UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 10, 2015
Otonomy, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware |
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001-36591 |
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26-2590070 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
6275 Nancy Ridge Drive, Suite 100
San Diego, CA 92121
(Address of principal executive offices, including zip code)
(858) 242-5200
(Registrants telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report.)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 |
Results of Operations and Financial Condition. |
On November 10, 2015, Otonomy, Inc. (the
Company) issued a press release announcing its financial results for the third quarter ended September 30, 2015. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
All of the information furnished in this Item 2.02 and Item 9.01 (including Exhibit 99.1) shall not be deemed to be
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 |
Financial Statements and Exhibits. |
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Exhibit No. |
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Description |
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99.1 |
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Press Release dated November 10, 2015. |
-2-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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OTONOMY, INC. |
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Date: November 10, 2015 |
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By: |
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/s/ Paul E. Cayer |
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Paul E. Cayer Chief Financial and Business
Officer |
-3-
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Press Release dated November 10, 2015. |
-4-
Exhibit 99.1
FOR IMMEDIATE RELEASE
Otonomy Reports Third Quarter 2015 Financial Results and Provides Corporate Update
SAN DIEGO, November 10, 2015 Otonomy, Inc. (NASDAQ: OTIC), a clinical-stage biopharmaceutical company focused on the development and
commercialization of innovative therapeutics for diseases and disorders of the ear, today reported financial results for the quarter ended September 30, 2015 and provided an update on its corporate activities and product pipeline.
Third Quarter 2015 and Subsequent Highlights
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Completed Successful End-of-Phase 2 Meeting with the FDA for OTO-104 and Finalized Design of Phase 3 Clinical Program in Ménières Disease: In September 2015, Otonomy announced the completion
of a successful End-of-Phase 2 meeting with the U.S. Food and Drug Administration (FDA) for OTO-104 in the treatment of Ménières disease. Based on these discussions and learnings from the Phase 2b clinical trial, the company
finalized the design of the two parallel Phase 3 clinical trials. The company expects to begin a U.S. trial by the end of 2015 and an EU trial during the first quarter of 2016. Results from both trials are expected in the second half of 2017.
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Presented Phase 3 Data for OTIPRIO (formerly known as AuriPro) and Phase 2b Data for OTO-104 at 2015 AAO-HNSF Annual Meeting: In September 2015, Otonomy presented positive clinical results from its
Phase 3 trials evaluating OTIPRIO in pediatric patients with middle ear effusion undergoing ear tube placement surgery, and its Phase 2b trial evaluating OTO-104 in patients with unilateral Ménières disease, at the 2015 American
Academy of Otolaryngology - Head & Neck Surgery Foundation (AAO-HNSF) Annual Meeting. |
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Advanced Clinical Development of OTIPRIO in Two Expansion Indications: In July 2015, Otonomy announced the enrollment of the first patients in a Phase 2 clinical trial evaluating OTIPRIO for the treatment of
patients with otitis externa, also known as swimmers ear. During Otonomys recent investor and analyst day, it announced plans to initiate a second Phase 2 trial in pediatric patients with acute otitis media with tubes (AOMT) in the first
quarter of 2016. Also in October 2015, Otonomy announced initiation of patient enrollment in a Phase 3b clinical trial evaluating OTIPRIO in an expanded population of pediatric patients undergoing ear tube placement surgery. |
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Received FDA Clearance of IND for OTO-311: In October 2015, Otonomy announced that the FDA had cleared the companys Investigational New
Drug application (IND) for |
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OTO-311, a product candidate for patients with tinnitus. OTO-311 is a sustained-exposure formulation of the N-Methyl-D-Aspartate (NMDA) receptor antagonist gacyclidine. The IND clearance allows
Otonomy to initiate a Phase 1 dose escalation clinical safety trial of OTO-311 in normal healthy volunteers which is expected to begin before the end of 2015. |
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Acquired Rights to Multiple Product Candidates for Hearing Loss Development Program: During its investor and analyst day, Otonomy announced the initiation of formulation and preclinical development activities for
a program addressing sensorineural hearing loss which the company believes represents the largest market opportunity within the otology field. This effort is focused on several possible treatment approaches including repair of ribbon synapses and
