Q4 2021 Otonomy Inc Earnings Call

February 28, 2022

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2021 autonomy, Inc earnings Conference call.

At this time all participants are in listen only mode. After the speaker presentation, there will be a question and answer session.

Ask a question. During this time, you will need to press star one on your telephone keypad.

You require any further assistance please press star zero.

I would now like to hand, the conference over to your Speaker today, Mr. Robert Cool. Thank you. Please go ahead.

Good afternoon, and welcome to autonomy <unk> fourth quarter and full year 2021 financial results and business update conference call. Joining me on the call from autonomy are Dr. David Weber, President and Chief Executive Officer, and Paul Cayer, Chief financial and business Officer.

Before I turn the call over to Dr. Weber I would like to remind you that today's call will include forward looking statements based on current expectations such statements represent managements judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results.

Please refer to autonomy filings with the SEC, which are available from the SEC or on the autonomy website for information concerning the risk factors that could affect the company autonomy, specifically disclaims any obligation to update any forward looking statements, except as required by law I will now turn the call over to <unk>.

Dave Weber, President and CEO of autonomy.

Thank you Robert Good afternoon, everyone and thank you for joining us on this call to discuss autonomy recent business updates as well as our financial results for the fourth quarter.

Full year.

We have continued to execute well against our development goals, which is set up 2020 to be a year of multiple clinical readouts for two of the largest market opportunities in neuro otology, each with significant unmet medical need.

Key takeaways from this update are as follows.

As we announced last week, we have completed patient enrollment in the OTO 313 phase III trial in Tinnitus ahead of schedule with topline results for all time points expected in mid 2022.

We also fully enrolled the OTO 413 phase Iia cohort and hearing loss earlier than planned and moved up the timing for top line results to early in the second quarter of 2022.

Additionally, we have initiated clinical evaluation of higher dosing for OTO 413, and are initiating safety evaluation of higher and bilateral dosing for OTO 313.

The data from this expanded set of clinical studies will support and inform our next steps for both programs. We believe these include initiating a full dose ranging phase III efficacy trial for OTO 413 by the end of this year and initiating the phase III program for OTO 313 in the first half.

Of 2023.

Regarding our <unk> <unk> five gene therapy program, we continue to make good progress with ongoing IND, enabling activities and still expect to file an IND in the first half of 2023.

We're also continuing to progress our two other preclinical programs OTO 510 for OTO protection, and <unk> X X for severe hearing loss.

Finally, our balance sheet remains strong and we continue to expect that our current cash will fund the company through these multiple clinical readouts and into the second half of 2023.

During this call I'll provide a brief update on our programs, including plans for an investor R&D event in March and then ask Paul to summarize the financial results. We can then open up the line for any questions.

Beginning with OTO 313, we have completed enrollment in the phase II trial ahead of schedule re randomized to 153 patients with persistent unilateral tinnitus or at least moderate severity, which is above our target enrollment of 140 patients.

Patients were randomized one to one to a single inter tympanic injection of 0.32 milligram other 313 or placebo and are being followed for four months.

The primary endpoint is the same as reported for the successful phase two trial, a responder analysis based on the proportion of patients who report a clinically meaningful improvement in the tinnitus functional index or <unk> from baseline to month wanted to following treatment.

To assess durability of the OTO 313 treatment effect, we extended the follow up period out to four months compliance.

Compliance for completion of the Tsi and daily symptom diary remains high and we look forward to announcing topline results for all time points in mid 2022.

Additionally, we are close to initiating safety evaluations for bilateral as well as higher dosing of OTO 313.

This effort is important for the program since bilateral patients comprised approximately 50% of the tentative population.

Furthermore, the higher dose we are evaluating a 0.64 milligram twice the dose used in our successful phase two trial and ongoing phase II.

We expect results from this one month safety evaluation in the second half of 2022.

This data together with the phase II results are expected to support in the phase II meeting with the FDA and inform the design of the phase III clinical program planned to start in the first half of 2023.

Our next clinical stage program is OTO 413 for hearing loss.

Following a successful ascending dose phase one two trial, we initiated a phase iia cohort that enrolled a total of 33 patients with speech in noise hearing loss.

The most common reason that patients seek treatment for hearing loss.

This is a randomized double blind placebo controlled study that randomized patients two to one for a single inter tympanic injection of <unk>, three milligram, OTO 413 or placebo.

Patients are being followed for three months and evaluated using the same three clinically validated speech in noise hearing test used in the prior cohorts.

The digits and noise words, and noise and American English matrix Crave test.

Enrollment of the phase Iia with completed ahead of schedule and we expect top line results early in the second quarter of 2022.

In addition to the phase Iia, we have also initiated clinical evaluation of higher dosing.

For <unk>, we expect to enroll approximately 12 hearing loss patients randomized two to one to OTO 413, or placebo and at least one higher dose safety cohort beginning with 0.75 milligrams.

This is more than twice the dose used in our successful phase two trial, which is an important expansion of the clinical data set to support next steps for this program.

Based on results from the phase Iia in higher dose evaluation, we expect to initiate a full dose ranging phase III efficacy trial in hearing loss patients by the end of 2022.

Our third development program is <unk> <unk> five gene therapy targeting <unk>, two which is the most common cause of congenital hearing loss.

Patients born with this mutation can have severe to profound deafness in both years.

That is identified in screening tests now performed routinely in newborns.

Preclinical proof of concept results for auto 825 demonstrate that a single administration of OTO 825 rescues hearing loss and cochlear damage in two preclinical models, representing a range of hearing loss severity.

<unk> by <unk> deficiency.

We have completed a pre IND meeting with the FDA that provided guidance regarding non clinical study design.

