Otonomy Reports Fourth Quarter and Full Year 2020 Financial Results and Provides Corporate Update
February 11 2021 - 4:16PM
Otonomy, Inc. (Nasdaq: OTIC), a biopharmaceutical company
dedicated to the development of innovative therapeutics for
neurotology, today reported financial results for the quarter and
year ended December 31, 2020 and provided an update on its product
pipeline and corporate activities. The company will host a
conference call and webcast today at 4:30 p.m. ET to discuss recent
highlights and financial results.
“We made great progress in advancing our product pipeline and
achieving our corporate objectives during 2020 including positive
clinical results for OTO-313 in tinnitus, positive clinical results
for OTO-413 in hearing loss, and completion of enrollment for our
Phase 3 trial of OTIVIDEX in Ménière’s disease,” said David A.
Weber, Ph.D., president and CEO of Otonomy. “We also selected a
product candidate, OTO-825, for our GJB2 gene therapy program,
demonstrated preclinical proof-of-concept for our otoprotection
program, and licensed a novel compound for our OTO-6XX hair cell
repair and regeneration program. We are looking forward to
important catalysts this year beginning with the OTIVIDEX Phase 3
results later this month.”
Otonomy Program Updates
- OTIVIDEX: results for Phase 3 trial in Ménière’s
disease expected by end of February. This trial enrolled a
total of 149 patients from the United States and Europe, exceeding
the target of 142 patients. In November 2020, Otonomy announced
that a review of the revised statistical analysis plan by the U.S.
Food and Drug Administration (FDA) confirmed use of the Negative
Binomial model for analysis of the primary endpoint in this trial.
The last patient last visit was completed at the end of December
2020 and results are expected by the end of this month. Assuming
positive results, we plan to submit a New Drug Application to the
FDA in the third quarter of 2021.
- OTO-313: Phase 2 trial in tinnitus planned to start in
the first quarter of 2021 with top-line results expected in
mid-2022. In July 2020, Otonomy reported positive top-line
results from the Phase 1/2 trial of OTO-313 in patients with
unilateral tinnitus of at least moderate severity. This trial
demonstrated a positive clinical response for a single
intratympanic injection of OTO-313 using the Tinnitus Functional
Index (TFI) that was correlated with tinnitus loudness, tinnitus
annoyance and patient global impression of change measures. Based
on these results, Otonomy plans to conduct a Phase 2 trial that
will enroll approximately 140 patients with unilateral tinnitus. To
enrich the study population, the trial will exclude patients with
severe hearing loss and increase the minimum TFI score required for
entry. The company will also expand the unilateral patient
population eligible for enrollment by increasing the time from
tinnitus onset from six months to one year, and will extend the
observation period to assess durability of the treatment
effect.
- OTO-413: Phase 1/2 trial expansion planned to start in
second quarter of 2021 with top-line results expected in
mid-2022. In December 2020, Otonomy announced positive
top-line results from an ascending single dose safety and
exploratory efficacy study for OTO-413 in patients with hearing
loss. This trial demonstrated that a single intratympanic injection
of OTO-413 was well-tolerated across all dose cohorts. Furthermore,
the therapeutic activity of OTO-413 versus placebo was demonstrated
across multiple clinically-validated speech-in-noise hearing tests
at consecutive time points (Days 57 and 85). Beginning in the
second quarter of 2021, Otonomy plans to enroll additional hearing
loss patients in an expansion of the Phase 1/2 trial to evaluate a
refined study protocol in preparation for Phase 2. This expansion
will randomize subjects to a single treatment with OTO-413 or
placebo and evaluate a reduced number of endpoints focusing on the
phrase, word and digit speech-in-noise hearing tests assessed in
the initial patient cohorts. Enrollment criteria will continue to
target a broad hearing loss population to support design of a Phase
2 trial.