regeneration of cochlear hair cells. |
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Appointed Ted Schroeder to Board of Directors: In September 2015, Otonomy announced the appointment of Ted Schroeder to its board of directors. Most recently, Mr. Schroeder served as co-founder, president,
CEO and member of the board of directors for specialty pharmaceutical company Cadence Pharmaceuticals from its founding in 2004 until its acquisition by Mallinckrodt Pharmaceuticals for $1.4 billion in 2014. |
Otonomy is preparing multiple commercial initiatives in anticipation of the expected U.S. launch of OTIPRIO in the first quarter of 2016, assuming FDA
approval on or before the December 25, 2015 PDUFA date. We are focused on building awareness of Otonomy in the ENT community, and finalizing plans for market access, reimbursement, pricing, and promotion, said David A. Weber, Ph.D.,
president and CEO of Otonomy. We have also made solid progress across our entire pipeline including finalizing the Phase 3 clinical program for OTO-104 in Ménières disease, advancing the clinical development of OTIPRIO in
potential label expansion indications, receiving FDA clearance to initiate a Phase 1 safety clinical trial for OTO-311, and initiating a fourth development program focused on sensorineural hearing loss, potentially the largest opportunity and unmet
medical need in the otology field.
Anticipated Upcoming Milestones
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OTIPRIOs PDUFA action date is December 25, 2015. Contingent on FDA approval on or before this date, Otonomy expects to launch OTIPRIO in the U.S. in the first quarter of 2016 with a sales force totaling
approximately 40 representatives. |
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Otonomy expects to initiate two parallel Phase 3 trials for OTO-104 in patients with Ménières disease, with a U.S. trial expected to begin by the end of 2015 and an EU trial expected to begin during
the first quarter of 2016. |
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Otonomy expects to begin a Phase 1 clinical safety trial for OTO-311, a potential treatment for tinnitus, before the end of 2015. |
Third Quarter Financial Highlights
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Cash Position: Cash, cash equivalents, and short-term investments totaled $199.2 million as of September 30, 2015, compared to $211.9 million as of June 30, 2015. |
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Operating Expenses: GAAP operating expenses were $16.1 million for the third quarter of 2015, compared to $9.4 million for the third quarter of 2014. Non-GAAP operating expenses, which exclude stock-based
compensation expense, totaled $13.9 million for the third quarter of 2015, compared to $8.9 million for the third quarter of 2014. |
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Research and Development Expenses: GAAP research and development (R&D) expenses for the third quarter of 2015 were $9.6 million, compared to $7.4 million for the third quarter of 2014. The increase was
primarily a result of increased personnel costs, including stock-based compensation expense, increased preclinical development expenses for OTO-311 and costs for label expansion indication studies for OTIPRIO that began during 2015. The increase was
partially offset by lower clinical trial-related expenses for OTO-104 following the completion of enrollment in the Phase 2b study during December 2014. Non-GAAP R&D expenses were $8.8 million for the third quarter of 2015, compared to $7.1
million for the third quarter of 2014. |
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General and Administrative Expenses: GAAP general and administrative (G&A) expenses in the third quarter of 2015 were $6.5 million, compared to $2.0 million for the third quarter of 2014. The increase was
primarily attributable to increased personnel costs, including stock-based compensation expense, expanded operating activities and costs related to our commercial preparation activities. Non-GAAP G&A expenses were $5.1 million for the third
quarter of 2015, compared to $1.8 million for the third quarter of 2014. |
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Financial Guidance: Otonomy reaffirms its expectation for 2015 GAAP operating expenses in the range of $70-$75 million and non-GAAP operating expenses in the range of $65-$70 million. In addition, as announced at
its recent investor and analyst day, the company expects 2016 non-GAAP operating expenses to be in the range of $90-$95 million. |
Non-GAAP Financial Measures
In this press release,
Otonomys financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. Non-GAAP financial results exclude
stock-based compensation expense. These non-GAAP results are provided as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help indicate underlying trends in the companys
business, are important in comparing current results with prior period results and provide additional information regarding the companys financial position. Management also uses these non-GAAP financial measures to establish budgets and
operational goals that are communicated internally and externally and to manage the companys business and to evaluate its performance. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached
financial information.