Manufacturing requirements and clinical trial considerations and have incorporated this feedback into our IND enabling program.

These activities are ongoing and we expect to file an IND in the first half of 2023.

Our remaining two programs, our OTO 510, and OTO protectant for patients at risk for cisplatin induced hearing loss and <unk>, six X X, which targets hair cell repair of regeneration for patients with severe hearing loss.

Preclinical development continues on both programs.

In summary, we are making good progress in advancing our multiple programs for treating hearing hearing loss and tentative, which represent large untapped markets with significant unmet medical need.

In fact, we believe that the early completion of enrollment for both the OTO 313 phase II and OTO 413 phase Iia trials demonstrate the interest in new therapeutic options for these conditions.

To help prepare investors for our upcoming clinical Readouts, we will be hosting an investor R&D event on March 22nd. This event will include presentations by multiple key opinion leaders, who will provide background information on tinnitus and hearing loss and review that.

102 trial results for OTO, 313, and OTO 413.

Additionally, members of our senior management team will provide an update on the ongoing trials and outline next steps for these programs we.

We hope that you are able to join US for this informative formative session, which is open for registration via the events page on our website.

With that I'll turn the call over to Paul Kerr, our Chief financial and business Officer, who will provide a summary of our financial results implant.

Thank you, Dave and good afternoon, everyone.

Overall, our expenses for 2021 was slightly above our financial guidance for the year due primarily to the faster than expected enrollment in the other three <unk> phase II trial.

There's obviously a favorable situation.

Our balance sheet remains strong and our cash gets us significantly beyond the multiple clinical readouts that David mentioned.

Now let me briefly recap the financial results that are more fully described in today's earnings release and 10-K filings.

In the fourth quarter of 2021, we reported total non-GAAP operating expenses of $11 3 million with GAAP operating expenses totaling $13 2 million.

The primary adjustment for non-GAAP expenses is exclusion of stock based compensation.

So this is the financial metric that best approximates our spending level.

For the full year 2021, total non-GAAP operating expenses were $42 million.

With GAAP operating expenses totaling $49 4 million.

As mentioned these expense levels slightly exceeded our financial guidance.

Timing differences of the OTO 308 clinical trial expenses.

Going forward, we expect non-GAAP expenses for 2022 totaled $42 million to $44 million.

GAAP expenses to be in the range of $52 million to $54 million.

From a cash perspective, we finished the year with a cash balance, including cash cash equivalents and short term investments of $77 4 million.

And we continue to expect that this cash balance will fund the company into the second half of 2023.

With that I will turn the call back over to Dave.

Thank you Paul operator, we are now ready for questions.

Understood at this time I would like to remind everyone in order to ask a question you May Press Star then the number one on your telephone keypad.

Again, Thats star one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.

Your first question comes from the line of Stacy <unk> from Cowen <unk> Company. Your line is open.

Thanks for taking our questions and congratulations on the progress. So we have a few.

Question is SBA.

At 413 results you remind us how to think about the profile of patients enrolled with speech in noise hearing loss.

What are the different parameters in place to maintain consistency of hearing loss. In addition can you help us understand the potential path forward.

Thanks.

The next I'm wondering if you could help us narrow some expectations.

For the tinnitus results in mid 2022, David I believe you stated we should expect.

Time points for.

<unk> results so given your update completed enrollment last week.

And secondary endpoints at week 16, our math suggests that we should expect results roughly let's say July to give some wiggle room for data analysis. So any thoughts there would be appreciated and then.

Third and designing additional trials for bilateral treatment of tinnitus can you speak to some of the different considerations and recommendations from your expense. Thank you.

Thank you Stacey.

In terms of the $4 13 results and the profile of the patients with regard to hearing loss, we do exclude patients with profound hearing loss based on scanner audiometry.

But we are requiring that patients all show a speech in noise hearing.

Hearing loss.

Thats determined by one of the three speech in noise tests that we administer.

And but we do allow it to be open in terms of the audio logical performance up to as I mentioned, the profound hearing loss that what that means and what we've seen in the prior work that we've presented is that the majority of these patients have moderate to severe hearing loss on normal.

Audio grams as well as within the speech in noise hearing loss.

And so that is the patient population that we are investigating in terms of ensuring the consistency of these patients that's really done by requiring that the patients complete a lead in period in which they are also showing consistency of their hearing loss, including the speech in noise hearing loss.

And so this is something that of course is modeled into all of our clinical trials, including the tinnitus, we believe that doing lead ins that will make the patient.

Allow us to evaluate the disease of the patient at both.

Initial screening as well as then a visit prior to randomization really ensures that we have consistency both in terms of the disease level and with that patient and the reporting of the patient. So that is something that we are doing here as well and we believe gives us good consistency for the.

<unk>.

Turning to the expectations for the 313 phase III trial.

Youre correct in that because now that we've enrolled ahead of time, we're going to include the results for all time points, including week 16 that will be both the primary and secondary endpoints.

And as far as getting more specifics.

<unk> I'll, just say middle of 2022, clearly we are conducting this trial to potentially be.

It is a phase II trial, but if successful.

<unk>.

With discussions with the FDA, we would look potentially to include that.

As part of our registration package and so for that reason, we are taking great care.

In doing the final visits of patients as well as then going through database.

The normal cleanup in the database lock that you would go through so we're obviously going to take great care in that process.

But mid 2022, we can definitely say that we will have all the results for that program.

Additionally, then for the bilateral the a question on bilateral tinnitus and our plans there importantly, with bilateral tinnitus. It does represent about half the patient population I think it's been obviously great to see the enrollment of the unilateral patients. It's very clear that they represent approximately 50% of the population given how fast.

We were able to enroll.

And but with the bilateral patients.