- OTO-825: GJB2 gene therapy product
candidate selected. Otonomy and Applied Genetic
Technologies Corporation (AGTC) are collaborating to co-develop and
co-commercialize an AAV-based gene therapy to restore hearing in
patients with hearing loss caused by a mutation in the gap junction
beta-2 (GJB2) gene -- the most common cause of congenital hearing
loss. Preclinical results presented at conferences during 2020
demonstrated that a gene of interest can be expressed in support
cells of the cochlea, which are the relevant target cells for
treating GJB2 deficiency, using novel and proprietary AAV capsids.
Also, consistent gene expression was observed for at least 12 weeks
in non-human primates following a single local administration.
These results supported selection of OTO-825 for advancement into
IND enabling studies.
- OTO-510: preclinical development ongoing for novel and
proprietary otoprotection molecule. Cisplatin is a potent
chemotherapeutic agent that is widely used to treat a variety of
cancers in adults and children, however, it is commonly associated
with severe adverse effects including cisplatin-induced hearing
loss (CIHL). Otonomy has identified a novel series of molecules
with improved otoprotection in preclinical CIHL studies compared to
other agents in development. Preclinical development continues for
a small molecule from this class formulated to provide sustained
exposure from a single intratympanic injection.
- OTO-6XX: preclinical development ongoing for hair cell
repair and regeneration program. In July 2020, Otonomy
entered into an exclusive license agreement with KYORIN
Pharmaceutical Co., Ltd. (Kyorin) that provides Otonomy with
exclusive worldwide rights to develop, manufacture and
commercialize a novel compound for the treatment of sensorineural
hearing loss. Otonomy is formulating the patent-protected compound
utilizing the company’s proprietary technology to provide sustained
drug exposure in the inner ear following a single local
administration. The OTO-6XX program targets hair cell repair and
regeneration for the treatment of severe hearing loss.
- OTIPRIO®:
co-promotion partnership initiated and expanded with ALK-Abelló,
Inc. (ALK). In June 2020, Otonomy entered a co-promotion
agreement that provided ALK with an exclusive right to promote
OTIPRIO for acute otitis externa (AOE). This agreement was expanded
in October 2020 to include OTIPRIO’s other FDA-approved indication,
use during ear tube surgery. During the multi-year agreement,
Otonomy will receive co-promotion fees and reimbursement of a
proportion of product support costs while also retaining a share of
adjusted gross profits from the sale of OTIPRIO by ALK.
Fourth Quarter and Full Year 2020 Financial
Highlights
- Cash Position: Cash, cash equivalents, and
short-term investments totaled $86.3 million as of December 31,
2020, compared to $60.7 million as of December 31, 2019. In July
2020, Otonomy completed an underwritten public offering of
17,275,000 shares of its common stock, which includes the
underwriters' full exercise of their option to purchase additional
shares, and the Company sold pre-funded warrants to purchase up to
4,000,000 shares of its common stock, for total gross proceeds of
approximately $69.1 million, before deducting underwriting
discounts and commissions and other offering expenses payable by
Otonomy. All of the securities were sold by Otonomy.
- Long-term Debt: Otonomy obtained a $15.0
million term loan from Oxford Finance LLC in December 2018. In July
2020, the terms of the loan were amended to extend the
interest-only repayment period from 24 months to 36 months,
followed by 23 months of amortization.
- Operating Expenses: GAAP operating expenses
were $10.1 million for the fourth quarter of 2020, compared to
$10.7 million for the fourth quarter of 2019. For the full year
2020, GAAP operating expenses were $42.6 million compared to $44.5
million for 2019. Non-GAAP operating expenses, which exclude
stock-based compensation, were $8.5 million for the fourth quarter
of 2020, compared to $10.2 million for the fourth quarter of 2019.
For the full year 2020, non-GAAP operating expenses were $36.5
million compared to $39.6 million for 2019.
- Research and Development Expenses: GAAP
research and development (R&D) expenses for the fourth quarter
of 2020 were $6.4 million, compared to $7.0 million for the fourth
quarter of 2019. The decrease for the quarter was primarily due to
reduced third-party development costs that were partially offset by
increased compensation expense. For the full year 2020, GAAP
R&D expenses were $28.0 million compared to $32.8 million for
2019.
