SAN DIEGO, Aug. 03, 2017 (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, 2017 and provided an update on its corporate activities and product pipeline.
Second Quarter 2017 and Subsequent Highlights
“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
Second Quarter Financial Highlights
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 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, 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 | |