Otonomy Reports Fourth Quarter and Full Year 2015 Financial Results and Provides Corporate Update
March 09 2016 - 7:46PM
Otonomy, Inc. (NASDAQ:OTIC), a 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 and year ended December 31, 2015
and provided an update on its corporate activities and product
pipeline. The company will host a webcast and conference call today
at 4:30 p.m. ET to discuss recent highlights and financial results.
Fourth Quarter 2015 and Subsequent
Highlights
- Obtained FDA Approval and Initiated Commercial Launch
of OTIPRIO™ for the Treatment of
Pediatric Patients Undergoing Tympanostomy Tube Placement
Surgery: In December 2015, the U.S. Food and Drug
Administration (FDA) approved OTIPRIO (ciprofloxacin otic
suspension) for the treatment of pediatric patients with bilateral
otitis media with effusion undergoing tympanostomy tube placement
(TTP). Hiring and training of Otonomy’s 40-person salesforce is
complete, and sales calls are underway. The company is targeting
approximately 2,000 physicians and 800 facilities that account for
nearly 70% of the one million TTP procedures performed each year in
the U.S. In March 2016, the company announced the availability of
OTIPRIO for purchase. The company also submitted applications to
the Centers for Medicare and Medicaid Services (CMS) requesting the
assignment of both a unique J code and C code for OTIPRIO.
- Advanced Clinical Development of OTIPRIO in Two
Expansion Indications: In December 2015, Otonomy announced
the completion of a Phase 2 clinical trial for patients with acute
otitis externa (swimmer’s ear) that demonstrated a clinical cure
rate of greater than 80% for patients treated with a 0.2mL dose.
The company intends to meet with the FDA to discuss the
requirements for registration of OTIPRIO in this indication and
then initiate the required clinical program in the first half of
2016. In 2015, Otonomy also completed a Phase 2 feasibility trial
for OTIPRIO in pediatric patients with acute otitis media with
tympanostomy tubes (AOMT), and in March 2016, the company announced
the initiation of a second Phase 2 trial to identify the preferred
dose for further development.
- Initiated Patient Enrollment in OTO-104 Phase 3
Clinical Program for Ménière's Disease and Announced Plan to Pursue
Hearing Loss Indication: In November 2015, Otonomy
initiated patient enrollment in a U.S. Phase 3 clinical trial of
OTO-104 in Ménière's disease. The company expects to initiate a
second Phase 3 clinical trial in the European Union during the
first quarter of 2016. In January 2016, Otonomy announced the
publication of a preclinical study supporting the evaluation of
OTO-104 in the prevention of hearing loss in cancer patients
undergoing chemotherapy with platinum-based agents. The company has
completed a pre-IND review by the FDA and expects to initiate a
Phase 2 clinical trial in pediatric patients receiving cisplatin
treatment in the second half of 2016.
- Initiated Phase 1 Clinical Safety Trial of OTO-311,
Product Candidate for Tinnitus: In November 2015, Otonomy
initiated enrollment of healthy subjects in a Phase 1 clinical
safety trial of OTO-311. OTO-311 is a sustained-exposure
formulation of the potent and selective N-Methyl-D-Aspartate (NMDA)
receptor antagonist gacyclidine which is being developed as a
potential treatment for tinnitus. OTO-311 is given as a single
unilateral intratympanic injection.
- Initiated Development on Fourth Program that Targets
Age-Related Hearing Loss: In October 2015, Otonomy
announced the acquisition of rights to multiple product candidates
and initiation of formulation and preclinical development
activities for a fourth program addressing sensorineural hearing
loss. The company believes that this indication which includes
age-related hearing loss represents the largest market opportunity
within the otology field. This effort is focused on several
possible treatment approaches including the repair of ribbon
synapses and the regeneration of cochlear hair cells.
- Raised $115 Million in Gross Proceeds from Public
Offering of Common Stock: In January 2016, Otonomy
announced the closing of an underwritten public offering of
5,750,000 shares of its common stock (including 750,000 shares sold
pursuant to the underwriters' full exercise of their option to
purchase additional shares) at a price to the public of $20.00 per
share. Total gross proceeds were $115 million before deducting
underwriting discounts, commissions and other offering
expenses.