About Otonomy
Otonomy is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapeutics for diseases and disorders of
the ear. Otonomys proprietary technology provides sustained exposure of drugs to the ear following a single administration. Otonomy has three product candidates in development. OTIPRIO is an antibiotic that has completed Phase 3 clinical
trials in pediatric patients with middle ear effusion at the time of tympanostomy tube placement surgery, and the FDA has assigned a PDUFA action date of December 25, 2015 for the companys New Drug Application. OTO-104 is a steroid that
has completed a Phase 2b clinical trial in 154 patients with Ménières disease. Based on these results, Otonomy intends to initiate two parallel Phase 3 trials for OTO-104 in Ménières disease patients with at
least one trial initiated by the end of 2015. OTO-311 is an NMDA receptor antagonist in development as a treatment for tinnitus. A Phase 1 clinical safety trial for OTO-311 is expected to begin before the end of 2015. 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 Otonomys future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, Otonomys expectations regarding the commercial launch of OTIPRIO
in the United States, the Phase 2 clinical trial for OTIPRIO for the treatment of patients with otitis externa, the initiation of the Phase 2 trial in pediatric patients with acute otitis media with tubes (AOMT), the initiation of two Phase 3 trials
for OTO-104, the initiation of a Phase 1 clinical trial for OTO-311, the formulation and preclinical development activities for a program addressing sensorineural hearing loss, Otonomys chief executive officers statements regarding the
companys activities, and estimated operating expenses for 2015 and 2016. Otonomys 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: Otonomys limited operating history and its expectation that it will incur significant losses
for the foreseeable future; Otonomys ability to obtain substantial additional financing; Otonomys dependence on the regulatory and commercial success of OTIPRIO and OTO-104 and advancing additional product candidates, such as OTO-311;
the uncertainties inherent in the clinical drug development process, including, without limitation, Otonomys ability to adequately demonstrate the safety and efficacy of its product candidates, the preclinical and clinical results for its
product candidates, which may not support further development of product candidates, and challenges related to patient enrollment in clinical trials; Otonomys ability to obtain regulatory approval for its product candidates; side effects or
adverse events associated with Otonomys product candidates; competition in the biopharmaceutical industry; Otonomys dependence on third parties to conduct preclinical studies and clinical trials; Otonomys dependence on third
parties for the manufacture of products; Otonomys dependence on a small number of suppliers for raw materials; Otonomys ability to protect its intellectual property related to product candidates in the United States and
throughout the world; expectations regarding potential market size, opportunity and growth; Otonomys ability to manage operating expenses; implementation of Otonomys 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 Otonomys Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission (the SEC) on November 11, 2015, and Otonomys 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.
Otonomy, Inc.
Condensed Balance Sheet Data
(in thousands)
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As of
September 30, |
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As of December 31, |
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2015 |
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2014 |
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(unaudited) |
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Cash and cash equivalents |
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$ |
176,602 |
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$ |
139,810 |
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Short-term investments |
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22,587 |
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16,223 |
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Total assets |
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208,484 |
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159,164 |
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Total liabilities |
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8,867 |
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5,551 |
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Accumulated deficit |
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(142,995 |
) |
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(102,469 |
) |
Total stockholders equity |
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199,617 |
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153,613 |
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Otonomy, Inc.
