Otonomy OTO-413 — Treatment of Hidden Hearing Loss

[tommyd87]

It's not just OTIVIDEX. OTIPRIO has been a disappointment for them too. It passed its Phase 3 study and made it to market, but it only generates around $600k in revenue for them a year. According to their financial guidance, they have enough money to fund the company for 2 years. That's not really enough time to get OTO-313 and OTO-413 out the door. The only way that would work is if they completed a successful Phase 2 study for one of those drugs (probably OTO-313) and then raised more capital. I suppose this path would be a possibility, but it would put some serious strain on the company.

There's three things I'd say in relation to this.

1. OTIPRIO is still a fairly new medicine and as a result I think it will take time to get a bigger market and bigger demand. For example you cannot get it in countries like Australia yet. As a result if availability is limited to just US at present then this is really going to limit the amount of money it generates.

2. The funding issue might seem concerning in the short term, however I think that it is still too premature to assume that this therefore means a questionable outlook for Otonomy. One thing that I think we will see is further funding from other sources such as shareholders as you have stated if they have success with other medicines or clinical trials.

The other thing worth noting is that they have reached the agreement with the Japanese company Kyorin to do the OTO-6XX clinical trials. There seems to be a real likelihood that Kyorin would know Otonomy could get the clinical trials done for OTO-6XX as it is almost unfathomable to think that Kyorin would sign an agreement with another company who couldn't get this done. They seem to also have the cash available to do the Phase 2 clinical trials for both OTO-413 and OTO-313.

3. I reckon that part of the reason Otonomy has stated that they only have 2 years of cash available is for accurate stock and financial reporting.

 

[Lucifer]

Anyone reckon Big Pharma such as Astellas will buy the rights of OTO-413 etc? I feel like OTO-413 is Otonomy's most promising drug that would complement with FX-322.

 

[Aaron91]

Anyone reckon Big Pharma such as Astellas will buy the rights of OTO-413 etc? I feel like OTO-413 is Otonomy's most promising drug that would complement with FX-322.

It may be the case that some of us here need both these drugs, so let's hope not, because there is a history of drug companies buying up biotechs with innovative treatments (at least in Europe, don't know about the US) in order to make sure a potential competitor never reaches the market. Obviously we're talking about rights here, which is slightly different, although still somewhat applicable depending on how far the rights go.

 

[Diesel]

Anyone reckon Big Pharma such as Astellas will buy the rights of OTO-413 etc? I feel like OTO-413 is Otonomy's most promising drug that would complement with FX-322.

Not likely. Usually distribution agreements include a non-conflict clause where both parties agree not to work with direct competitors.

Otonomy probably already has either their own preferred international manufacturer or US-based contract manufacturer.

 

[patorjk]

I noticed that last night the following Otonomy employees were given these stock options: [1]

David Weber (CEO) - 500k at $5.2 (per share)
Michael Savel (CTO) - 150k at $5.2
Paul Cayer (CFO) - 250k at $5.2

Something similar happened at Frequency Therapeutics the day before: [2]

Christopher Loose (CSO) - 70k at $35.85
David Lucchino (CEO) - 200k at $35.85
Wendy Arnold (CPO) - 75k at $35.85
Carl LeBel (CDO) - 75k at $35.85
Charles Dana (CMO) - 70k at $35.85
Peter Pfreundschuh - 10k at $35.85

I'm not sure if it's standard practice to give stock options before trial results, but I've heard that options at market price are a good sign since it encourages management to make the company successful and better cements certain employees into the company.

It may be a mistake to read too deeply into this (especially since there's no way to affect the trial at this point), but at least it is a sign that there is a strong incentive in place for success.

