Otonomy said dropping the program and terminating the employees will provide a cash savings of more than $20M in 2018.
Otonomy remains committed to bringing its treatment for late stage Ménière’s disease to market. To do so, the company is initiating more job cuts as well as planning to divest one of its assets.
This morning, the company announced a strategy to refocus its pipeline developmental programs to achieve the goal of commercializing Otividex for Ménière’s disease patients. Part of that new strategy includes discontinuing commercial support for Otiprio (ciprofloxacin otic suspension). Those cuts are expected to reduce the company’s headcount to about 50 employees. In its announcement, Otonomy said it was looking to divest Otiprio.
Otonomy said dropping the program and terminating the employees will provide a cash savings of more than $20 million in 2018. During a quarterly report earlier this month, Otonomy noted that end user demand for Otiprio declined by 9 percent from the previous quarter. The U.S. Food and Drug Administration is reviewing a supplemental New Drug Application for Otiprio in acute otitis externa. The FDA is expected to make a decision on that treatment by March 2, 2018.
Otonomy said it plans to focus its resources on the continued development of Otividex. In August, the company reported the U.S. arm of its Phase III study of Otividex flopped and failed to meet endpoints, the count of definitive vertigo days. Ménière’s disease is an inner ear disorder characterized by attacks of vertigo. That resulted in the company slashing about one-third of its employees. The drug did not differentiate itself from placebo in that study. However, the company received a shot in the arm after its European Phase III study for Otividex did meet endpoints. The company said in the European study of Otividex “demonstrated clinically significant treatment benefit for patients with Ménière’s disease.”
Although the European study was stopped early, Otonomy said the analyzed data met expectations. Otonomy said that data meets U.S. Food and Drug Administration requirements “to serve as one of two successful Phase III trials” requested by the regulatory agency at the End-of-Phase II meeting. Otonomy said it plans to meet with the FDA during the first quarter of 2018 to review the results and discuss remaining clinical requirements for registration of Otividex as a treatment for Ménière’s disease.
“The positive AVERTS-2 results support our continued development of OTIVIDEX in Ménière’s disease, and the clinically significant treatment benefit experienced by patients in this trial highlights the important unmet medical needs that our development pipeline can address in the untapped field of otology,” Otonomy Chief Executive Officer David Weber said in a statement.
In addition to supporting Otividex, Otonomy said it will continue to advance multiple programs for the prevention and treatment of sensorineural hearing loss and the treatment of tinnitus. The company’s hearing loss programs, which are currently in preclinical development, involve the anatomical and functional repair of ribbon synapses, protection of hair cells from chemotoxicity, and regeneration of hair cells, Otonomy said.
“Today’s announcements outline our plan to focus resources on advancing our pipeline and to eliminate the cash burn associated with Otiprio commercialization. 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. We look forward to outlining our program timelines in the first quarter of 2018,” Weber added in his statement.