Our approach for them, obviously pending our discussions with the FDA in the end of Phase II meeting that we plan to have before the end of the year.

On successful phase III data, our plan would be to actually evaluate the bilateral patients and safety studies in <unk>.

In efficacy studies.

We believe that doing efficacy and bilateral condition may be difficult because there may be different responses between the two years and patients may struggle really identifying and separating the.

Their perceptions based on the years and for that reason.

The reason that we're doing the bilateral in our phase one safety is to build up the initial data that we would then need to support including bilateral patients in the safety program for OTO 313 that would run in parallel to the efficacy studies.

And so that is something of course that were talked with the FDA at the end of phase II meeting.

But we think represents a good approach to address those patients as well.

Thanks, so much for the details appreciate it sure.

Sure. Thank you Stacey.

Your next question comes from the line of Chris Raymond from Piper Sandler Your line is open.

Yes.

Good afternoon. This is Nick <unk> on for Chris Thanks for taking the question.

So maybe one just around that.

Can you just study.

Beyond the primary analysis can you, maybe just remind us or help us understand what the longer term follow up will tell us about potential re dosing frequency.

It will inform on phase III design.

And then maybe a second.

Bit more naive question I guess looking back at some of the.

<unk> data for <unk>, we were interested in that placebo effect on tsi.

From your analysis is that truly a placebo effect or is there some kind of potential short term that tidjane and jacobina conjecture in general.

Thanks Nicole.

With regard to the phase III tentative beyond the primary outcome.

What we're looking at.

Beyond week.

Eight and looking at month, three and four is really to understand how patients continue to.

Respond in their tinnitus as you may recall in the phase <unk> trial, we saw patients at week eight continuing to improve.

And so the question that we have is do these same patients and continue to improve over month, three and four the other thing that we want to observe is of course with those patients.

If that is the case, where would the optimum re dosing period would be.

For those patients as well as perhaps the patients who don't respond initially.

And so by looking at month, three and four we believe that will inform us of what we would want to do in the safety studies to support the safety of re dosing whether that would be month to month, three or month for any of which we think are very viable from a clinician and patient standpoint.

With regards to than our approach it would be taking that information into the FDA.

And in the phase II meeting and discussing with them.

The approach that we would take.

For the safety program with with regards to the re dosing frequency.

That would then support approval of the product. So we do not expect it.

At this point in time that we would be running re dosing on efficacy it would only be safety and thats very consistent with prior discussions that we've had with the agency on other programs as well as one.

Previous tentative program that have been conducted in the field.

With regards to the <unk>.

<unk> in any short term benefit.

We've never seen in our programs that there was a benefit to enter to panic injection of placebo.

Of course that would be very difficult to separate from a placebo response, if you will.

But there is no basis from any of our animal work or from human work that would suggest to us that the inter tympanic injection itself has any short term benefit I think.

With the with regards to the placebo response that we saw in the earlier study it was very small.

Really essentially one patient who had the placebo response.

And I think that really is attributed to what we're doing in terms of having the responder analysis, where we really require the patients to be clinically meaningfully improved at two consecutive time points month, one and at months too and I think that really then takes away that variability that you get.

That may just be due to a placebo effect.

So thats our approach.

We obviously will be interested at looking at with the phase III trial results.

Great. Thanks, so much.

Thank you Nicole.

Your next question comes from the line of French Swab BRCA Boy from Oppenheimer. Your line is open.

Alright, Thanks for taking my questions and congrats on the progress on the early enrollment completion.

Just a couple here so in terms of for one three and just the field being so novel in terms of endpoints can you just help us maybe set expectations.

We can take her to a successful trial and then just when you're going up to a dose that's twice as big as the one.

As in previous trials can you just talk about maybe the rationale for why higher dose.

Okay on the safety side and maybe help.

A efficacy.

Okay. Thanks, Thank Francois great to talk with you.

With regards to for one three and the endpoint. So I mean, it is true to say that the FDA has never really.

Evaluated a program with speech in noise.

Endpoints.

And this is why frankly, we are conducting our program with three endpoints at this time in addition to evaluating the safety and obviously the activity of $4 13, what we are trying to establish as well is which of the three speech in noise tests would be the best test to carry forward.

In registration in future trials as well as potential registration trials.

We believe that gathering that data is the best way to be informed as well as having productive conversations with the FDA.

Importantly, I think people need to recognize that these tests have never been used to support the approval of a drug.

And so as <unk> been develop they've been developed by Audiologist to really help them understand and assess patients.

And the current modalities that they can treat those patients such as hearing AIDS.

That is why we think it's very important that we're doing the work we're doing.

And it obviously will allow us to understand not only such things statistically of test retest types of parameters for future statistical considerations, but also allows us to compare the three different tests because they are quite different tests that may have certain advantages and disadvantages in.

Registered <unk> type trials, so that's what we're trying to figure out.

In regards to what would a successful trial look like at this stage with the phase Iia, what we're really looking to do is to confirm the observations that we've had demonstrating activity of $4 13.

And.

That would then support going into larger trials.

It also would of course give us the data that we want to see if we can select the speeds are specific speech in noise tests or at this point could narrow it down to two because every test we do obviously requires additional time.

So those are the kinds of things that we would consider to be successful is that it confirms what our observations are $4 13 activity in terms of improving the speech in noise hearing function of patients and allow us to design a full phase III trial.

That's connected to your second question of course with regards to the higher dose and this is really true of both of our programs.

With $4 13.

With the good safety profile there there was very clear opportunity to go up in dose.

Clearly the current dose showed us strong efficacy that we're looking to confirm in the phase Iia.

As the developer you always want to.

See what you could do with higher dose, particularly if you have a good <unk>.

