Otonomy Reports Second Quarter 2017 Financial Results and Provides Corporate Update
August 03 2017 - 3:12PM
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 ended June 30, 2017 and provided
an update on its corporate activities and product pipeline.
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 in New York with presentations by Paul R.
Lambert, M.D., Professor and Chair, Department of
Otolaryngology-Head & Neck Surgery, Medical University of South
Carolina, and Anthony 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 of
Otonomy, 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 the U.S. Food and
Drug Administration (FDA) and assigned a Prescription Drug User Fee
Act (PDUFA) action date of March 2, 2018. The acceptance of the
sNDA indicates that the application is sufficiently complete to
permit a substantive review by the FDA.
- 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 the FDA for OTIPRIO in the treatment of
pediatric patients with AOMT. Based on the feedback received from
the FDA, 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 Otonomy, it is
also a significant event for patients who are seeking new treatment
options as reviewed by Drs. Lambert and Mikulec at our recent
Ménière’s KOL breakfast event,” said David A. Weber, Ph.D.,
president and CEO of Otonomy. “We also made progress during the
second quarter in executing our strategy to build a successful
OTIPRIO brand. We completed our commercial reorganization and
expect that the new sales team will be able to leverage their
pre-existing ENT relationships and familiarity with the hospital
operating room setting to increase OTIPRIO utilization during ear
tube surgery. We also completed a successful End-of-Phase 2 review
with FDA for AOMT, and received acceptance of filing of the sNDA
and our PDUFA date for AOE. The March 2018 PDUFA date is consistent
with our previous guidance and, importantly, ahead of the peak
summer season for treating AOE."
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 of June 30, 2017,
compared to $196.4 million as of December 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
Otonomy management will host a webcast and conference call
regarding this announcement at 4:30 p.m. EDT/1:30 p.m. PDT 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: 61094339. 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 and rent
abatement expense. 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 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 OtonomyOtonomy 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, an sNDA has been accepted for filing by the FDA
for acute otitis externa (AOE) and a successful End-of-Phase 2
review has been completed with the FDA for acute otitis media with
tympanostomy tubes (AOMT). OTIVIDEX™ is a steroid in development
for the treatment of Ménière's disease and other balance and
hearing disorders. Two Phase 3 trials in Ménière's disease patients
are ongoing, AVERTS-1 in the United States and AVERTS-2 in Europe,
with AVERTS-1 results expected in September 2017 and AVERTS-2
results expected by the end of 2017. In addition, a Phase 2 trial
of OTIVIDEX is ongoing in patients at risk for cisplatin-induced
hearing loss. OTO-311 is an NMDA receptor antagonist for the
treatment of tinnitus that has completed a Phase 1 clinical safety
trial with a Phase 2 trial expected to be initiated by the end of
2017. A fourth program targeting sensorineural hearing loss
including age-related hearing loss is in preclinical development.
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 the future financial or operating performance of Otonomy.
Forward-looking statements in this press release include, but are
not limited to, the timing of Phase 3 results for OTIVIDEX, plans
for a Phase 3 clinical trial for OTIPRIO in AOMT, the timing of a
Phase 2 clinical trial for OTO-311, statements by Otonomy’s
president and CEO, and Otonomy’s financial guidance for 2017.
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 OTIVIDEX and OTO-311, and
label expansion indications for OTIPRIO; 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
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 nonclinical studies and clinical trials; the timing and
outcome of hospital pharmacy and therapeutics reviews and other
facility reviews; the impact of coverage and reimbursement
decisions by third-party payors on the pricing and market
acceptance of OTIPRIO; 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-Q filed with the Securities and Exchange
Commission (the "SEC") on August 3, 2017, 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 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 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
Otonomy (NASDAQ:OTIC)
Historical Stock Chart
From Apr 2024 to May 2024
Otonomy (NASDAQ:OTIC)
Historical Stock Chart
From May 2023 to May 2024