- Selling, General and Administrative Expenses:
GAAP selling, general and administrative (SG&A) expenses in the
fourth quarter of 2020 were $3.7 million, compared to $3.6 million
for the fourth quarter of 2019. For the full year 2020, GAAP
SG&A expenses were $14.6 million compared to $11.7 million for
2019.
Webcast and Conference Call
Otonomy management will host a webcast and conference call
regarding these program updates at 4:30 p.m. ET / 1:30 p.m. PT
today. The live call may be accessed by dialing (877) 305-6769 for
domestic callers and (678) 562-4239 for international callers with
conference ID code number: 3372182. A live webcast of the call will
be available online in the investor relations section of Otonomy’s
website at www.otonomy.com and will be archived there for 30
days.
About OtonomyOtonomy is a biopharmaceutical
company dedicated to the development of innovative therapeutics for
neurotology. The company pioneered the application of drug delivery
technology to the ear in order to develop products that achieve
sustained drug exposure from a single local administration. This
approach is covered by a broad patent estate and is being utilized
to develop a pipeline of products addressing important unmet
medical needs including Ménière’s disease, hearing loss, and
tinnitus. 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, statements related to the design and conduct of,
activity, enrollment plans and patient population for, and timing
of initiation and results for current and planned clinical trials;
statements relating to the use of and expectations regarding the
Negative Binomial model for the Phase 3 clinical trial of
OTIVIDEX; statements regarding plans to submit a New Drug
Application for OTIVIDEX; the potential benefits and opportunities
of, and activities under the collaboration agreement between
Otonomy and AGTC, including but not limited to plans to advance
into IND enabling studies, the co-promotion agreement between
Otonomy and ALK, and the license agreement between Otonomy and
Kyorin; expectations regarding preclinical programs, including the
potential benefits and development activities; expectations
regarding Otonomy’s ability to advance its pipeline and regarding
upcoming catalysts; 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: delays and
disruption resulting from the COVID-19 pandemic and
governmental and site responses to the pandemic, including current
and future impacts to Otonomy’s operations, the manufacturing of
its product candidates, the progression of its current clinical
trials, and patient conduct and compliance; Otonomy’s ability to
accurately forecast financial results; Otonomy’s ability to obtain
additional financing; Otonomy’s dependence on the regulatory
success and advancement of its product candidates; 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, conduct and compliance in clinical trials; the
integrity of patient-reported outcomes in its current and future
clinical trials; the risks of the occurrence of any event, change
or other circumstance that could impact the performance under or
give rise to the termination of the collaboration agreement between
Otonomy and AGTC, the co-promotion agreement between Otonomy and
ALK, or the license agreement between Otonomy and Kyorin, or that
could impact Otonomy’s ability to repay or comply with the terms of
the loan provided by Oxford Finance LLC; side effects or adverse
events associated with Otonomy’s product candidates; Otonomy’s
ability to successfully commercialize its product candidates, if
approved; competition in the biopharmaceutical industry; Otonomy’s
dependence on third parties to conduct nonclinical studies and
clinical trials, and for the manufacture of its product candidates;