Safety profile, which we do.

<unk>, if I remind people as endogenous.

So we express Bdnf enduring development Embryonically.

So it is something our body is used to and it has a very good safety profile from what we've seen so.

Obviously for that.

Going up in dose makes sense with regards to $3 13, it was a little bit more involved because <unk> is a very potent molecule.

And but our results from the phase one two which showed very good safety.

In fact, the safety of patients on the drug actually showed a better safety profile with fewer adverse events that were you.

Related than the placebo.

And so as a result of that we decided to go back in and do additional GOP Tox work that would allow US to then go up to this higher level that we're now approaching.

And that was really a matter of that in initial talks work you tend to do very broad bands. If you will of your safety analysis, we were able to go in and based on the clinical data and be more narrow and get data that we took to the FDA type C. Meeting that then supported going to this these this higher dose.

We are evaluating I think importantly, there. It's the same thing one of the things that not only are we would we expect that a higher dose may provide even more efficacy.

That we expect to confirm with the current phase III.

At that dose so maybe even more efficacy I think the other thing to keep in mind is our delivery technology and of course. This is unique to autonomy, we have sustained delivery technology as part of our strong intellectual property position.

And it allows us to do a single administration, yet provide very prolonged exposure to drug something we do talk about that other people do not have.

And one of the important parts of that is that higher dose.

Actually also translates into longer duration of exposure.

So we're not just looking at a higher dose in terms of temporary plasma.

I should say target tissue levels being higher but also an extension of the <unk>.

Exposure, so clearly what we would be interested there in would be would patients who perhaps maybe not responds to $3 13 in our initial phase one two trial, whether there might be now those patients might respond because of that not only higher level, but sustained level for even a longer period.

So clearly that's why we are interested in going to higher drug levels, and we think theres, a very clear and easy path in which to incorporate.

Additional drug dosing in the future work, whether that would be by doing two doses in it.

<unk> III trial for example, with $3 13 versus only a single dose we think that's very doable and I think.

Most people would agree given that we've been able to enroll the present trial ahead of schedule.

Thanks, David that's extremely helpful and just if I could sneak it in this last one here as you're getting more knowledgeable and tinnitus.

Is it proven the fact that maybe if <unk> had two loans that it turns into central.

<unk>.

It's almost too late to solve or is this more of just a thought.

That might.

Might have.

Yes, it's not proven.

So there is no definitive I would say definitive scientific evidence that there is the switch from peripheral to central it is our belief in the field many kols.

Do believe that there may be a point at which there is a central involvement but of course without with the absence of an actual therapeutic it's difficult to really.

<unk> that.

It is one of the reasons why we added additional patients into our study of looking up to one year.

Most of the Kols, who think there may be that type of central involvement or conversion I.

I believe it's beyond the one year period, maybe even two or three no. One has a set time period.

But I think it is a question that remains in the field and so are our approach on this on the development side is to focus on the near term patients, which are clearly out there given our enrollment.

Timing.

Because it really helps us to identify tinnitus additives due to cochlea origin events as opposed to for example, maybe an event that was not.

Associated with the cochlea or damage to the cochlea.

People can recall something more recently, however, we would be interested and then looking at longer term patients and so we do expect that in our clinical program. We would look to step stepwise look at longer term patients to see if there is benefit there.

But clearly we want to get our phase II results evaluate those patients that now we're up to one year and that will help inform us for those next steps.

Okay, great. Thank you.

Thank you.

Again for anyone else, who wants to ask question you May Press Star then the number one on <unk>.

And keypad.

Your next question comes from the line of Orin leave not from H C. Wainwright. Your line is open.

Hi, guys. Thanks for taking the questions I have a few quick is.

On slide 13.

Just wanted to clarify something you said earlier when you talked about taking your time to make sure.

You do everything right on this study so that it could be I guess registration quality, it's maybe how I interpreted that I don't want to read too much into that statement, but are you potentially implying that if this looks.

Really robust at this could theoretically.

Serve as a pivotal and you'd only have to do one phase III after that.

Am I, putting words in your mouth and I have a couple of follow ups.

Yes, Oren great to talk with you.

So.

When we're doing a phase II trial of this type.

It is essentially in many ways a phase III trial its multinational.

We have all the controls that we would run in a phase III and so while the study itself has been sized as the phase III and I think that's important to stress we are.

Sizing with based on a on a small phase one two trials. So we have to be cognizant of that we sized it empowered it as a phase two that means not at 90% power.

It's more a powered toward what you would typically look for for phase II, which is really to show the efficacy or the activity I should say that would then allow us to design the phase III and power that accordingly, but of course, we never know I mean, if we saw results like what we've seen in the current trial.

The phase one two trial, obviously very strong.

May be.

We may.

See even very strong outcome here.

And so we wanted to be prepared for that so.

We are taking the steps to make sure that if the study was.

With highly had a very strong outcome as well as the FDA would agree.

We obviously not had an end of phase II meeting with the FDA.

We would expect to be able to take that into that end of phase II meeting and have a discussion with them to see if that trial could apply as one of the two potential registration trials. So that's what I meant by that statement, we would expect that the FDA will require two registration trials and we just wanted to make sure that if the trial was highly successful that there would.

The opportunity to potentially have that be one of the two.

Got it.

And following up on <unk>.

I want to make sure im not misunderstanding, what youre doing with this higher dose and I'm not sure. If you mentioned the timing of that and I kind of missed it that six four milligram.

Is that I thought you were just looking at safety there, but are you in fact, we're looking at.

Efficacy measures on the same <unk> endpoints.

If the former I guess does that give you much new information for phase III other than safety and I guess you did mentioned earlier you could theoretically just take two doses in phase III is that right.

If you wanted to.

