It’s not every day that a former doctoral student takes their thesis and turns it into a $1 billion venture, but that is just what Megan Baldwin has done at biotech outfit Opthea.

Biotechnology is a crowded corner of the ASX which is filled to the rafters with female CEOs, and Opthea‘s Baldwin has emerged as a star.

Advancing her doctoral thesis closer to commercial reality has pushed the worth of her shares and options – once they are converted – in Opthea to more than $20m.

And thanks to her recent strong research results with the OPT-302 drug, analysts are now valuing Opthea through the prism of partnering deals with pharmaceutical giants.

Stockbroker Bell Potter’s Tanushree Jain reckons $4.44 is a fair estimate of the value of Opthea shares, taking into account what industry majors have paid for other biotech juniors working up potentially valuable ideas in the same field.

In mid-August she hiked her value of Opthea shares from $2.79 earlier.

And at the end of last week, Wilsons Advisory’s analyst Shane Storey slapped a $5 price target on the shares, double his earlier target.

Underpinning his analysis is the view that doctors could use Opthea’s treatment as a first line treatment in conjunction with existing treatments, adding to its potential value.

“Retinal specialists will want to use a product that stabilises a new patient’s deteriorating vision while also improving visual gains,” he told clients in a research note.

“We have revisited our global retinal disease market model, lifting our peak annualised OPT-302 net sales estimate from $US2.2 billion ($3.2 billion) to $US5 billion.”

In its latest clinical research results Opthea saw significant progress in treating some cases of macular degeneration, an eye disease which can cause blindness.

Its research showed improvement in visual acuity by using its potential new drug jointly with a commonly used treatment.

Even though the results were only from stage two clinical trials and not the more definitive stage three results which are much more expensive and are the gateway to launch approval, long-term backers of Opthea such as biotech specialist investor BVF and also Regal Funds Management both waded into the market to top up their holdings.

When Opthea released the research results a month ago, the share price doubled to just over $2, and has continued rising. And if the two key analysts who cover the company are correct, the shares have further to go.

And thanks to the research progress, this may have opened the door to a corporate transaction which could at the least fund the estimated $150m-plus costs of its next stage of clinical work.

On Bell Potters’ numbers, it reckons Opthea could do a deal worth over $US1.2 billion just for rights to its treatment in the field of macular degeneration.

One way such a deal could be structured is for Opthea to receive $US200m upfront, with an industry major funding ongoing research, and the company paid additional sums as research milestones are reached, which is a common way of structuring deals in the biotech industry.

Wilson’s Storey argues that the strength of Opthea’s clinical research outcome is that it could decide to fund more of the ongoing research which will add to the final value for investors.

Industry majors such as Novartis, Regeneron, Bayer and Roche/Genentech could all be interested in the research being undertaken by Opthea, since it would protect their existing treatments.

Adding to the attraction of Opthea’s research results is the fact that leading treatments in the area are soon to lose exclusivity, opening the door to generics.

But by doing a deal for Opthea’s treatment, this could restart the clock for IP protection for the treatments of the industry’s majors, adding significantly to Opthea’s value.

“In reality that is one of the key drivers,” Baldwin told Stockhead in assessing Optheas’ value in any deals.

“Our drug would need to be co-formulated into the existing drugs file, to create new IP which could then protect future lucrative income streams.”

It is believed that Lucentis’ treatment will lose its IP protection within a year, and the other company with a treatment, Regeneron with Eylea, in another couple of years.

Work is already underway for generics to compete with Lucentis, for example, giving it added reason to look hard at doing a deal with Opthea.

“The most striking new observation from Opthea’s recent clinical trial results was the apparent ability for OPT-302 to preserve vision,” Wilson’s Storey said in his research note.

“Less than 1 per cent of patients treated with Opthea’s drug lost visual acuity, compared to 3-6 per cent of patients treated only with the current standard of care.”

This helps build the case “for potential first line use” of Opthea’s treatment, he argues.