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Why Opthea Stock Skyrocketed Today

By Keith Speights - Jun 16, 2021 at 4:06PM

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The big gain appears to be a sympathy move related to positive news for another drugmaker.

What happened

Shares of Opthea (OPT -1.06%) were skyrocketing 18% as of 3:22 p.m. EDT on Wednesday after jumping as much as 88.7% earlier in the day. The huge gain didn't result from the company's own news. Instead, some investors appear to think that positive safety results from a clinical study announced yesterday by Clearside Biomedical (CLSD -1.83%) could bode well for Opthea.

So what

Both Opthea and Clearside Biomedical are developing experimental drugs that target wet age-related macular degeneration (AMD). Clearside's phase 1/2a safety results reported on Tuesday for CLS-AX indicated that the drug was well tolerated with no drug-related adverse events.

Wooden letters spelling AMD on top of an eye chart.

Image source: Getty Images.

Opthea advanced its wet AMD candidate OPT-302 into late-stage testing earlier this year. The company is conducting two phase 3 clinical studies evaluating OPT-302 in combination with one of two current leading wet AMD drugs -- Lucentis or Eylea.

When one stock moves higher on good news for another similar stock, it's called a sympathy play. Such sympathy plays among biotech stocks aren't unusual. However, just because Clearside's safety results were positive for CLX-AX doesn't mean that Opthea will have similar success with its late-stage studies of OPT-302.

Now what

Investors will have to wait a while before Opthea has final results from its studies of OPT-302. The drugmaker expects to report top-line data in 2023. It hopes to file for regulatory approvals in the U.S. and in Europe after completing the primary efficacy portion of the late-stage studies, which will last for 12 months.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Opthea Limited Stock Quote
Opthea Limited
OPT
$7.44 (-1.06%) $0.08
Clearside Biomedical, Inc. Stock Quote
Clearside Biomedical, Inc.
CLSD
$1.61 (-1.83%) $0.03

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