That's correct, yes. So it is just safety I mean, we will get some read out of it obviously, but we're not we don't have the criteria around the patients like we do in the.

In the efficacy trials. So I think it's important to understand they are safety trials.

That we're running here for $3 13.

Okay.

So looking at both single dose that 0.6 slides unilaterally as well as bilaterally and so those are really to support only safety.

And the idea would be that it would support.

Going into phase III with potentially two doses <unk> three to the current dose as well as 0.64.

As well as in doing safety and bilateral patients at those doses. So.

Which we'd probably just due to the highest dose at that point, but that's part of what we'll be looking at based on the results, but the idea is that it really supports moving into the phase III program potentially with two doses in efficacy.

Okay and speaking of higher doses on for 13, you said you were doing at least one higher dose cohort I think with 12 patients starting at that 0.7% something.

When might you go.

Plan or expect to go higher than that too.

Correct. We're go to at least one higher dose what we do is a once a specified number of patients complete.

<unk> following.

The randomization in dosing.

We then evaluate we actually have an independent panel.

That evaluates for safety and if they deem that there is good safety, then we would escalate to a higher dose.

Okay.

And lastly, I apologize for this March 'twenty two event.

Clearly, we're going to get some clinical perspectives here should we look forward to also maybe getting some more robust I guess commercial outlook for one or both of these products from you guys. I don't know if you've had a chance to dig much one of that or or will we have to wait for the data before you can even begin to.

Really.

Evaluate the opportunity there.

Why don't I, let Paul address that question.

Hi, Orin.

The intent of the R&D event is really to focus on.

Conditions themselves background on the disease burden.

<unk> met.

That makes sense from a treatment standpoint, and then.

<unk>.

A phase one two.

The trial results.

Bye.

Opinion leaders.

Key opinion leaders really arent.

All right.

Experts when it comes to commercialization I think.

The plan or and as to sort of defer that discussion until a follow on opportunity. This is really meant to be a really good primer for investors on both tinnitus and hearing loss.

Clinical perspective, and then put the clinical results in the context of that so we understand that.

While these markets are big.

And lots of unmet medical need because no approved drug therapeutics for.

Our other tinnitus or hearing loss, we do.

I understand that.

That's some additional understanding about the.

Target patient populations and commercial opportunity is something.

Something that we will be doing but not at this session.

Fair enough. Thank you good luck.

Thank you Arne.

Thanks, Brian .

There are no further questions at this time, turning the call back to Dr.

Dave Weber.

Yes.

Thank you everyone for participating in our call today, we look forward to meeting with many of you at the upcoming Cowen and the Oppenheimer Virtual health care conferences and also hope that you will join us for our R&D event on March 22nd.

Have a good evening everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Hum.

Okay.

Yes.

Okay.

Thank you.

Sure.

Yes.

Okay.

Thank you.

[music].

Yeah.

Yes.

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2021 autonomy, Inc earnings Conference call.

At this time all participants are in listen only mode. After the speaker presentation, there will be a question and answer session.

Ask a question. During this time, you will need to press star one on your telephone keypad.

If you require any further assistance please press star zero.

I would like to hand, the conference over to your speaker today, Mr. Robert Cool. Thank you. Please go ahead.

Please refer to Autonomies filings with the SEC, which are available from the SEC or on the autonomy website for information concerning the risk factors that could affect the company. The autonomy specifically disclaims any obligation to update any forward looking statements, except as required by law I will now turn the call over today.

Weber, President and CEO of autonomy.

Thank you Robert Good afternoon, everyone and thank you for joining us on this call to discuss Autonomies recent business updates as well as our financial results for the fourth quarter and full year.

Key takeaways from this update are as follows.

As we announced last week, we have completed patient enrollment in the OTO 313 phase III trial intended to US ahead of schedule with topline results for all time points expected in mid 2022.

We also fully enrolled the OTO 413 phase Iia cohort and hearing loss earlier than planned and moved up the timing for top line results to early in the second quarter of 2022.

Additionally, we have initiated clinical evaluation of higher dosing for OTO 413, and are initiating safety evaluation of higher and bilateral dosing for OTO 313.

The data from this expanded set of clinical studies will support and inform our next steps for both programs.

We believe these include initiating a full dose ranging phase two efficacy trial for OTO 413 by the end of this year and initiating the phase III program for OTO 313 in the first half of 2023.

Regarding our <unk> <unk> five gene therapy program, we continue to make good progress with ongoing IND, enabling activities and still expect to file an IND in the first half of 2023.

We're also continuing to progress our two other preclinical programs OTO 510 for auto protection and <unk> six X X for severe hearing loss.

Finally, our balance sheet remains strong and we continue to expect that our current cash will fund the company through these multiple clinical readouts and into the second half of 2023.

Beginning with OTO 313, we have completed enrollment in the phase III trial ahead of schedule re randomized 153 patients with persistent unilateral tinnitus or at least moderate severity, which is above our targeted enrollment of 140 patients pace.

Patients were randomized one to one to a single inter tympanic injection of 0.32 milligram other 313 or placebo and are being followed for four months the.

The primary endpoint is the same as reported for the successful phase two trial, a responder analysis based on the proportion of patients through report a clinically meaningful improvement in the tinnitus functional index or <unk> from baseline to month wanted to following treatment.

To assess durability of the OTO 313 treatment effect, we extended the follow up period out to four months compliance.

Compliance for completion of the Tsi and daily symptom diary remains high and we look forward to announcing top line results for all time points in mid 2022.

Additionally, we are close to initiating safety evaluations for bilateral as well as higher dosing of OTO 313.

This effort is important for the program since bilateral patients comprised approximately 50% of the tentative population.