Condensed Statements of Operations
(in thousands, except share and per share data)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2015 |
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2014 |
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2015 |
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2014 |
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(unaudited) |
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Operating expenses: |
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Research and development |
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$ |
9,589 |
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$ |
7,361 |
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$ |
25,485 |
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$ |
24,616 |
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General and administrative |
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6,492 |
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2,040 |
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15,345 |
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5,169 |
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Total operating expenses |
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16,081 |
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9,401 |
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40,830 |
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29,785 |
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Loss from operations |
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(16,081 |
) |
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(9,401 |
) |
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(40,830 |
) |
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(29,785 |
) |
Other income (expense) |
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116 |
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(2,630 |
) |
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304 |
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(3,298 |
) |
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Net loss |
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(15,965 |
) |
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(12,031 |
) |
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(40,526 |
) |
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(33,083 |
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Accretion to redemption value of convertible preferred stock |
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(7 |
) |
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(35 |
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Net loss attributable to common stockholders |
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$ |
(15,965 |
) |
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$ |
(12,038 |
) |
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$ |
(40,526 |
) |
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$ |
(33,118 |
) |
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Net loss per share attributable to common stockholders, basic and diluted |
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$ |
(0.66 |
) |
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$ |
(1.23 |
) |
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$ |
(1.70 |
) |
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$ |
(9.83 |
) |
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Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted |
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24,197,160 |
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9,823,690 |
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23,847,988 |
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3,369,437 |
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Otonomy, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except share and per share data)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2015 |
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2014 |
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2015 |
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2014 |
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(unaudited) |
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Reconciliation of GAAP to non-GAAP operating expenses |
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GAAP operating expenses |
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$ |
16,081 |
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$ |
9,401 |
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$ |
40,830 |
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$ |
29,785 |
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Non-GAAP adjustment |
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Stock-based compensation expense (1) |
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(2,220 |
) |
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(487 |
) |
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(5,321 |
) |
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(895 |
) |
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Non-GAAP operating expenses |
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$ |
13,861 |
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$ |
8,914 |
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$ |
35,509 |
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$ |
28,890 |
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Reconciliation of GAAP to non-GAAP net loss attributable to common stockholders |
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GAAP net loss attributable to common stockholders |
|
$ |
(15,965 |
) |
|
$ |
(12,038 |
) |
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$ |
(40,526 |
) |
|
$ |
(33,118 |
) |
Non-GAAP adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense (1) |
|
|
2,220 |
|
|
|
487 |
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|
|
5,321 |
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|
|
895 |
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
Non-GAAP net loss attributable to common stockholders |
|
$ |
(13,745 |
) |
|
$ |
(11,551 |
) |
|
$ |
(35,205 |
) |
|
$ |
(32,223 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
GAAP net loss per share attributable to common stockholders, basic and diluted |
|
$ |
(0.66 |
) |
|
$ |
(1.23 |
) |
|
$ |
(1.70 |
) |
|
$ |
(9.83 |
) |
Non-GAAP adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
0.09 |
|
|
|
0.05 |
|
|
|
0.22 |
|
|
|
0.27 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Non-GAAP net loss attributable to common stockholders, basic and diluted |
|
$ |
(0.57 |
) |
|
$ |
(1.18 |
) |
|
$ |
(1.48 |
) |
|
$ |
(9.56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted |
|
|
24,197,160 |
|
|
|
9,823,690 |
|
|
|
23,847,988 |
|
|
|
3,369,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes R&D-related stock-based compensation expense of: |
|
$ |
819 |
|
|
$ |
244 |
|
|
$ |
2,094 |
|
|
$ |
407 |
|
Includes G&A-related stock-based compensation expense of: |
|
$ |
1,401 |
|
|
$ |
243 |
|
|
$ |
3,227 |
|
|
$ |
488 |
|
Contacts:
Media
Inquiries
Canale Communications
Heidi Chokeir, Ph.D.
Senior Vice President
619.849.5377
heidi@canalecomm.com
Investor Inquiries
Westwicke Partners
Robert H. Uhl
Managing Director
858.356.5932
robert.uhl@westwicke.com
###
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