Otonomy Provides Business and Financial Update
September 13 2017 - 07:30AM
Otonomy, Inc. (NASDAQ:OTIC), a biopharmaceutical company
focused on the development and commercialization of innovative
therapeutics for diseases and disorders of the ear, today announced
a set of immediate actions to preserve capital, extend its cash
runway, and build shareholder value following the recent negative
AVERTS-1 Phase 3 trial results for OTIVIDEX in Ménière’s disease.
The immediate steps the company is taking include the
following:
- As previously announced, all development activities for
OTIVIDEX have been suspended including termination of ongoing
clinical trials and pre-registration support efforts. Data
collected from the clinical trials will be reviewed to better
understand the AVERTS-1 trial failure, advise any future
development efforts in indications other than Ménière’s disease,
and support potential monetization of the asset.
- Following the suspension of OTIVIDEX development, the company
has implemented a workforce reduction totaling approximately
one-third of personnel not involved in OTIPRIO® (ciprofloxacin otic
suspension) commercial support.
- Additionally, no clinical trials will be initiated during the
remainder of this year. Timing for initiation of a Phase 2 clinical
trial of OTO-311 (gacyclidine) in tinnitus patients and a Phase 3
registration trial for OTIPRIO in pediatric patients with acute
otitis media with tympanostomy tubes (AOMT) will be evaluated as
part of the pipeline review and prioritization effort now
underway.
- Cost savings from these actions are expected to total
approximately $7 million for the remainder of 2017, net of project
wind-down expenses and severance payments. Total non-GAAP operating
expenses are now expected to total $73-$78 million for 2017
(reduced from previous guidance of $80-85 million) while GAAP
operating expenses for 2017 are expected to total $95-$100 million
(reduced from $103-$108 million).
- The company expects its cash balance (defined as cash, cash
equivalents, and short-term investments) to total $120-$125 million
at the end of 2017.
- The company expects its cash burn to total less than $45
million in 2018, and that its current cash balance will fund the
company into 2020.
As discussed in the second quarter 2017 financial results news
release and conference call (August 3, 2017), the company has
recently completed its commercial reorganization, and efforts are
underway to leverage the new sales team's pre-existing ENT
relationships and familiarity with the hospital operating room
setting to increase OTIPRIO utilization during ear tube surgery. In
addition, the company continues to support review of the
Supplemental New Drug Application (sNDA) filed for acute otitis
externa. The sNDA is currently under review by the U.S. Food and
Drug Administration (FDA) with a Prescription Drug User Fee Act
(PDUFA) action date of March 2, 2018.
Preclinical development continues on multiple product candidates
for the prevention and/or treatment of sensorineural hearing loss.
This set of programs targets key mechanisms involved in the
pathophysiology of hearing loss including age-related hearing loss.
The company believes that these multiple acute and chronic
indications collectively comprise the largest population of
patients and market opportunity in the otology field.
"We moved quickly following the disappointing AVERTS-1 trial
results to focus our efforts in order to reduce costs. I am deeply
grateful to the talented individuals dedicated to developing
OTIVIDEX for the treatment of Ménière’s disease, and we wish the
best for those impacted by the workforce reduction," said David A.
Weber, Ph.D., president and CEO of Otonomy.
"The changes we are making give us the cash runway we need to
build shareholder value by focusing on key assets in our product
pipeline which we believe is still the broadest in the otology
field. We have a tremendous opportunity to utilize our experience,
expertise, and resources to address important unmet medical needs
such as hearing loss and tinnitus, and I look forward to outlining
our plans in future business updates," added Dr. Weber.
About Otonomy
Otonomy is a biopharmaceutical company focused on the
development and commercialization of innovative therapeutics for
diseases and disorders of the ear. OTIPRIO® (ciprofloxacin otic
suspension) is approved in the United States for use during
tympanostomy tube placement surgery in pediatric patients, an sNDA
has been accepted for filing by the FDA for acute otitis externa
(AOE) and a successful End-of-Phase 2 review has been completed
with the FDA for acute otitis media with tympanostomy tubes (AOMT).
OTIVIDEX™ is a sustained-exposure formulation of the steroid
dexamethasone. OTO-311 is an NMDA receptor antagonist for the
treatment of tinnitus that has completed a Phase 1 clinical safety
trial. A set of programs targeting sensorineural hearing loss
including age-related hearing loss are in preclinical development.
Otonomy’s proprietary formulation technology utilizes a
thermosensitive gel and drug microparticles to enable single dose
treatment by a physician. For additional information please visit
www.otonomy.com.
Cautionary Note Regarding Forward Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements generally relate to future events
or the future financial or operating performance of Otonomy.
Forward-looking statements in this press release include, but are
not limited to, plans for a Phase 3 clinical trial for OTIPRIO in
AOMT and a Phase 2 clinical trial for OTO-311, Otonomy’s financial
guidance for 2017 and 2018, the estimate of how long Otonomy’s cash
balance will fund operations, and statements by Otonomy’s president
and CEO. Otonomy's expectations regarding these matters may not
materialize, and actual results in future periods are subject to
risks and uncertainties. Actual results may differ materially from
those indicated by these forward-looking statements as a result of
these risks and uncertainties, including but not limited to:
Otonomy's limited operating history and its expectation that it
will incur significant losses for the foreseeable future; Otonomy's
ability to obtain additional financing; Otonomy's dependence on the
commercial success of OTIPRIO and the regulatory success and
advancement of additional product candidates, and label expansion
indications for OTIPRIO; the uncertainties inherent in the clinical
drug development process, including, without limitation, Otonomy's
ability to adequately demonstrate the safety and efficacy of its
product candidates, the nonclinical and clinical results for its
product candidates, which may not support further development, and
challenges related to patient enrollment in clinical trials;
Otonomy's ability to obtain regulatory approval for its product
candidates; side effects or adverse events associated with
Otonomy's product candidates; competition in the biopharmaceutical
industry; Otonomy's dependence on third parties to conduct
nonclinical studies and clinical trials; the timing and outcome of
hospital pharmacy and therapeutics reviews and other facility
reviews; the impact of coverage and reimbursement decisions by
third-party payors on the pricing and market acceptance of OTIPRIO;
Otonomy's dependence on third parties for the manufacture of
OTIPRIO and product candidates; Otonomy's dependence on a small
number of suppliers for raw materials; Otonomy's ability to protect
its intellectual property related to OTIPRIO and its product
candidates in the United States and throughout the world;
expectations regarding potential market size, opportunity and
growth; Otonomy's ability to manage operating expenses;
implementation of Otonomy's business model and strategic plans for
its business, products and technology; and other risks. Information
regarding the foregoing and additional risks may be found in the
section entitled "Risk Factors" in Otonomy's Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission (the
"SEC") on August 3, 2017, and Otonomy's future reports to be filed
with the SEC. The forward-looking statements in this press release
are based on information available to Otonomy as of the date
hereof. Otonomy disclaims any obligation to update any
forward-looking statements, except as required by law.
Contacts:
Media InquiriesCanale CommunicationsHeidi Chokeir, Ph.D.Senior
Vice President619.849.5377heidi@canalecomm.com
Investor InquiriesWestwicke PartnersRobert H. UhlManaging
Director858.356.5932robert.uhl@westwicke.com
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