Business Overview and History
Opus Genetics, Inc. (NASDAQ:IRD) is a newly formed clinical-stage ophthalmic biotechnology company leading the charge in gene therapy treatments for inherited retinal diseases (IRDs) and other ophthalmological disorders. This transformative combination of Ocuphire Pharma, Inc. and the privately-held Opus Genetics has created a powerhouse poised to make significant strides in addressing unmet needs for patients suffering from devastating vision loss.
The origins of Opus Genetics can be traced back to 2021, when the Retinal Degeneration Fund (RD Fund) launched the privately-held Opus Genetics to develop gene therapies for the treatment of IRDs. Leveraging its expertise and funding, the RD Fund assembled a talented team of researchers and clinicians dedicated to advancing cutting-edge gene therapy programs.
In October 2024, Ocuphire Pharma, Inc., a clinical-stage ophthalmic biopharmaceutical company, acquired Opus Genetics in an all-stock transaction. This strategic move combined Ocuphire’s existing pipeline, including the FDA-approved RYZUMVI™ (Phentolamine Ophthalmic Solution 0.75%) for the treatment of pharmacologically-induced mydriasis, with Opus Genetics’ promising gene therapy candidates. The combined entity now operates under the Opus Genetics name and trades on the Nasdaq exchange under the ticker symbol “IRD.”
The company’s history dates back to its previous incarnation as Ocuphire Pharma, which was initially focused on developing small molecule therapies for retinal and refractive eye disorders. In November 2020, Ocuphire Pharma completed a merger with Rexahn Pharmaceuticals, Inc., providing additional funding and expanding its pipeline. However, the company faced challenges in the early stages, reporting substantial losses from 2020 to 2022 as it worked to advance its clinical programs.
A turning point came in November 2022 when Ocuphire Pharma entered into a license and collaboration agreement with Viatris Inc. This agreement granted Viatris exclusive rights to develop, manufacture, and commercialize Phentolamine Ophthalmic Solution 0.75% (PS) in certain global markets, providing Ocuphire Pharma with a one-time non-refundable payment of $35 million.
The company achieved a significant milestone in September 2023 when the FDA approved PS, now marketed as RYZUMVI, for the treatment of pharmacologically-induced mydriasis. This marked the first approved product in Ocuphire Pharma’s portfolio. Following this approval, the company worked closely with Viatris to successfully launch RYZUMVI in the U.S. market in April 2024.
The Opus Genetics portfolio boasts a diverse array of gene therapy programs targeting various IRDs, including the most advanced candidate, OPGx-LCA5, which is being developed to treat Leber congenital amaurosis (LCA) caused by mutations in the LCA5 gene. This program has demonstrated encouraging early data, with new six-month results showing visual improvement in three out of three adult patients with late-stage disease participating in the ongoing Phase 1/2 trial. Enrollment of the first pediatric patients in this trial is expected in the first quarter of 2025, with initial data anticipated in the third quarter of 2025.
Additionally, Opus Genetics has acquired the gene therapy candidate OPGx-BEST1, which is being developed for the treatment of IRDs associated with mutations in the BEST1 gene, commonly known as Best disease. Preclinical studies in a naturally occurring canine model of Best disease have exhibited both safety and efficacy, paving the way for a planned first-in-human clinical trial in 2025.
Beyond its gene therapy pipeline, Opus Genetics’ portfolio includes Phentolamine Ophthalmic Solution 0.75% (PS), which was approved by the FDA in 2023 for the treatment of pharmacologically-induced mydriasis and is being commercialized by the company’s partner, Viatris. PS is also being evaluated in late-stage clinical trials for the treatment of presbyopia and decreased visual acuity under low light conditions following keratorefractive surgery, with key data readouts expected in the first half of 2025.
Recognizing the significant capital requirements and development timelines associated with the late-stage APX3330 program, a small-molecule inhibitor of Ref-1 for the treatment of non-proliferative diabetic retinopathy, Opus Genetics has decided to seek a strategic partner to advance this asset, allowing the company to focus its resources on its promising gene therapy pipeline.
Financial Highlights
As of September 30, 2024, Opus Genetics reported a strong cash position of $36.6 million, which the company believes will be sufficient to fund its operations for at least the next twelve months. This cash balance reflects the $35 million upfront payment received in late 2022 from the Viatris License Agreement, as well as $10 million in milestone payments related to the FDA approval and commercial launch of RYZUMVI.
