Otonomy Reports First Quarter 2021 Financial Results and Provides Corporate Update
May 11 2021 - 4:17PM
Otonomy, Inc. (Nasdaq: OTIC), a biopharmaceutical company
dedicated to the development of innovative therapeutics for
neurotology, today reported financial results for the quarter ended
March 31, 2021 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 are focused on advancing our multiple programs for treating
hearing loss and tinnitus as demonstrated by the recent initiation
of our Phase 2 trial for OTO-313, ongoing preparation for
initiating the expansion of the Phase 1/2 trial for OTO-413 this
quarter, and upcoming presentation of preclinical proof-of-concept
results for our OTO-825 gene therapy program,” said David A. Weber,
Ph.D., president and CEO of Otonomy. “Our strengthened balance
sheet will fund the Company well beyond our anticipated clinical
milestones in mid-2022 and supports the advancement of our multiple
preclinical programs including the IND-enabling activities for
OTO-825.”
Otonomy Program Updates
- OTO-313: Phase 2 trial in tinnitus initiated with
top-line results expected in mid-2022. Otonomy recently
initiated a Phase 2 trial of OTO-313, based on the design of
the successful Phase 1/2 trial, that will enroll approximately 140
patients with persistent, unilateral tinnitus of at least moderate
severity. To enrich the study population, this trial is excluding
patients with severe hearing loss and has an increased minimum
Tinnitus Functional Index (TFI) score required for entry. Otonomy
is expanding the unilateral patient population eligible for
enrollment by increasing the maximum time from tinnitus onset from
six months up to one year. The primary endpoint is the same as
reported for the Phase 1/2 trial: a responder analysis based on the
proportion of patients who report a clinically meaningful
improvement in TFI from baseline at both Month 1 and Month 2
following treatment. The follow-up period has also been
extended out to four months to assess durability of the observed
treatment effect.
- OTO-413: Phase 1/2 trial expansion in hearing loss
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 approximately 30
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 trial 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: IND-enabling activities
underway for GJB2 gene therapy for congenital
hearing loss with preclinical proof-of-concept data to be presented
at ASGCT. OTO-825 is 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. Previously presented preclinical data
demonstrate that a gene of interest can be expressed in support
cells of the cochlea, which are the relevant target cells for
treating GJB2 deficiency, and that consistent gene expression can
be observed for at least 12 weeks in non-human primates following a
single local administration. Otonomy recently announced that
preclinical results demonstrating the successful recovery of
hearing and cochlear morphology in two preclinical models of GJB2
deficiency will be presented on May 13, 2021 at the American
Society of Gene & Cell Therapy (ASGCT) Annual Meeting. These
results supported the selection of OTO-825 for advancement into
IND-enabling activities, which are ongoing. An update on this
program will be provided in mid-2021.
- 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. The goal of the
OTO-510 program is to preserve hearing without protecting the
tumor.
- 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.
- OTIVIDEX®: following
completion of analysis, no further support of the program is
planned. In February 2021, Otonomy announced the results
of a third Phase 3 trial for OTIVIDEX in Ménière’s disease. This
trial failed to achieve its primary endpoint, which is based on the
intent-to-treat population (p value = 0.312). The trial did achieve
statistical significance for the per protocol population (p value =
0.031). Based on a comprehensive analysis of the results, Otonomy
has decided not to pursue additional development of the product
candidate.
- OTIPRIO®: evaluating
strategic alternatives. In June 2020, Otonomy entered a
co-promotion agreement that provided ALK-Abelló, Inc. (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.
Following the negative Phase 3 results for OTIVIDEX, Otonomy
notified ALK of its intent to evaluate strategic alternatives for
the product, which is ongoing.
Anticipated Upcoming Milestones
- In the second quarter of 2021, initiate an expansion of the
Phase 1/2 clinical trial of OTO-413.
- In mid-2021, provide update on OTO-825 gene therapy
program.
- In mid-2022, announce top-line results for OTO-313 Phase 2
clinical trial.
- In mid-2022, announce top-line results for OTO-413 Phase 1/2
expansion trial.
First Quarter Financial Highlights
- Cash Position: Cash, cash equivalents, and
short-term investments totaled $73.8 million as of March 31, 2021,
compared to $86.3 million as of December 31, 2020. In April 2021,
Otonomy completed an underwritten public offering of 8,298,890
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 7,111,110 shares
of its common stock, for total gross proceeds of approximately
$34.7 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 $11.7 million for the first quarter of 2021, compared to $11.5
million for the first quarter of 2020. Non-GAAP operating expenses,
which exclude stock-based compensation, were $9.7 million for the
first quarter of 2021, compared to $10.1 million for the first
quarter of 2020.
- Research and Development Expenses: GAAP
research and development (R&D) expenses were $7.7 million for
the first quarter of 2021 and for the first quarter of 2020.
- Selling, General and Administrative Expenses:
GAAP selling, general and administrative (SG&A) expenses in the
first quarter of 2021 were $4.0 million, compared to $3.8 million
for the first quarter of 2020.
- Financial Guidance:
- 2021 Operating Expenses: Otonomy expects that
GAAP operating expenses will be in the range of $46-$48 million,
and that non-GAAP operating expenses will be in the range of
$38-$40 million.