Furthermore, the higher dose, we're evaluating a 0.64 milligram twice the dose used in our successful phase one two trial an ongoing phase II.

We expect results from this one month safety evaluation in the second half of 2022.

This data together with the phase II results are expected to support an end of phase II meeting with the FDA and inform the design of the phase III clinical program planned to start in the first half of 2023.

Our next clinical stage program is OTO 413 for hearing loss.

Following a successful ascending dose phase one two trial, we initiated a phase iia cohort that enrolled a total of 33 patients with speech in noise hearing loss.

The most common reason that patients seek treatment for hearing loss.

This is a randomized double blind placebo controlled study that randomized patients two to one for a single inter tympanic injection of <unk>, three milligram, OTO 413 or placebo.

Patients are being followed for three months and evaluated using the same three clinically validated speech in noise hearing test used in the prior cohorts.

The digits and noise words, and noise and American English matrix Crave test.

Enrollment of the Phase Iia was completed ahead of schedule and we expect top line results early in the second quarter of 2022.

In addition to the phase Iia, we have also initiated clinical evaluation of higher dosing.

For OTO 413, we expect to enroll approximately 12 hearing loss patients randomized two to one to OTO 413, or placebo and at least one higher dose safety cohort beginning with 0.75 milligrams.

This is more than twice the dose used in our successful phase two trial, which is an important expansion of the clinical data set to support next steps for this program.

Based on results from the phase Iia in higher dose evaluation, we expect to initiate a full dose ranging phase III efficacy trial and hearing loss patients by the end of 2022.

Our third development program is <unk> <unk> five gene therapy targeting <unk>, two which is the most common cause of congenital hearing loss patient.

Patients born with this mutation can have severe to profound deafness in both ears.

That is identified in screening tests now performed routinely in newborns.

Preclinical proof of concept results for <unk> five demonstrate that a single administration of OTO 825 rescues hearing loss and cochlear damage into preclinical models, representing a range of hearing loss severity.

<unk> deficiency.

We have completed a pre IND meeting with the FDA that provided guidance regarding non clinical study design.

Manufacturing requirements and clinical trial considerations and have incorporated this feedback into our IND enabling program.

These activities are ongoing and we expect to file an IND in the first half of 2023.

Our remaining two programs, our OTO 510, and OTO protectant for patients at risk for cisplatin induced hearing loss and <unk>, six X X, which targets hair cell repair a regeneration for patients with severe hearing loss.

Preclinical development continues on both programs.

In summary, we are making good progress in advancing our multiple programs for treating hearing hearing loss and tentative, which represent large untapped markets with significant unmet medical need.

In fact, we believe that the early completion of enrollment for both the OTO 313 phase III and OTO 413 phase Iia trials demonstrate the interest in new therapeutic options for these conditions.

102 trial results for OTO, 313, and OTO 413.

Additionally, members of our senior management team will provide an update on the ongoing trials and outline next steps for these programs.

We hope that you are able to join US for this informative formative session, which is open for registration via the events page on our website.

With that I'll turn the call over to Paul Kerr, our Chief financial and business Officer, who will provide a summary of our financial results and plant.

Thank you, Dave and good afternoon, everyone.

Overall, our expenses for 2021 was slightly above our financial guidance for the year due primarily to the faster than expected enrollment in the <unk> phase III trial.

Which is obviously a favorable situation.

Our balance sheet remains strong and our cash gets us significantly beyond the multiple clinical readouts as Dave has mentioned.

Now let me briefly recap the financial results that are more fully described in today's earnings release and 10-K filings.

In the fourth quarter of 2021, we reported total non-GAAP operating expenses of $11 3 million with GAAP operating expenses totaling $13 2 million.

The primary adjustment for non-GAAP expenses is the exclusion of stock based compensation.

So this is the financial metric that best approximates our spending level.

For the full year 2021, total non-GAAP operating expenses were $42 million.

With GAAP operating expenses totaling $49 4 million.

As mentioned these expense levels slightly exceeded our financial guidance.

Timing differences for the OTO 308 clinical trial expenses.

Going forward, we expect non-GAAP expenses for 2022 totaled $42 million to $44 million.

GAAP expenses to be in the range of $52 million to $54 million.

From a cash perspective, we finished the year with a cash balance, including cash cash equivalents and short term investments of $77 4 million.

We continue to expect that this cash balance will fund the company into the second half of 2023.

With that I will turn the call back over to Dave.

Thank you Paul operator, we are now ready for questions.

Understood at this time I would like to remind everyone in order to ask a question you May Press Star then the number one on your telephone keypad.

Again, Thats star one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.

Your first question comes from the line of Stacy <unk> from Cowen <unk> Company. Your line is open.

Hi, Thanks for taking our questions and congratulations on the progress. So we have a few the first question.

And therefore, they're keen results.

Remind us how to think about the profile of patients enrolled with speech in noise hearing loss with a different parameters in place to maintain consistency of hearing loss.

Can you help us understand the potential path forward for treatment.

The next I'm wondering if you could help narrow some expectations for.

For the tinnitus results in mid 2020 care, David I believe you stated we should expect obviously all of the time points.

Firstly around three results so given your update completed enrollment last week.

Third and designing additional trials for bilateral treatment of tinnitus can you speak to some of the different considerations and recommendations from your expense. Thank you.

Thank you Stacey.

In terms of the $4 13 results and the profile of the patients with regard to hearing loss, we do exclude patients with profound hearing loss based on scanner audiometry.

But we are requiring that patients all show a speech in noise hearing.

Hearing loss.

<unk> by one of the three speech in noise tests that we administer.

Two severe hearing loss.

Normal audiology audio grams as well as within the speech in noise hearing loss.