For the nine months ended September 30, 2024, Opus Genetics reported total revenue of $6.7 million, primarily from the reimbursement of research and development services and royalties from RYZUMVI sales. The company’s net loss for the same period was $22.4 million, with research and development expenses of $19.8 million and general and administrative expenses of $10.9 million.
For the most recent fiscal year (2023), Opus Genetics reported revenue of $19.05 million and a net loss of $9.99 million. Operating cash flow and free cash flow for 2023 were both negative $1.11 million.
In the most recent quarter (Q3 2024), the company reported revenue of $1.11 million, down from $11.94 million in Q3 2023. This decrease was primarily due to a $10 million milestone payment received in Q3 2023 related to the FDA approval of RYZUMVI. Net loss for Q3 2024 was $7.77 million, with operating cash flow and free cash flow both at negative $7.29 million.
Liquidity
The company’s strong cash position of $36.6 million as of September 30, 2024, provides a solid foundation for its operations and ongoing research and development efforts. This liquidity is crucial for supporting the advancement of its gene therapy pipeline and other clinical programs.
Opus Genetics maintains a healthy liquidity profile with a debt-to-equity ratio of 0, indicating no long-term debt on its balance sheet. The company’s current ratio and quick ratio both stand at 10.68, demonstrating a strong ability to meet short-term obligations. No available credit line has been disclosed.
Key Risks and Challenges
As a clinical-stage biotechnology company, Opus Genetics faces several risks and challenges common to the industry. The development of gene therapy products is inherently complex and subject to significant regulatory scrutiny, which can introduce delays and uncertainties. The company’s reliance on third-party manufacturers and service providers for critical aspects of its operations also presents potential risks.
Additionally, the company’s recent transformation through the Ocuphire Pharma acquisition brings integration challenges, as the two organizations work to align their strategies, resources, and cultures. The success of this integration will be crucial to Opus Genetics’ ability to execute on its ambitious goals.
Product Segments and Pipeline
Opus Genetics operates in two main product segments: gene therapy programs for the treatment of inherited retinal diseases (IRDs) and a non-selective alpha-1 and alpha-2 adrenergic antagonist product candidate called Phentolamine Ophthalmic Solution 0.75% (PS).
The gene therapy programs form the core of the company’s pipeline, with multiple assets targeting mutations in genes causing different forms of bestrophinopathy, Leber congenital amaurosis (LCA), and retinitis pigmentosa. The most advanced gene therapy candidate, OPGx-LCA5, has received Rare Pediatric Disease Designation and Orphan Drug Designation from the FDA, making it eligible for a priority review voucher upon biologics license application (BLA) approval.
PS has been evaluated in a total of 13 clinical trials, including 5 Phase 3 trials, across three targeted indications: reversal of pharmacologically-induced mydriasis, presbyopia, and decreased vision under mesopic low light conditions after keratorefractive surgery. The VEGA-3 Phase 3 clinical trial evaluating PS for presbyopia is currently ongoing, with topline data expected in the first half of 2025. Additionally, the company received FDA agreement under Special Protocol Assessment (SPA) for the LYNX-2 Phase 3 trial of PS for decreased vision under mesopic low light conditions following keratorefractive surgery, which is ongoing, with topline data expected in the first quarter of 2025.
Outlook and Conclusion
Opus Genetics has emerged as a leading player in the burgeoning field of gene therapy for inherited retinal diseases and other ophthalmic conditions. The company’s diverse pipeline, bolstered by the acquisition of Opus Genetics, positions it for significant growth and value creation in the years to come.
With promising early data from its lead gene therapy program, OPGx-LCA5, and a robust clinical development plan for its other assets, including PS, Opus Genetics is poised to deliver meaningful progress and milestones in 2025 and beyond. The decision to seek a strategic partner for the APX3330 program will allow the company to focus its resources on its gene therapy initiatives, which hold tremendous promise for addressing the unmet needs of patients suffering from devastating vision loss.
As Opus Genetics navigates the challenges and opportunities ahead, investors should closely monitor the company’s execution, clinical trial results, and strategic partnerships – all of which will be crucial to the realization of its transformative vision.
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