[1] https://investors.otonomy.com/sec-filings
[2] https://investors.frequencytx.com/sec-filings

 

[Diesel]

I noticed that last night the following Otonomy employees were given these stock options: [1]

David Weber (CEO) - 500k at $5.2 (per share)
Michael Savel (CTO) - 150k at $5.2
Paul Cayer (CFO) - 250k at $5.2

Something similar happened at Frequency Therapeutics the day before: [2]

Christopher Loose (CSO) - 70k at $35.85
David Lucchino (CEO) - 200k at $35.85
Wendy Arnold (CPO) - 75k at $35.85
Carl LeBel (CDO) - 75k at $35.85
Charles Dana (CMO) - 70k at $35.85
Peter Pfreundschuh - 10k at $35.85

I'm not sure if it's standard practice to give stock options before trial results, but I've heard that options at market price are a good sign since it encourages management to make the company successful and better cements certain employees into the company.

It may be a mistake to read too deeply into this (especially since there's no way to affect the trial at this point), but at least it is a sign that there is a strong incentive in place for success.

[1] https://investors.otonomy.com/sec-filings
[2] https://investors.frequencytx.com/sec-filings

Non-issue. They're options awarded to execs. Keeps them focused on growing the business. The Frequency Therapeutics options don't fully vest until 2025, so they're just paper right now.

 

[Philip83]

Did anyone watch the "H.C. Wainwright BioConnect 2021 Conference" webinar?

H.C. Wainwright BioConnect 2021 Conference

I didn't yet.

 

[Drachen]

Has there been any further news on the progress of establishing the next clinical trial?

I'm really hoping for this marvel to move along as smoothly (if not moreso) than FX-322...

 

[patorjk]

Did anyone watch the "H.C. Wainwright BioConnect 2021 Conference" webinar?

H.C. Wainwright BioConnect 2021 Conference

I didn't yet.

I watched it when it first came out, no new news that I remember.

I think Otividex is their main priority right now. Once the jury is in on that drug, they'll probably lay out their plans for OTO-313 and OTO-413 (and hopefully OTO-6XX).

 

[tommyd87]

Not likely. Usually distribution agreements include a non-conflict clause where both parties agree not to work with direct competitors.

Otonomy probably already has either their own preferred international manufacturer or US-based contract manufacturer.

Not to mention Otonomy is already working with another firm (Kyorin) to trial a hair cell medicine.

Has there been any further news on the progress of establishing the next clinical trial?

I'm really hoping for this marvel to move along as smoothly (if not moreso) than FX-322...

My feeling is that this is too soon since the trial outcomes were released in December and they haven't even gotten past the 75 day period and then the FDA has to approve things like further trials.

 

[Drachen]

My feeling is that this is too soon since the trial outcomes were released in December and they haven't even gotten past the 75 day period and then the FDA has to approve things like further trials.

Ah, gotcha. I wasn't aware about the 75-day period. Here's hoping they stay on top of things...

Also, welcome back!

 

[patorjk]

There's been a vacuum of news about Otonomy recently, however, I've been following them closely. Most concerning is their share price basically collapsed this month in the lead up to the Otividex Phase 3 results (revenue for this drug will be used to fund the rest of their pipeline). The price peaked at $6.98 late last year, and then went all the way to down $3.95 last week (though it's since bounced up to just under $5).

Someone I follow online contacted their investor relations and apparently the downward pressure was due to a large investor who wanted to sell. Some of us have speculated that it was Steven Cohen, who owns (owned?) several million shares and who also recently got stung in the GameStop short squeeze. It would be kind of crazy if the GameStop stuff is what caused the Otonomy share price collapse. However, long term the price will depend on if Otividex is successful or not. Previously I was worried that if the drug failed it'd put the whole pipeline in danger, including OTO-413, but the more I look at things, I think Otonomy will still be ok if the drug fails - they have enough runway for 2 years, which should allow them to get through a Phase 2 study for OTO-413 and maybe a Phase 3 study too.

Today they announced that on February 11th (a week from today) that they will release "Fourth Quarter and Full Year 2020 Financial Results and Provide Corporate Update". I don't think the Otividex results will be announced in that report, however, I think they could be released before then and then be talked about in the conference call.

Back in 2017 it took them 6 weeks from when the study ended to announce that the trial failed. It's been 7 weeks since when (I estimate) the current trial ended (though the winter holidays did occur in that time). So I think the results could come any day now. Once all of this is out of the way hopefully Otonomy can get back to working on their other drugs.

