On January 11th 2018, Otonomy Inc (ticker symbol: OTIC) presented at the annual J.P. Morgan Healthcare Conference in San Francisco. The roughly 45-minute presentation and Q&A-session was preceeded by a press release by Otonomy two days prior, and combined, the two updates outlined the entire OTIC-pipeline, clinical trial developments, as well as anticipated future milestones. The presentation by CEO, Mr. David Weber (Ph.D.), included a number of important updates for those interested in the inner ear pharma space. And who wouldn’t be interested given the market potential as indicated by the unmet needs of a patient population that according to new research – on a global level – counts 500 million people with disabling hearing loss while also not forgetting that tinnitus and hearing loss represents the largest burden in terms of disability payments to US veterans.
Highlights of the January 11th presentation included:
- A thorough update on the AVERTS-1 trial for Ménière’s disease (vertigo-symptoms) – the first of two phase-III studies where, the first one conducted in the United States, had failed to meet its primary endpoint causing the share price to plummet in late August 2017. A subsequent 2nd phase-III study in Europe (AVERTS-2) demonstrated efficacy of treatment. The update by Otonomy included the reasons for the discrepancy between the two studies and pointed to “investigator-introduced bias” as the main cause for the increased placebo response that had led the patient reported outcome trial (in the United States) to miss its primary endpoint. With the AVERTS-2 study in Europe having succeeded, Otonomy is now pursuing plans to bring OTIVIDEX to market even though earlier reports by media outlets (in 2017) suggested otherwise. The path forward will involve meetings with the FDA and likely another phase-III trial. It goes without saying that if the topline data for the two trials had been chronologically reversed (i.e. AVERTS-2 before AVERTS-1), the massive drop of up to 80% in share price towards the end of August (2017) would probably not have occurred – a huge shame given that OTIVIDEX appears to be efficacious after all.
- Increased transparency on the hearing loss programme which now is progressing towards three distinct assets: one for hidden hearing loss called OTO-413, a second for oto-protection (for those undergoing chemotherapy) called OTO-5xx, and a last preclinical-stage development for inner ear hair cell regeneration (targeting severe hearing loss) called OTO-6xx. So-called “hidden hearing loss” was mentioned as being the fastest growing type of hearing loss there is – with “recreational noise exposure” being the main culprit. Hidden hearing loss is when a person can pass a standard hearing test, but then experiences difficulties following conversations with background noise present (referred to as “cocktail party situation”). Of the three types of interventions being pursued, a trial for hidden hearing loss is expected to be the first to begin (commencing in 2019).
- Announcement of a new formulation for the gacyclidine compound called OTO-313 which will target those suffering from tinnitus. A patient-based trial is expected to commence in 2019.
- Plans to divest OTIPRIO.
With the update by Otonomy on January 11th, we saw the most revised presentation deck in a long while as well as clear plans on what clinical trial developments can be expected in the next two-year timeframe. Combined with a strong balance sheet and a broad pipeline covering multiple indications, Otonomy shows robust potential to lead the way in the inner ear otology space. A full transcript is available at the Cochlear Info Repository (available to journalists, researchers, clinicians, investors, and online community managers).