- Cash Runway: Otonomy expects that its current
cash, cash equivalents, and short-term investments will be
sufficient to fund company operations into the second half of
2023.
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: 9497433. 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.
Non-GAAP Operating Expenses
In this press release, Otonomy’s operating expenses are provided
in accordance with generally accepted accounting principles (GAAP)
in the United States and also on a non-GAAP basis. Non-GAAP
operating expenses exclude stock-based compensation. Non-GAAP
operating expenses are provided as a complement to operating
expenses provided in accordance with GAAP because management
believes non-GAAP operating expenses help indicate underlying
trends in the company’s business, are important in comparing
current results with prior period results and provide additional
information regarding the company’s financial position. Management
also uses non-GAAP operating expenses to establish budgets and
operational goals that are communicated internally and externally
and to manage the company’s business and to evaluate its
performance. The attached financial information includes a
reconciliation of the GAAP operating expenses to non-GAAP operating
expenses and a reconciliation of GAAP operating expense guidance to
non-GAAP operating expense guidance.
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 with a focus on 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 populations for, and timing
of initiation and results for current and planned clinical trials;
Otonomy’s development plans and timelines for its product
candidates and programs; the potential benefits and advantages of
Otonomy’s product candidates and programs; 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 with respect to OTIPRIO,
including Otonomy’s intention to evaluate strategic alternatives
for OTIPRIO, 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; Otonomy’s anticipated upcoming milestones;
expectations regarding operating expenses for 2021 and cash
runway; 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 initiation and progression of, and
enrollment in, its planned and 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 Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission (SEC)
on May 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 March 31, |
|
As of December 31, |
|
2021 |
|
2020 |
|
(unaudited) |
|
|
|
|
Cash and cash equivalents |
$ |
51,016 |
|
|
$ |
30,767 |
|
|
|
|
|
|
|
|
|
Short-term investments |
|
22,813 |
|
|
|
55,576 |
|
|
|
|
|
|
|
|
|
Right-of-use assets |
|
13,724 |
|
|
|
14,082 |
|
|
|
|
|
|
|
|
|
Total assets |
|
93,406 |
|
|
|
106,265 |
|
|
|
|
|
|
|
|
|
Long-term debt, current |
|
1,957 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
Long-term debt, net of current |
|
13,246 |
|
|
|
15,158 |
|
|
|
|
|
|
|
|
|
Leases, net of current |
|
13,440 |
|
|
|
13,847 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
37,382 |
|
|
|
39,999 |
|
|
|
|
|
|
|
|
|
Accumulated deficit |
|
(516,834 |
) |
|
|
(504,624 |
) |
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
56,024 |
|
|
|
66,266 |
|
|
|
|
|
|
|
|
|
Otonomy, Inc. |
Condensed Statements of Operations |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
(unaudited) |
Product sales, net |
$ |
90 |
|
|
$ |
160 |
|
Costs and operating expenses: |
|
|
|
|
Cost of product sales |
|
230 |
|
|
|
214 |
|
|
Research and development |
|
7,660 |
|
|
|
7,672 |
|
|
Selling, general and administrative |
|
4,043 |
|
|
|
3,836 |
|
Total costs and operating expenses |
|
11,933 |
|
|
|
11,722 |
|
Loss from operations |
|
(11,843 |
) |
|
|
(11,562 |
) |
|
|
|
|
|
Other expense, net |
|
(367 |
) |
|
|
(201 |
) |
Net loss |
$ |
(12,210 |
) |
|
$ |
(11,763 |
) |
|
|
|
|
|
Net loss per share, basic and diluted |
$ |
(0.23 |
) |
|
$ |
(0.38 |
) |
|
|
|
|
|
Weighted-average shares used to compute net loss per share, |
|
|
|
basic and diluted |
|
52,319,101 |
|
|
|
30,814,211 |
|
|
|
|
|
|
Otonomy, Inc. |
Reconciliation of GAAP to Non-GAAP Operating
Expenses |
(in thousands) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
GAAP operating expenses |
|
|
|
|
Research and development |
$ |
7,660 |
|
|
$ |
7,672 |
|
|
Selling, general and administrative |
|
4,043 |
|
|
|
3,836 |
|
Total GAAP operating expenses |
|
11,703 |
|
|
|
11,508 |
|
Non-GAAP adjustments |
|
|
|
|
R&D stock-based compensation expense |
|
(800 |
) |
|
|
(568 |
) |
|
SG&A stock-based compensation expense |
|
(1,160 |
) |
|
|
(841 |
) |
Total non-GAAP adjustments |
|
(1,960 |
) |
|
|
(1,409 |
) |
Non-GAAP operating expenses |
$ |
9,743 |
|
|
$ |
10,099 |
|
|
|
|
|
|
Otonomy, Inc. |
Reconciliation of 2021 GAAP to Non-GAAP Operating Expense
Guidance |
(in millions) |
|
|
|
|
|
|
GAAP operating expenses |
$46 - $48 |
Non-GAAP adjustments |
|
|
Stock-based compensation expense |
$8 |
Non-GAAP operating expenses |
$38 - $40 |
|
|
|
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