Otonomy cuts lead asset loose after phase 2 failure, the latest in a string of pitfalls

Otonomy can’t seem to shake its clinical demons. A phase 2 trial for a tinnitus treatment has struck out, forcing the company to call it quits on the drug and shift focus once more.

The results for OTO-313 announced Monday were “unexpected” to CEO David Weber, Ph.D. The therapy failed to improve symptoms of ear ringing, known as tinnitus, which was the main goal of the trial. OTO-313 was also unsuccessful on key secondary endpoints, including the loudness of the ringing. The company blamed a higher placebo response than was recorded in the previous trial.

The phase 2 study enrolled 153 patients with persistent, unilateral tinnitus of at least moderate severity, who received an injection of OTO-313 or placebo and followed for four months. 

In an effort to try and turn the flop into a win, Otonomy looked at one-month safety data with higher, bilateral dosing, but even there did not find a “convincing” treatment benefit. The sum total of these findings are a change of plans, with Otonomy axing development and switching gears to OTO-413 to treat hearing loss. 

Weber also said Otonomy would be implementing “other measures” to extend its cash runway. A spokesperson for the company did not respond to a request for comment as of publication on the nature of these potential measures.

Wall Street hammered Otonomy for the disappointing news, with shares down more than 75% shortly after the markets opened, from $1.43 to just 35 cents. 

The decision to move on comes more than a year after the company faced the music for Otividex as a treatment for Ménière's disease, an inner ear condition that can cause vertigo, ringing and hearing loss. In 2015, the therapy missed its primary endpoint in a phase 2b trial, but ultimately Otonomy was encouraged enough to launch into two phase 3 trials. The first of those two trials failed in 2018, prompting the company to halt the second. But after speaking with the FDA, Otonomy hustled to launch one more trial to nab elusive positive data. It never materialized, prompting the company to shift focus. 

Now, Otonomy is once again turning its attention to other parts of the pipeline, namely OTO-413. The company reported positive phase 2b data in April and expects top-line results of the higher dosing group in the fourth quarter of 2022. 

Otonomy is up against a race for substantive data versus its own cash reserves. At the end of the second quarter, the company had $53.1 million in cash and short-term investments compared to $77.4 million a year earlier. Otonomy contends this will pay for “multiple clinical readouts” although it didn’t provide a time-stamped cash runway.