More than two months ago, Otonomy shifted focus to its phase 2 hearing loss med, hoping that an upcoming readout would be music to the ears of the company’s top brass.
But alas, the harmonic clinical chords the company had longed for haven’t been played. OTO-413, a sustained exposure formulation of a protein called brain-derived neurotrophic factor (BDNF) did not meaningfully improve hearing loss from baseline in the higher-dosing groups, according to a release Thursday. Otonomy said the results were “in contrast” to positive indications observed at a lower dose level.
Chief Scientific Officer Alan Foster, Ph.D., said in the release that the results were “disappointing” and “unexpected” based on prior data in animals. Pointing to ex vivo data, Foster suggested that the med had a “complex dose-response relationship” in which declining activity is observed at higher dosing groups. Nonetheless, the company will have to go back to the drawing board as it tries to find an asset that can rise to the occasion.
In early August, the hope and expectation were that OTO-413 would do just that after Otonomy switched gears to focus on the med when the company’s other late-stage asset, OTO-313 flunked a phase 2 test. In the wake of the failure, the biotech trimmed back its staff by 55%.
The troubles over the summer saw Otonomy’s stock crash down from $2 a share to around 40 cents. Today’s trial results saw the share price fall still further, dropping over 50% to around 11 cents in trading Thursday morning.
The double-blind, placebo-controlled trial for OPO-413 recruited 19 patients each for the 0.75 mg and 1.5 mg dose cohorts, respectively. All patients had self-reported as having difficulty hearing in loud environments, which was confirmed with a hearing test. The treatment was assessed from baseline versus placebo at days 57 and 85.
In light of the data and the “challenging financing environment,” the company plans to “explore strategic options” for both OTO-413 and gene therapy OTO-825 that’s yet to enter the clinic, said CEO David Weber, Ph.D. The reality for Otonomy is that its cash pile is dwindling fast, with the company having spent some $24 million through the first half of 2022 after entering the year with $77.4 million. The company’s guidance for total operating expenses in 2022 including stock-based compensation is $52-54 million.