Auris’ tinnitus drug fails in phase 3 again 

Auris Medical’s tinnitus candidate Keyzilen has missed the primary endpoint in a phase 3 trial for the second time. The result wiped 37% off Auris’ already-depressed stock as its slim chance of salvaging the program faded.

After NMDA receptor antagonist Keyzilen failed the first phase 3 in 2016, Auris made mid-trial tweaks to its second study. The Zug, Switzerland-based biotech made change in tinnitus functional index a primary endpoint, increased enrollment and added a subgroup analysis in an attempt to increase the chances of the trial succeeding. The plan, and the trial, failed.

Auris disclosed the setback in a brief but damning statement. Keyzilen failed to improve scores on the tinnitus scale in the overall study population or the subgroup of patients with otitis media, conditions characterized by the inflammation of the middle ear.

The failure in both groups looks to leave little scope for Auris to find a path forward for Keyzilen. But the biotech is yet to formally give up on the program. Auris is now sifting through data from the two phase 3 trials before deciding what to do with its twice-failed drug. The phase 3 failures followed a mid-stage program that relied on a subgroup analysis for its strongest evidence of efficacy,

That subgroup analysis proved compelling enough to enable Auris to pull off an IPO and tap public investors for the cash to take Keyzilen through the phase 3 program. But the attempt to strike gold in the otitis media subgroup in phase 3 failed.

The outcome sends Auris deeper into the mire. Since going public, Auris has racked up two phase 3 failures for Keyzilen and another for hearing loss candidate AM-111. Sticking with its M.O., Auris tried to look past AM-111’s primary endpoint miss and instead focus on post hoc analyses that linked the drug to statistically significant improvements in a subgroup of patients with profound hearing loss.

Auris is discussing the path forward for AM-111 with regulatory authorities, but investors are holding out little hope of success. The string of phase 3 failures has put Auris deep in penny-stock territory, leading to compliance notices from Nasdaq. In response, Auris is now executing a stock split.