Otonomy’s ability to protect its intellectual property in the
United States and throughout the world and to ensure compliance
with various laws and regulations in countries in which it conducts
clinical trials; expectations regarding potential therapy benefits,
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; general
economic and market conditions; and other risks. Information
regarding the foregoing and additional risks may be found in the
section entitled "Risk Factors" in Otonomy’s Annual Report on Form
10-K filed with the Securities and Exchange Commission (SEC) on
February 11, 2021, 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 InquiriesSpectrum ScienceChloé-Anne RamseyVice
President404.865.3601cramsey@spectrumscience.com
Investor InquiriesWestwicke ICRRobert H. UhlManaging
Director858.356.5932robert.uhl@westwicke.com
|
|
Otonomy, Inc. |
Condensed Balance Sheet Data |
(in thousands) |
|
|
|
|
|
As of December 31, |
|
As of December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
Cash and cash equivalents |
$ |
30,767 |
|
|
$ |
25,194 |
|
|
|
|
|
|
|
|
|
Short-term investments |
|
55,576 |
|
|
|
35,476 |
|
|
|
|
|
|
|
|
|
Right-of-use assets |
|
14,082 |
|
|
|
15,465 |
|
|
|
|
|
|
|
|
|
Total assets |
|
106,265 |
|
|
|
83,018 |
|
|
|
|
|
|
|
|
|
Long-term debt, net |
|
15,158 |
|
|
|
14,967 |
|
|
|
|
|
|
|
|
|
Leases, net of current |
|
13,847 |
|
|
|
15,320 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
39,999 |
|
|
|
42,785 |
|
|
|
|
|
|
|
|
|
Accumulated deficit |
|
(504,624 |
) |
|
|
(459,893 |
) |
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
66,266 |
|
|
|
40,233 |
|
|
|
|
|
|
|
|
|
Otonomy, Inc. |
Condensed Statements of Operations |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Product sales, net |
$ |
53 |
|
|
$ |
93 |
|
|
$ |
273 |
|
|
$ |
600 |
|
Costs and operating expenses: |
|
|
|
|
|
|
|
|
Cost of product sales |
|
274 |
|
|
|
276 |
|
|
|
1,188 |
|
|
|
912 |
|
|
Research and development |
|
6,374 |
|
|
|
7,034 |
|
|
|
27,997 |
|
|
|
32,805 |
|
|
Selling, general and
administrative |
|
3,692 |
|
|
|
3,625 |
|
|
|
14,575 |
|
|
|
11,690 |
|
Total costs and operating expenses |
|
10,340 |
|
|
|
10,935 |
|
|
|
43,760 |
|
|
|
45,407 |
|
Loss from operations |
|
(10,287 |
) |
|
|
(10,842 |
) |
|
|
(43,487 |
) |
|
|
(44,807 |
) |
|
|
|
|
|
|
|
|
|
Other (expense) income, net |
|
(360 |
) |
|
|
(83 |
) |
|
|
(1,244 |
) |
|
|
132 |
|
Net loss |
$ |
(10,647 |
) |
|
$ |
(10,925 |
) |
|
$ |
(44,731 |
) |
|
$ |
(44,675 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted |
$ |
(0.20 |
) |
|
$ |
(0.36 |
) |
|
$ |
(1.10 |
) |
|
$ |
(1.45 |
) |
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net loss per share, |
|
|
|
|
|
|
|
basic and diluted |
|
52,257,321 |
|
|
|
30,768,174 |
|
|
|
40,845,844 |
|
|
|
30,726,786 |
|
|
|
|
|
|
|
|
|
|
Otonomy, Inc. |
Reconciliation of GAAP to Non-GAAP Operating
Expenses |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
GAAP operating expenses |
|
|
|
|
|
|
|
|
Research and development |
$ |
6,374 |
|
|
$ |
7,034 |
|
|
$ |
27,997 |
|
|
$ |
32,805 |
|
|
Selling, general and administrative |
|
3,692 |
|
|
|
3,625 |
|
|
|
14,575 |
|
|
|
11,690 |
|
Total GAAP operating expenses |
|
10,066 |
|
|
|
10,659 |
|
|
|
42,572 |
|
|
|
44,495 |
|
Non-GAAP adjustments |
|
|
|
|
|
|
|
|
R&D stock-based compensation expense |
|
(632 |
) |
|
|
183 |
|
|
|
(2,456 |
) |
|
|
(2,085 |
) |
|
SG&A stock-based compensation expense |
|
(950 |
) |
|
|
(628 |
) |
|
|
(3,642 |
) |
|
|
(2,793 |
) |
Total non-GAAP adjustments |
|
(1,582 |
) |
|
|
(445 |
) |
|
|
(6,098 |
) |
|
|
(4,878 |
) |
Non-GAAP operating expenses |
$ |
8,484 |
|
|
$ |
10,214 |
|
|
$ |
36,474 |
|
|
$ |
39,617 |
|
|
|
|
|
|
|
|
|
|
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