“During 2015 we achieved a number of significant milestones
including receiving FDA approval of OTIPRIO for use in pediatric
patients during ear tube surgery, initiating Phase 3 for OTO-104 in
Ménière's disease, initiating clinical development of OTO-311 for
tinnitus, and acquiring assets and expanding our pipeline with the
initiation of preclinical development of a fourth program targeting
age-related hearing loss,” said David A. Weber, Ph.D., president
and CEO of Otonomy. “We are focused on driving a successful launch
of OTIPRIO and to that end, we have hired, trained, and deployed
our highly experienced salesforce who are now calling on target
customers. In addition, our recent financing has enabled us to
expand the scope of our development efforts in 2016 to include a
registration program for OTIPRIO in acute otitis externa and the
initiation of a Phase 2 trial for OTO-104 in pediatric patients
undergoing cisplatin chemotherapy treatment. We look forward to
providing updates on OTIPRIO’s commercial launch which we believe,
together with our advancing pipeline, should build significant
value for shareholders throughout 2016.”
Anticipated Upcoming Milestones
- Initiation of the EU Phase 3 clinical trial for OTO-104 in
patients with Ménière's disease is expected to occur during the
first quarter of 2016.
- Completion of discussions with the FDA and initiation of a
Phase 3 program for OTIPRIO in patients with acute otitis externa
is expected during the first half of 2016.
- Completion of a Phase 2 clinical trial of OTIPRIO in AOMT
patients is expected in the second half of 2016.
- Completion of the Phase 1 clinical safety trial for OTO-311 is
expected in the first half of 2016 with initiation of a Phase 2
clinical trial in tinnitus patients expected in the second half of
2016.
- Initiation of a Phase 2 clinical trial for OTO-104 in pediatric
patients undergoing cisplatin chemotherapy treatment is expected in
the second half of 2016.
Fourth Quarter and Full Year 2015 Financial
Highlights
- Cash Position: Cash, cash equivalents, and
short-term investments totaled $184.8 million as of December 31,
2015, compared to $156.0 million as of December 31, 2014. This
total for 2015 does not include proceeds of $107.6 million net of
underwriting discounts, commissions and offering-related
transaction costs from a public offering completed in January
2016.
- Operating Expenses: GAAP operating expenses
were $21.1 million for the fourth quarter of 2015, compared to $9.9
million for the fourth quarter of 2014. For the full year 2015,
GAAP operating expenses were $62.0 million compared to $39.6
million for 2014. Non-GAAP operating expenses, which exclude
stock-based compensation expense, were $18.8 million for the fourth
quarter of 2015, compared to $9.1 million for the fourth quarter of
2014. For the full year 2015, non-GAAP operating expenses were
$54.3 million compared to $37.9 million for 2014
- Research and Development Expenses: GAAP
research and development (R&D) expenses for the fourth quarter
of 2015 were $13.3 million, compared to $7.2 million for the fourth
quarter of 2014. The increase was primarily a result of increased
personnel costs, including stock-based compensation expense,
increased preclinical and clinical 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 clinical trial during
December 2014. For the full year 2015, GAAP R&D expenses were
$38.8 million compared to $31.8 million for 2014. Non-GAAP R&D
expenses were $12.4 million for the fourth quarter of 2015,
compared to $6.9 million for the fourth quarter of 2014. For the
full year 2015, non-GAAP R&D expenses were $35.8 million
compared to $31.0 million for 2014.
- General and Administrative Expenses: GAAP
general and administrative (G&A) expenses in the fourth quarter
of 2015 were $7.8 million, compared to $2.7 million for the fourth
quarter of 2014. The increase was primarily attributable to
increased personnel costs, including stock-based compensation
expense, expanded operating activities and costs related to
commercial preparation activities. For the full year 2015, GAAP
G&A expenses were $23.2 million compared to $7.8 million for
2014. Non-GAAP G&A expenses were $6.4 million for the fourth
quarter of 2015, compared to $2.2 million for the fourth quarter of
2014. For the full year 2015, non-GAAP G&A expenses were $18.5
million compared to $6.9 million for 2014.
- Financial Guidance: Otonomy does not plan to
update its financial guidance for 2016 until completion of the
end-of-phase 2 meeting with the FDA for OTIPRIO in otitis externa
and clarification of the program’s scope and expense. Previously
the company said it expects 2016 non-GAAP operating expenses in the
range of $90-$95 million.
Non-GAAP Financial Measures
In this press release, Otonomy’s 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 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 these non-GAAP financial
measures to establish budgets and operational goals that are
communicated internally and externally and to manage the company's
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.
Conference Call and Webcast
Otonomy management will host a webcast and conference call
regarding this announcement 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 code number: 61289571. A live webcast and archive of the
call will be available from the investor relations section of the
company website at www.otonomy.com. A telephone replay of the call
will be available by dialing (855) 859-2056 for domestic callers or
(404) 537-3406 for international callers and entering the
conference code number: 61289571.
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, and commercial launch commenced in March 2016.
OTO-104 is a steroid in development for the treatment of Ménière's
disease and other severe balance and hearing disorders. A Phase 3
trial in Ménière's disease patients is underway in the United
States with a second trial expected to be initiated in the European
Union during the first quarter of 2016. OTO-311 is an NMDA receptor
antagonist for the treatment of tinnitus that is in a Phase 1
clinical safety trial. 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 future financial or operating performance of Otonomy.
Forward-looking statements in this press release include, but are
not limited to, Otonomy's expectations regarding meeting with the
FDA and timing of initiation of the OTIPRIO registration program
for patients with acute otitis externa, the timing of completion of
the second OTIPRIO Phase 2 clinical trial in AOMT patients, the
timing of initiation of the OTO-104 Phase 2 clinical trial for
cisplatin-induced hearing loss, the timing of initiation of the
OTO-104 Phase 3 clinical trial for Ménière's disease in the
European Union, the timing of the OTO-311 Phase 1 and Phase 2
clinical trials, the market opportunity for Otonomy’s fourth
program, financial guidance for 2016, and the statement by the
company’s CEO regarding expectations for 2016. 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, such as OTO-104 and OTO-311; the
uncertainties inherent in the drug development process, including,
without limitation, Otonomy's 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, 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 preclinical studies and clinical trials; 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 Annual Report on Form 10-K filed with the
Securities and Exchange Commission (the "SEC") on March 7, 2016,
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.
|
Otonomy, Inc. |
|
Condensed Balance Sheet Data |
|
(in thousands) |
|
|
|
|
|
|
|
As of December 31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
158,664 |
|
|
$ |
139,810 |
|
|
|
|
|
|
|
Short-term
investments |
|
26,172 |
|
|
|
16,223 |
|
|
|
|
|
|
|
Total assets |
|
193,030 |
|
|
|
159,164 |
|
|
|
|
|
|
|
Total liabilities |
|
11,496 |
|
|
|
5,551 |
|
|
|
|
|
|
|
Accumulated
