- Otonomy Inc., a San Diego biopharma focused on ear disease, is restructuring and refining its strategy. The focus will shift onto the company's R&D pipeline and away from already commercialized products.
- Otonomy aims to complete the clinical development of Otividex, a formulation of the steroid dexamethasone, as well as moving forward a number of programs in the prevention and treatment of sensorineural hearing loss, and the treatment of tinnitus.
- In order to focus resources on the pipeline, the company will cease commercial support for Otiprio, saving around $20 million in 2018 expenses. Otonomy hopes to divest Otiprio, and will reduce the company's headcount to around 50 employees.
"Today's announcements outline our plan to focus resources on advancing our pipeline and to eliminate the cash burn associated with Otiprio commercialization," said Otonomy CEO David Weber in a Nov. 27 statement. "With these changes, we believe that our existing cash balance provides sufficient runway to complete the clinical development required for U.S. registration of Otividex in Ménière’s disease and advance our other programs."
The company plans to reveal more details on its development timelines in early 2018.
Otividex has had an up and down year. In August, data from the Phase 3 AVERTS-1 trial showed no difference between the drug and placebo in the potentially disabling ear condition Ménière's disease, and the product came near to being shelved, with ongoing clinical trials stopped. But in November, an analysis of the Phase 3 AVERTS-2 study showed that, despite the study being ended early, Otividex had hit its primary objective, reducing the number of definitive vertigo days and the frequency of vertigo.
The first stage of Otonomy's business plan will be to complete clinical development of Otividex for Ménière's disease. This will include a meeting with the Food and Drug Administration during the first quarter of 2018 to see if the regulatory authority will accept the incomplete AVERTS-2 as one of the successful Phase 3 trials requested by the FDA. The next step will be to advance the development of gacyclidine (OTO-311) in Phase 2 development for tinnitus, and move forward the preclinical hearing loss programs.
Discontinuing commercial support of Otiprio will free up cash, but as the company states, "this action does not impact the current approval status of Otiprio with the FDA or the ongoing review of the supplemental New Drug Application for Otiprio in acute otitis externa.
Dropping Otiprio and the associated job losses will result in around $4 million of costs, including $3 million in personnel termination costs and $1 million in program contract termination costs. Most of these costs will be incurred in the fourth quarter of 2017 and the first quarter of 2018.