And so that is the patient population that we are investigating in terms of ensuring the consistency of these patients that's really done by requiring that the patients complete.

A lead in period in which they are also showing consistency of their hearing loss, including the speech in noise hearing loss and so this is something that of course is modeled into all of our clinical trials, including the tinnitus, we believe that doing lead ins that will make the patient.

Allow us to evaluate the disease of the patient at both.

Turning to the expectations for the 313 phase III trial Youre correct in that because now that we've enrolled ahead of time, we're going to include the results for all time points, including week 16 that will be both the primary and secondary endpoints.

And as far as getting more specifics out of time I'll, just say middle of 2022, clearly we are conducting this trial to potentially be.

It is a phase II trial, but if successful and.

With discussions with the FDA, we would look potentially to include that.

As part of our registration package and so for that reason, we are taking great care.

In doing the final visits of patients as well as then going through database.

Ah.

The normal cleanup in the database lock that you would go through so we're obviously going to take great care in that process.

But mid 2022, we can definitely say that we will have all the results for that program.

Additionally, then for the bilateral the a question on bilateral tinnitus and our plans there.

Shortly with bilateral tinnitus it does represent about half the patient population I think it's been obviously great to see the enrollment of the unilateral patients. It's very clear that they represent approximately 50% of the population given how fast we were able to enroll.

And but with the bilateral patients.

Our approach for them, obviously pending our discussions with the FDA in the end of Phase II meeting that we plan to have before the end of the year.

Based on successful phase III data, our plan would be to actually evaluate the bilateral patients and safety studies and not in efficacy studies.

We believe that doing efficacy and bilateral condition may be difficult because there may be different responses between the two years and patients may struggle really identifying and separating the.

Their perceptions based on the years and for that reason.

And so that is something of course that we're talk with the FDA at the end of phase II meeting.

But we think represents a good approach to address those patients as well.

Thanks, so much for the details appreciate.

Appreciate it sure.

Sure. Thank you Stacey.

Your next question comes from the line of Chris Raymond from Piper Sandler Your line is open.

Good afternoon. This is Nick will get back to you on for Chris Thanks for taking the question.

So maybe one just around that.

Air Canada study.

Beyond the primary analysis can you, maybe just remind us or help us understand what the longer term follow up will tell us about potential re dosing frequency.

It will inform on phase III design.

Then maybe a second.

Bit more naive question I guess looking back at some of the previous data for <unk>.

We were interested in the placebo effect on Tsi.

From your analysis is that truly a placebo effect.

Kind of essentially a short term thing that tidjane and jacobina injection in general.

Thanks Nicole.

With regard to the phase II tentative beyond the primary outcome.

What we're looking at.

Beyond week.

<unk> eight and looking at month, three and four is really to understand how patients continue to.

Respond in their tinnitus as you may recall in the phase one two trial, we saw patients at week eight continuing to improve.

And so the question that we have is do these same patients then continued to improve over months three and four the other thing that we wanted to observe is of course with those patients.

If that is the case, where would the optimum re dosing period b for.

For those patients as well as perhaps the patients who don't respond initially.

And so by by looking at month, three and four we believe that will inform us of what we would want to do on the safety studies.

To support the safety of re dosing, whether that would be month to month, three or month for any of which we think are very viable from a clinician and patient standpoint.

With regards to than our approach it would be taking that information into the FDA and.

And in the phase II meeting and discussing with them the.

Approach that we would take.

For the safety program with with regards to the re dosing frequency.

That would then support approval of the product. So we do not expect at this point in time that we would be running re dosing on efficacy it would only be safety and thats very consistent with prior discussions that we've had with the agency on other programs as well as what.

Previous tentative program that had been conducted in the field.

With.

Guards to the placebo in any short term benefit.

We've never seen in our programs that there was a benefit to enter to panic injection of placebo.

Of course that would be very difficult to separate from a placebo response, if you will.

But there is no basis from any of our animal work are from human work that would suggest to us that the enter tympanic injection itself has any short term benefit.

Thank you.

With the with regards to the placebo response that we saw in the earlier study it was very small.

Really essentially one patient who had the placebo.

Spot.

And I think that really is attributed to what we're doing in terms of having the responder analysis, where we really require the patients to be clinically meaningfully improved at two consecutive time points month, one and at month, two and I think that really then takes away that variability that you get.

Yeah.

That may just be due to a placebo effect.

So that's our approach.

We obviously will be interested at looking at with the phase III trial results.

Great. Thanks, so much.

Thank you Nicole.

Your next question comes from the line of Francois <unk> from Oppenheimer. Your line is open.

Alright, Thanks for taking my questions and congrats on the progress of the early enrollment completion.

Just a couple here so in terms of for one three and just the field being so novel in terms of endpoints that one can you just help us maybe set expectations.

For what we considered a successful trial and then just when you're going up to a dose that's twice as big as the one.

In previous trials can you just talk about maybe the rationale for why higher dose.

Okay on the safety side and maybe help.

Terms of efficacy.

Okay. Thanks, Thanks, Francois great to talk with you with.

With regards to for one three and the endpoint. So I mean, it is true to say that the FDA has never really.

Evaluated a program with speech in noise.

Endpoints.

In registration in future trials as well as potential registration trials.

We believe that gathering that data is the best way to be informed as well as having productive conversations with the FDA.

Importantly, I think people need to recognize that these tests have never been used to support the approval of a drug.

And so as <unk> been develop they've been developed by Audiologist to really help them understand and assess patients.

And the current modalities that they can treat those patients such as hearing AIDS and so that is why we think it's very important that we're doing the work we're doing.

Registration trial trials, so that's what we're trying to figure out.