 

[patorjk]

Otonomy did a press release today and gave a corporate update on their various drugs. Here's what they had to say about OTO-413:

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.​

Hopefully they'll try a higher dose, as that was something they talked about at the end of last year. Kind of sucks that they're doing another Phase 1/2 study, but it makes sense. Phase 2 will have a better chance at success this way.

Full press release:
https://investors.otonomy.com/news-...s-fourth-quarter-and-full-year-2020-financial

 

[FGG]

Otonomy did a press release today and gave a corporate update on their various drugs. Here's what they had to say about OTO-413:

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.​

Hopefully they'll try a higher dose, as that was something they talked about at the end of last year. Kind of sucks that they're doing another Phase 1/2 study, but it makes sense. Phase 2 will have a better chance at success this way.

Full press release:
https://investors.otonomy.com/news-...s-fourth-quarter-and-full-year-2020-financial

That sucks. An extra year until they start Phase 2.

Since their drug is a single injection, they'd have to reformulate to get a higher dose and that's possibly why they are restarting a Phase 1/2 with positive Phase 1 data.

Something to ask them on the future Tinnitus Talk Podcast, I guess.

 

[Aaron91]

Otonomy did a press release today and gave a corporate update on their various drugs. Here's what they had to say about OTO-413:

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.​

Hopefully they'll try a higher dose, as that was something they talked about at the end of last year. Kind of sucks that they're doing another Phase 1/2 study, but it makes sense. Phase 2 will have a better chance at success this way.

Full press release:
https://investors.otonomy.com/news-...s-fourth-quarter-and-full-year-2020-financial

This is the worst possible news. This has literally added at least another 18 months to the timeline we were all expecting. Phase 1/2 results mid-2022? That means they won't start recruiting for Phase 2 until end of 2022/beginning of 2023. We're then looking at another 12-18 months until that read-out. That put us into 2024 without having started a Phase 3 trial, so we're now looking at 2025 release at the very earliest and that's assuming no further delays, which could put it well into 2026 - a whole 5 years away.

They had decent Phase 1 results, so why on earth push the whole thing back 18 months just to refine the initial endpoints?

 

[Jrblovsky]

This is the worst possible news. This has literally added at least another 18 months to the timeline we were all expecting. Phase 1/2 results mid-2022? That means they won't start recruiting for Phase 2 until end of 2022/beginning of 2023. We're then looking at another 12-18 months until that read-out. That put us into 2024 without having started a Phase 3 trial, so we're now looking at 2025 release at the very earliest and that's assuming no further delays, which could put it well into 2026 - a whole 5 years away.

They had decent Phase 1 results, so why on earth push the whole thing back 18 months just to refine the initial endpoints?

You're right. This blows.

 

[frpp]

This is the worst possible news. This has literally added at least another 18 months to the timeline we were all expecting. Phase 1/2 results mid-2022? That means they won't start recruiting for Phase 2 until end of 2022/beginning of 2023. We're then looking at another 12-18 months until that read-out. That put us into 2024 without having started a Phase 3 trial, so we're now looking at 2025 release at the very earliest and that's assuming no further delays, which could put it well into 2026 - a whole 5 years away.

They had decent Phase 1 results, so why on earth push the whole thing back 18 months just to refine the initial endpoints?

10000%. It worked perfectly the first time. High doses saw 57% improvement and placebo saw 0%. How much time and money do these people want to waste?

 

[serendipity1996]

I can only hope that we will see at least a partial resolution of symptoms with a hair cell drug then, since it looks like FX-322 will be out way earlier. I hope that would make the wait less onerous for many of us, whilst we await a synapse drug to get the best outcome.

 

[Diesel]

Otonomy did a press release today and gave a corporate update on their various drugs. Here's what they had to say about OTO-413:

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.​

Hopefully they'll try a higher dose, as that was something they talked about at the end of last year. Kind of sucks that they're doing another Phase 1/2 study, but it makes sense. Phase 2 will have a better chance at success this way.

