are:
•
•
the Group’s ability to meet the conditions
set forth in the Agreement, and
the Group’s ability to obtain shareholder
approval for the second tranche for the
PIPE,
as these are the key determinants in the successful
outcome of the Agreement and PIPE which is an
assumption in the Group’s cashflow forecast.
We have therefore spent significant audit effort,
including the time of senior members of our audit
team, in assessing the appropriateness of these
assumptions.
Research and development tax incentive
Our procedures included, but were not limited to:
• Obtaining an understanding of the process flows
and key controls associated with the preparation
and review of management’s going concern
assessment and cash flow forecast.
Reviewing management’s assessment of the
Group’s ability to continue as a going concern.
•
• Analysing the cashflow forecast prepared by
management, and considering the future
outcome of events or conditions in the evaluation
of management’s plans for future actions,
including:
o Evaluating the reliability of the
underlying data generated to prepare
the forecast; and
o Determining whether there is adequate
support for the assumptions underlying
the forecast.
•
Reading the Agreement to determine the critical
conditions set forth in the Agreement that must
be complied with by the Group, and assessing
management’s ability to meet these conditions;
and
• Assessing whether a material uncertainty exists
related to events or conditions that may cast
significant doubt on the entity’s ability to
continue as a going concern.
We also assessed the appropriateness of the disclosures in
Note 2 and 33 to the financial statements.
Our procedures included, but were not limited to:
The Group operates in the biotechnology market
and is in the clinical research stage of developing a
molecule asset, OPT-302, for the treatment of eye
diseases.
• 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; and
87
87
Independent Auditor’s Report (cont.)
KKeeyy AAuuddiitt MMaatttteerr
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 2022, the Group has
recognised an R&D tax incentive receivable of $6.3
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.
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 costs
related to the projects for which R&D tax
incentive applications have been approved
to date.
We have therefore spent significant audit effort,
including the time of senior members of our audit
team, in assessing the appropriateness of these
assumptions.
OOtthheerr IInnffoorrmmaattiioonn
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
• 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 performed
the following procedures:
• Obtaining an understanding of the rules and
regulations governing R&D tax incentives and the
basis used by the Group to recognise the
incentive.
• Assessing 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.
• Assessing the competency and scope of the
Group’s external R&D tax advisors.
• Assessing 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, inspecting R&D expenses to
•
supporting documentation.
Testing 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.
• Assessing management's R&D project cost
claimed for tax incentives for eligible activities,
including assessing the amounts claimed, timing
and geographical location of the costs.
We also assessed the appropriateness of the disclosures in
Note 3, 4.1 and 13 to the financial statements.
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 2022 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.
88
88
Independent Auditor’s Report (cont.)
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
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.
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.
89
89
Independent Auditor’s Report (cont.)
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 26 to 38 of the Directors’ Report for the year ended
30 June 2022.
In our opinion, the Remuneration Report of Opthea Limited, for the year ended 30 June 2022 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.
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Partner
Chartered Accountants
Perth, 30 August 2022
90
90
ASX Additional Information
OPTHEA LIMITED / AnnuAl RepoRt 2021 – 2022
1. Distribution of equity securities
The number of shareholders, by size of holding, of quoted fully paid ordinary shares as at July 25, 2022 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
No. of shares
2,849
2,989
926
882
125
1,584,740
7,874,361
7,181,679
24,239,378
311,272,384
7,816
352,152,542
Number of shareholders holding less than a marketable parcel of shares
1,110
257,039
2. twenty largest shareholders
The names of the 20 largest holders of quoted fully paid ordinary shares and their respective holdings at July 25, 2022 are:
Rank Name
No. of shares
% interest
1
2
3
4
5
6
7
8
9
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
USB NOMINEES PTY LTD
JP MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD