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Press Release
Second Quarter 2017 and Subsequent Highlights
- Completed Enrollment in the U.S. Phase 3 AVERTS-1 Trial for OTIVIDEX™ in Ménière’s Disease, Results Expected in
September 2017 : Otonomy is conducting two identical, parallel Phase 3 trials for OTIVIDEX (formerly known as OTO-104) in patients with Ménière’s disease, AVERTS-1 in the United States and AVERTS-2 in Europe. Each trial is a 16-week, prospective, randomized, double-blind, placebo-controlled trial designed to enroll approximately 160 patients with unilateral Ménière’s disease. The AVERTS-1 trial is fully enrolled with a total of 165 patients, and topline data are expected next month. Enrollment is nearly complete in the AVERTS-2 trial with greater than 160 patients already enrolled and final patients in lead-in. Topline data are expected by the end of 2017.
- Hosted Key Opinion Leader (KOL) Meeting on Ménière's disease: In June,
Otonomy hosted a KOL meeting on Ménière's disease inNew York with presentations byPaul R. Lambert , M.D., Professor and Chair,Department of Otolaryngology-Head & Neck Surgery ,Medical University of South Carolina , andAnthony A. Mikulec , M.D., MBA, Professor, Chief of Otology and Neurotology,Saint Louis University School of Medicine . Additionally,Kathie M. Bishop , Ph.D., chief scientific officer ofOtonomy , provided an updated analysis of the OTIVIDEX Phase 2b results based on the Phase 3 target patient population, and reviewed the program timeline.
- sNDA Filing Accepted and PDUFA Action Date Assigned for OTIPRIO® in Acute Otitis Externa (AOE): In July,
Otonomy announced that its Supplemental New Drug Application (sNDA) for the approval of OTIPRIO (ciprofloxacin otic suspension) as a treatment for patients with AOE was accepted for filing by theU.S. Food and Drug Administration (FDA ) and assigned a Prescription Drug User Fee Act (PDUFA) action date ofMarch 2, 2018 . The acceptance of the sNDA indicates that the application is sufficiently complete to permit a substantive review by theFDA .
- Completed Successful End-of-Phase 2 Review by
FDA for OTIPRIO in Acute Otitis Media with Tympanostomy Tubes (AOMT): In June,Otonomy successfully completed an End-of-Phase 2 review with theFDA for OTIPRIO in the treatment of pediatric patients with AOMT. Based on the feedback received from theFDA ,Otonomy plans to conduct a single, sham controlled, pivotal Phase 3 trial enrolling approximately 200 pediatric patients with AOMT to support approval of OTIPRIO for this indication. The timing for initiation of this trial has not yet been determined.
- Completed Reorganization of OTIPRIO Sales Team: Otonomy announced a number of changes to its commercial organization in March to increase the focus on OTIPRIO utilization and improve sales performance, including the hiring of a new vice president of sales and realignment of the sales territories that resulted in a reduction from 40 to 20 sales representatives. During the second quarter, the company replaced nearly all of the remaining 20 sales representatives with individuals having significant sales experience in the ENT field with products routinely used in the hospital operating room setting. As a result of the nearly complete changeover of the sales organization which was initiated in the first quarter and completed at the end of June, there was limited sales support during the second quarter. Despite the limited selling effort and declining procedure volume due to seasonality, end user demand for OTIPRIO in the second quarter (1,260 vials) continued at roughly the same level as in the first quarter (1,334 vials).
- Presented OTIPRIO Data and Held Symposium at the
American Society of Pediatric Otolaryngology (ASPO ) Annual Meeting: At the 2017 ASPO Annual Meeting in May,Otonomy presented results from an OTIPRIO Phase 3b clinical trial conducted in a broad pediatric population undergoing TTP surgery and Phase 2 results from a trial in pediatric patients with AOMT.Otonomy also sponsored a symposium relating to reimbursement of physician administered drugs such as OTIPRIO under the medical benefit reimbursement system.
- Continued Patient Enrollment for Phase 2 Trial of OTIVIDEX in Hearing Loss Indication:
Otonomy continued enrollment in its Phase 2 trial evaluating OTIVIDEX for the prevention of hearing loss in pediatric cancer patients undergoing chemotherapy with platinum-based agents. This multicenter trial is designed to assess the feasibility, safety and exploratory efficacy of OTIVIDEX given by intratympanic administration in subjects at risk for ototoxicity from cisplatin chemotherapy.
“We are on track with our commitments for 2017 to be the year of Ménière’s disease with results of the OTIVIDEX AVERTS-1 trial expected in September and European AVERTS-2 trial expected by end of year. While this is an important milestone for
Anticipated Upcoming Milestones
- Announcement of topline data from the AVERTS-1 Phase 3 trial of OTIVIDEX in Ménière’s disease patients in September and topline data from the AVERTS-2 trial by the end of 2017.
- Initiation of a Phase 2 clinical trial for OTO-311 for the treatment of patients with tinnitus by the end of 2017.
Second Quarter Financial Highlights
- Cash Position: Cash, cash equivalents, and short-term investments totaled
$150.5 million as ofJune 30, 2017 , compared to$196.4 million as ofDecember 31, 2016 .
- Revenue: Net sales of OTIPRIO totaled
$0.3 million for the second quarter of 2017 compared to$0.1 million for the second quarter of 2016.
- Operating Expenses: GAAP operating expenses were
$23.5 million for the second quarter of 2017, compared to$29.6 million for the second quarter of 2016. Non-GAAP operating expenses, which exclude stock-based compensation and rent abatement expense, were$19.3 million for the second quarter of 2017, compared to$26.4 million for the second quarter of 2016.
- Research and Development Expenses: GAAP research and development (R&D) expenses for the second quarter of 2017 were
$12.7 million , compared to$16.7 million for the second quarter of 2016. The decrease was primarily a result of decreased clinical trial activities for OTIPRIO versus the prior year period.
- Selling, General and Administrative Expenses: GAAP selling, general and administrative (SG&A) expenses in the second quarter of 2017 were
$10.8 million , compared to$12.9 million for the second quarter of 2016. The decrease was primarily related to reduced commercial personnel costs.
- Financial Guidance:
Otonomy reaffirms its expectations that GAAP operating expenses will be in the range of$103-$108 million for 2017, and that non-GAAP operating expenses will be in the range of$80-$85 million for 2017.
Webcast and Conference Call
Non-GAAP Operating Expenses
In this press release, Otonomy’s operating expenses are provided in accordance with generally accepted accounting principles (GAAP) in
About OTIPRIO®
OTIPRIO (ciprofloxacin otic suspension) is a fluoroquinolone antibacterial indicated for the treatment of pediatric patients with bilateral otitis media with effusion undergoing tympanostomy tube placement. OTIPRIO is administered by a physician as a single 0.1 mL (6 mg) intratympanic administration into each affected ear, following suctioning of the middle ear effusion. The thermosensitive suspension exists as a liquid at or below room temperature and gels when warmed. In two Phase 3 trials, a single intraoperative administration of OTIPRIO demonstrated a statistically significant reduction in the cumulative proportion of study treatment failures compared to tubes alone (p-value <0.001).
Important Safety Information for OTIPRIO
Contraindications: OTIPRIO is contraindicated in patients with a history of hypersensitivity to ciprofloxacin, to other quinolones, or to any of the components of OTIPRIO.
Warnings and Precautions - Potential for Microbial Overgrowth: OTIPRIO may result in overgrowth of nonsusceptible bacteria and fungi. If such infections occur, institute alternative therapy.
Adverse Reactions: Adverse reactions (incidence at least 3%) that occurred in two Phase 3 trials with OTIPRIO vs sham were: nasopharyngitis (5% vs 4%), irritability (5% vs 3%), and rhinorrhea (3% vs 2%).
Use in Specific Populations - Pediatric Use: The safety and effectiveness of OTIPRIO in infants below six months of age have not been established.
Full prescribing information can be found at www.OTIPRIO.com.
About
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, Inc. | ||||||||
Condensed Balance Sheet Data | ||||||||
(in thousands) | ||||||||
As of June 30, | As of December 31, | |||||||
2017 | 2016 | |||||||
(unaudited) | ||||||||
Cash and cash equivalents | $ | 22,332 | $ | 24,156 | ||||
Short-term investments | 128,200 | 172,222 | ||||||
Total assets | 161,686 | 208,596 | ||||||
Total liabilities | 11,624 | 15,859 | ||||||
Accumulated deficit | (325,019 | ) | (274,720 | ) | ||||
Total stockholders' equity | 150,062 | 192,737 | ||||||
Otonomy, Inc. | ||||||||||||||||
Condensed Statements of Operations | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(unaudited) | ||||||||||||||||
Product sales, net | $ | 326 | $ | 76 | $ | 684 | $ | 89 | ||||||||
Costs and operating expenses: | ||||||||||||||||
Cost of product sales | 397 | 395 | 860 | 404 | ||||||||||||
Research and development | 12,714 | 16,742 | 25,899 | 30,614 | ||||||||||||
Selling, general and administrative | 10,747 | 12,846 | 24,839 | 25,841 | ||||||||||||
Total costs and operating expenses | 23,858 | 29,983 | 51,598 | 56,859 | ||||||||||||
Loss from operations | (23,532 | ) | (29,907 | ) | (50,914 | ) | (56,770 | ) | ||||||||
Other income (expense) | 311 | 231 | 615 | 331 | ||||||||||||
Net loss | $ | (23,221 | ) | $ | (29,676 | ) | $ | (50,299 | ) | $ | (56,439 | ) | ||||
Net loss per share, basic and diluted | $ | (0.77 | ) | $ | (0.98 | ) | $ | (1.66 | ) | $ | (1.90 | ) | ||||
Weighted-average shares used to compute net loss per share, | ||||||||||||||||
basic and diluted | 30,269,190 | 30,128,150 | 30,263,042 | 29,728,477 | ||||||||||||
Otonomy, Inc. | ||||||||||||||||
Reconciliation of GAAP to Non-GAAP Operating Expenses | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(unaudited) | ||||||||||||||||
GAAP operating expenses | ||||||||||||||||
Research and development | $ | 12,714 | $ | 16,742 | $ | 25,899 | $ | 30,614 | ||||||||
Selling, general and administrative | 10,747 | 12,846 | 24,839 | 25,841 | ||||||||||||
Total GAAP operating expenses | 23,461 | 29,588 | 50,738 | 56,455 | ||||||||||||
Non-GAAP adjustments | ||||||||||||||||
R&D stock-based compensation expense | (1,359 | ) | (778 | ) | (2,344 | ) | (1,425 | ) | ||||||||
SG&A stock-based compensation expense | (2,126 | ) | (2,444 | ) | (4,861 | ) | (4,533 | ) | ||||||||
Rent abatement | (695 | ) | - | (1,389 | ) | - | ||||||||||
Total non-GAAP adjustments | (4,180 | ) | (3,222 | ) | (8,594 | ) | (5,958 | ) | ||||||||
Non-GAAP operating expenses | $ | 19,281 | $ | 26,366 | $ | 42,144 | $ | 50,497 | ||||||||
Otonomy, Inc. | ||
Reconciliation of 2017 GAAP to Non-GAAP Operating Expense Guidance | ||
(in millions) | ||
GAAP operating expenses | $103 - $108 | |
Non-GAAP adjustments | ||
Stock-based compensation expense | 21 | |
Rent abatement | 2 | |
Non-GAAP operating expenses | $80 - $85 | |
Contacts: Media InquiriesCanale Communications Heidi Chokeir, Ph.D. Senior Vice President 619.849.5377 heidi@canalecomm.com Investor InquiriesWestwicke Partners Robert H. Uhl Managing Director 858.356.5932 robert.uhl@westwicke.com