SAN DIEGO, Aug. 04, 2016 (GLOBE NEWSWIRE) -- 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, 2016 and provided an update on its corporate activities and product pipeline.
Second Quarter 2016 and Subsequent Highlights
“Throughout 2016, we will remain focused on laying the foundation for OTIPRIO by establishing broad awareness within the target physician audience and successfully building advocacy through the sample trial program. The first quarter of launch has provided us with valuable experience in gaining formulary acceptance which we believe will be supported by the assignment of a unique C code for OTIPRIO that was effective as of July 1,” said David A. Weber, Ph.D., president and CEO of Otonomy. “In addition to our commercial execution, we continue to advance our product development programs as evidenced by the timely initiation of the Phase 3 trial for OTIPRIO in acute otitis externa, completion of patient enrollment in both the Phase 3b TTP and Phase 2 AOMT trials for OTIPRIO, and ongoing progress of the OTO-104 AVERTS-1 and AVERTS-2 Phase 3 clinical trials in Ménière’s disease.”
Anticipated Upcoming Milestones
Board of Directors and Management Team Updates
“I am delighted to welcome Iain to the board and believe that Otonomy will benefit greatly from his broad international pharmaceutical experience as we define our strategy for the development and commercialization of our product pipeline in markets outside the United States,” added Dr. Weber. “I would also like to take this opportunity to express my sincere gratitude and appreciation for the service and contributions made by both Carl and Chau. As one of Otonomy’s early employees, Carl played a key role in establishing the company’s development group and capabilities, and his commitment to support a smooth transition and serve in a part-time consulting role over an extended period clearly demonstrates his dedication to the success of Otonomy. Likewise, Chau’s active participation and thoughtful contributions and guidance to the company and its board through our initial public offering and transition to a commercial-stage company have been greatly appreciated.”
Second Quarter Financial Highlights
Non-GAAP Financial Measures
In this press release, Otonomy’s financial results are provided in accordance with generally accepted accounting principles (GAAP) in the United States and also on a non-GAAP basis. Non-GAAP financial results exclude stock-based compensation and depreciation 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. Otonomy is unable to provide GAAP operating expense guidance since stock-based compensation expense is a significant component of GAAP operating expenses and stock-based compensation expense is difficult to predict and estimate due to its dependence on Otonomy’s future stock price. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.
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 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. Two Phase 3 trials in Ménière's disease patients are underway, with results expected during the second half of 2017. 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, the statements regarding a C code and potential actions by Medicaid and private insurers, opportunities for reimbursement for OTIPRIO, the timing of completion and results of the OTIPRIO Phase 3 clinical trial for acute otitis externa, the timing of the submission of the sNDA to the FDA for OTIPRIO for acute otitis externa, the timing of results of the Phase 3b clinical trial of OTIPRIO in an expanded population of pediatric patients undergoing TTP surgery, enrollment in, and the timing of results of, the two OTO-104 Phase 3 clinical trials for Ménière’s disease, the timing of initiation of the OTO-104 Phase 2 clinical trial for cisplatin-induced hearing loss, the Phase 1 clinical safety trial of OTO-311 for treatment of tinnitus, the timing of results of the OTIPRIO Phase 2 clinical trial for AOMT, the sample distribution program and its potential results, the statements of Otonomy’s president and CEO, all upcoming milestones and all financial guidance. 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, 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 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; 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the "SEC") on August 4, 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 June 30, | As of December 31, | |||||||
2016 | 2015 | |||||||
(unaudited) | ||||||||
Cash and cash equivalents | $ | 46,569 | $ | 158,664 | ||||
Short-term investments | 192,451 | 26,172 | ||||||
Total assets | 250,452 | 193,030 | ||||||
Total liabilities | 11,007 | 11,496 | ||||||
Accumulated deficit | (220,576 | ) | (164,137 | ) | ||||
Total stockholders' equity | 239,445 | 181,534 | ||||||
Otonomy, Inc. | ||||||||||||||||
Condensed Statements of Operations | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(unaudited) | ||||||||||||||||
Product sales, net | $ | 76 | $ | - | $ | 89 | $ | - | ||||||||
Operating expenses: | ||||||||||||||||
Cost of product sales | 395 | - | 404 | - | ||||||||||||
Research and development | 16,742 | 7,289 | 30,614 | 15,896 | ||||||||||||
Selling, general and administrative | 12,846 | 5,352 | 25,841 | 8,853 | ||||||||||||
Total operating expenses | 29,983 | 12,641 | 56,859 | 24,749 | ||||||||||||
Loss from operations | (29,907 | ) | (12,641 | ) | (56,770 | ) | (24,749 | ) | ||||||||
Other income (expense) | 231 | 97 | 331 | 188 | ||||||||||||
Net loss | $ | (29,676 | ) | $ | (12,544 | ) | $ | (56,439 | ) | $ | (24,561 | ) | ||||
Net loss per share, basic and diluted | $ | (0.98 | ) | $ | (0.52 | ) | $ | (1.90 | ) | $ | (1.04 | ) | ||||
Weighted-average shares used to compute net loss per share, | ||||||||||||||||
basic and diluted | 30,128,150 | 24,139,791 | 29,728,477 | 23,670,508 | ||||||||||||
Otonomy, Inc. | ||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Information | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(unaudited) | ||||||||||||||||
Reconciliation of GAAP to non-GAAP operating expenses | ||||||||||||||||
GAAP operating expenses | $ | 29,983 | $ | 12,641 | $ | 56,859 | $ | 24,749 | ||||||||
Non-GAAP adjustments | ||||||||||||||||
Cost of product sales stock-based compensation expense | (4 | ) | - | (4 | ) | - | ||||||||||
R&D stock-based compensation expense | (778 | ) | (723 | ) | (1,425 | ) | (1,275 | ) | ||||||||
SG&A stock-based compensation expense | (2,444 | ) | (1,035 | ) | (4,533 | ) | (1,826 | ) | ||||||||
Depreciation expense | (168 | ) | (64 | ) | (320 | ) | (124 | ) | ||||||||
Total non-GAAP adjustments | (3,394 | ) | (1,822 | ) | (6,282 | ) | (3,225 | ) | ||||||||
Non-GAAP operating expenses | $ | 26,589 | $ | 10,819 | $ | 50,577 | $ | 21,524 | ||||||||
Reconciliation of GAAP to non-GAAP net loss | ||||||||||||||||
GAAP net loss | $ | (29,676 | ) | $ | (12,544 | ) | $ | (56,439 | ) | $ | (24,561 | ) | ||||
Non-GAAP adjustments | 3,394 | 1,822 | 6,282 | 3,225 | ||||||||||||
Non-GAAP net loss | $ | (26,282 | ) | $ | (10,722 | ) | $ | (50,157 | ) | $ | (21,336 | ) | ||||
Reconciliation of GAAP to non-GAAP net loss per share | ||||||||||||||||
GAAP net loss per share, basic and diluted | $ | (0.98 | ) | $ | (0.52 | ) | $ | (1.90 | ) | $ | (1.04 | ) | ||||
Non-GAAP adjustments | 0.11 | 0.08 | 0.21 | 0.14 | ||||||||||||
Non-GAAP net loss per share, basic and diluted | $ | (0.87 | ) | $ | (0.44 | ) | $ | (1.69 | ) | $ | (0.90 | ) | ||||
Weighted-average shares used to compute net loss per share, | ||||||||||||||||
basic and diluted | 30,128,150 | 24,139,791 | 29,728,477 | 23,670,508 | ||||||||||||