deficit |
|
(164,137 |
) |
|
|
(102,469 |
) |
|
|
|
|
|
|
Total stockholders'
equity |
|
181,534 |
|
|
|
153,613 |
|
|
|
|
|
|
Otonomy, Inc. |
Condensed Statements of
Operations |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and
development |
$ |
13,277 |
|
|
$ |
7,187 |
|
|
$ |
38,762 |
|
|
$ |
31,803 |
|
|
General and
administrative |
|
7,869 |
|
|
|
2,667 |
|
|
|
23,214 |
|
|
|
7,836 |
|
Total
operating expenses |
|
21,146 |
|
|
|
9,854 |
|
|
|
61,976 |
|
|
|
39,639 |
|
Loss from
operations |
|
(21,146 |
) |
|
|
(9,854 |
) |
|
|
(61,976 |
) |
|
|
(39,639 |
) |
|
|
|
|
|
|
|
|
|
Other
income (expense) |
|
4 |
|
|
|
60 |
|
|
|
308 |
|
|
|
(3,238 |
) |
Net
loss |
|
(21,142 |
) |
|
|
(9,794 |
) |
|
|
(61,668 |
) |
|
|
(42,877 |
) |
Accretion
to redemption value of convertible preferred stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(35 |
) |
Net loss attributable to common stockholders |
$ |
(21,142 |
) |
|
$ |
(9,794 |
) |
|
$ |
(61,668 |
) |
|
$ |
(42,912 |
) |
|
|
|
|
|
|
|
|
|
Net loss
per share attributable to common stockholders, |
|
|
|
|
|
|
|
|
basic and diluted |
$ |
(0.87 |
) |
|
$ |
(0.46 |
) |
|
$ |
(2.57 |
) |
|
$ |
(5.46 |
) |
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net loss per share |
|
|
|
|
|
|
|
|
attributable to common
stockholders, basic and diluted |
|
24,262,874 |
|
|
|
21,158,394 |
|
|
|
23,952,562 |
|
|
|
7,853,228 |
|
|
|
|
|
|
|
|
|
|
Otonomy, Inc. |
Reconciliation of GAAP to Non-GAAP Financial
Information |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
Reconciliation of GAAP to non-GAAP operating
expenses |
|
|
|
|
|
|
|
GAAP
operating expenses |
$ |
21,146 |
|
|
$ |
9,854 |
|
|
$ |
61,976 |
|
|
$ |
39,639 |
|
Non-GAAP
adjustment |
|
|
|
|
|
|
|
|
Stock-based
compensation expense (1) |
|
(2,395 |
) |
|
|
(797 |
) |
|
|
(7,716 |
) |
|
|
(1,692 |
) |
Non-GAAP
operating expenses |
$ |
18,751 |
|
|
$ |
9,057 |
|
|
$ |
54,260 |
|
|
$ |
37,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to non-GAAP net loss
attributable |
|
|
|
|
|
|
|
to common
stockholders |
|
|
|
|
|
|
|
GAAP net
loss attributable to common stockholders |
$ |
(21,142 |
) |
|
$ |
(9,794 |
) |
|
$ |
(61,668 |
) |
|
$ |
(42,912 |
) |
Non-GAAP
adjustment |
|
|
|
|
|
|
|
|
Stock-based
compensation expense (1) |
|
2,395 |
|
|
|
797 |
|
|
|
7,716 |
|
|
|
1,692 |
|
Non-GAAP
net loss attributable to common stockholders |
$ |
(18,747 |
) |
|
$ |
(8,997 |
) |
|
$ |
(53,952 |
) |
|
$ |
(41,220 |
) |
|
|
|
|
|
|
|
|
|
GAAP net
loss per share attributable to common stockholders, |
|
|
|
|
|
|
|
|
basic and diluted |
$ |
(0.87 |
) |
|
$ |
(0.46 |
) |
|
$ |
(2.57 |
) |
|
$ |
(5.46 |
) |
Non-GAAP
adjustment |
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
0.10 |
|
|
|
0.04 |
|
|
|
0.32 |
|
|
|
0.22 |
|
Non-GAAP
net loss attributable to common stockholders, |
|
|
|
|
|
|
|
basic and diluted |
$ |
(0.77 |
) |
|
$ |
(0.43 |
) |
|
$ |
(2.25 |
) |
|
$ |
(5.25 |
) |
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net loss per share |
|
|
|
|
|
|
|
|
attributable to common
stockholders, basic and diluted |
|
24,262,874 |
|
|
|
21,158,394 |
|
|
|
23,952,562 |
|
|
|
7,853,228 |
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
Includes
R&D-related stock-based compensation expense of: |
$ |
875 |
|
|
$ |
353 |
|
|
$ |
2,969 |
|
|
$ |
760 |
|
|
Includes
G&A-related stock-based compensation expense of: |
$ |
1,520 |
|
|
$ |
444 |
|
|
$ |
4,747 |
|
|
$ |
932 |
|
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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