Full press release:
https://investors.otonomy.com/news-...s-fourth-quarter-and-full-year-2020-financial

Huge fail on their part. This has mismanagement written all over it to be honest.

 

[twa]

I believe the Otonomy treatment is delivered by injection. I want to bring up something my otologist, actually her PA, said when I was at my last appointment. I asked about intratympanic injections for hearing loss. She said they only do it as a last resort because it can hurt/damage/puncture the ear drum. Can someone with extensive knowledge of the process expand on this?

 

[Jrblovsky]

I believe the Otonomy treatment is delivered by injection. I want to bring up something my otologist, actually her PA, said when I was at my last appointment. I asked about intratympanic injections for hearing loss. She said they only do it as a last resort because it can hurt/damage/puncture the ear drum. Can someone with extensive knowledge of the process expand on this?

They do puncture your eardrum and stick a needle through there. I've had them done many times and they are not pleasant. If you do them within 30 days of an acoustic trauma they are supposed to help. However, they say within 72 hours shows way better chances of recovery. It's a shame that they don't educate people of these treatments. I waited two weeks before getting into the doctor being I had no idea it was an emergency. Now I suffer massive hearing losses. I had normal hearing before this.

 

[Gb3]

I believe the Otonomy treatment is delivered by injection. I want to bring up something my otologist, actually her PA, said when I was at my last appointment. I asked about intratympanic injections for hearing loss. She said they only do it as a last resort because it can hurt/damage/puncture the ear drum. Can someone with extensive knowledge of the process expand on this?

FX-322 is by injections as well. It's the only way to get it directly to the round window membrane. I had four and they healed fine.

 

[Shizune]

Absolutely 0% chance of things speeding up at this point now, huh?

Really didn't need to hear this today. This is BS.

 

[UHPTS]

FX-322 is by injections as well. It's the only way to get it directly to the round window membrane. I had four and they healed fine.

You had four injections of FX-322?

 

[Lucifer]

Absolutely 0% chance of things speeding up at this point now, huh?

Really didn't need to hear this today. This is BS.

I guess we are most likely going to get FX-322 first now. If OTO-413 worked with one dose then why are they doing Phase 1 again. Fuck this. FX-322 better work for us then.

 

[Aaron91]

Huge fail on their part. This has mismanagement written all over it to be honest.

Why mismanagement? (Not that I disagree, especially given that they only seem to have at this point two years' worth of cashflow remaining.)

I was thinking about this more last night and I was wondering whether they spotted some methodology issues that obscured their results. From a bird's eye point of view, this whole thing feels as if they don't have confidence in their drug.

 

[Christiaan]

This is a huge bummer of epic proportions. Only consolation is that Hough Ear Institute is moving forward with Phase 2 in testing their bomb blast pill, however slow it may seem.

 

[frpp]

Why mismanagement? (Not that I disagree, especially given that they only seem to have at this point two years' worth of cashflow remaining.)

I was thinking about this more last night and I was wondering whether they spotted some methodology issues that obscured their results. From a bird's eye point of view, this whole thing feels as if they don't have confidence in their drug.

Personally I hope it's just that they wanted to up the dosage and as per usual the Failed Drug Administration said no, like they did with OTO-313. If this is the case, I'd come out swinging and triple to quadruple the dose.

 

[Gb3]

You had four injections of FX-322?

No. I had intratympanic steroid injections to treat sudden hearing loss.

 

[Zugzug]

This is surprising. Weren't the Phase 1/2 results more impressive than FX-322's (relatively speaking)?

I wonder if it's a combination of:

• Otividex initially failing caused a big crash; maybe they want to learn from their previous failures.
• Correct me if I'm wrong, but less competition than Frequency Therapeutics so more time to be patient. Is there anyone else working on BDNF drugs for synapses? FX-322 has the Hough Ear Institute pill to worry about years down the line.
• Behind the scenes stuff like @patorjk's interesting observation about Steven Cohen and GME.