In regards to what would a successful trial look like at this stage with the phase Iia, what we're really looking to do is to confirm the observations that we've had demonstrating activity of $4 13.

And.

That would then support going into larger trials.

That's connected to your second question of course with regards to the higher dose and this is really true of both of our programs.

With $4 13.

With the good safety profile there there was very clear opportunity to go up in dose.

Clearly the current dose showed us strong efficacy.

We are looking to confirm in the phase Iia, but as the developer you always want to.

See what you could do with higher dose, particularly if you have a good safety profile, which we do.

Bdnf I remind people as endogenous.

So we express Bdnf enduring development Embryonically.

So it is something our body is used to and it has a very good safety profile from what we've seen so.

Obviously for that going up in dose makes sense with regards to $3 13. It was a little bit more involved because <unk> is a very potent molecule.

And but.

Our results from the phase one two which showed very good safety.

In fact, the safety of patients on the drug actually showed a better safety profile with fewer adverse events that were related than the placebo.

And so as a result of that we decided to go back in and do additional GOP Tox work that would allow US to then go up to this higher level that we're now approaching.

If it were evaluating I think importantly, there. It's the same thing one of the things that not only are we would we expect that a higher dose may provide even more efficacy.

We expect to confirm with the current phase III.

And it allows us to do a single administration, yet provide very prolonged exposure to drug something we do talk about that other people do not have.

And one of the important parts of that is that higher dose actually also translates into longer duration of exposure.

So we're not just looking at a higher dose in terms of temporary plasma.

I should say target tissue levels being higher but also an extension of the exposure. So clearly what we would be interested there in would be would patients who perhaps maybe not respond to <unk> in our initial phase one two trial, whether there might be now those patients.

Might respond because of that not only higher level, but sustained level for even a longer period.

Clearly that's why we are interested in going to higher drug levels, and we think theres, a very clear and easy path in which to incorporate.

Additional drug dosing in the future work, whether that would be by doing two doses in a phase III trial for example, with $3 13 versus only a single dose we think that's very doable and I. Thank you.

Most people would agree given that we've been able to enroll the present trial ahead of schedule.

Thanks, David Thats extremely helpful.

If I could sneak in this last one here as you're getting more knowledgeable.

<unk>.

Is it true then the fact that maybe if you had to adjust to it.

The central problem.

It's almost too late to solved or is this more of just a thought.

That.

You might have.

Yes, it's not proven.

So there is no definitive I would say definitive scientific evidence that there is the switch from peripheral to central it is our belief in the field many kols.

I do believe that there may be a point at which there is a central involvement but of course without with the absence of an actual therapeutic it's difficult to really.

Evaluate that.

It is one of the reasons why we added additional patients into our study of looking up to one year.

Most of the Kols, who think there may be that type of central involvement or conversion believe it's beyond the one year period, maybe even two or three no. One has a set time period.

But I think it is a question that remains in the field and so are our approach on this on the development side is to focus on the near term patients, which are clearly out there given our enrollment.

Timing.

Because it really helps us to identify tentative sedatives due to cochlea origin events as opposed to for example, maybe.

That was not.

Associated with the cochlea or damage to the cochlea.

But clearly we want to get our phase II results evaluate those patients that now are up to one year and that will help inform us for those next steps.

Okay, great. Thank you.

Thank you.

Again for anyone else, who wants to ask question you May Press Star then the number one on your telephone keypad.

Your next question comes from the line of Oren <unk> from H C. Wainwright. Your line is open.

Hi, guys. Thanks for taking the questions I have a few quick is.

2013.

Just wanted to clarify something you said earlier when you talked about taking your time to make sure you do everything right on this study so that it could be I guess registration quality is maybe how I interpreted that I don't want to read too much into that statement, but are you potentially implying that if this looks really robust set this could theoretically.

Serve as a pivotal and you'd only have to do one phase III after that.

For am I, putting words in your mouth.

The follow ups.

Yes, Oren great to talk with you.

<unk>.

When we're doing a phase II trial of this type.

It is essentially in many ways a phase III trial its multinational.

We have all the controls that we would run in our phase III and so while the study itself has been sized as the phase III and I think that's important to stress.

Our sizing with based on a on a small phase one two trials. So we have to be cognizant of that we sized it empowered it as a phase two that means not at 90% power.

The phase one two trial, obviously very strong.

May be.

We may.

See even very strong outcome here.

And so we wanted to be prepared for that so.

We are taking the steps to make sure that if the study was.

With highly had a very strong outcome as well as the FDA would agree.

We obviously not had an end of phase II meeting with the FDA.

We would expect to be able to take that into that end of phase II meeting and have a discussion with them to see if that trial could apply as one of the two potential registration trials. So that's what I meant by that statement, we would expect that the FDA will require two registration trials and we just want to make sure that if the trial was highly successful that they're at.

Would be the opportunity to potentially have that be one of the two.

Got it.

And following up on <unk>.

I want to make sure im not misunderstanding, what youre doing with this higher dose and I am not sure. If you mentioned the timing of that and I kind of missed at that 0.64 milligram.

Is that I thought you were just looking at safety there, but are you in fact looking at.

Efficacy measures on the same <unk> endpoints.

The former I guess does that give you much new information for phase III other than safety and I guess you did mentioned earlier you could theoretically just take two doses in phase III is that right.

If you wanted to.

That's correct yeah. So it is just safety I mean, we will get some read out of it obviously, but we're not we don't have the criteria around the patients like we do in the.

In the efficacy trials. So I think it's important to understand they are safety trials.

That we're running here for $3 13.

Okay.

So looking at both single dose at 0.6 slides unilaterally as well as bilaterally and so those are really to support only safety.

And the idea would be that it would support.

Going into a phase III with potentially two doses <unk> three to the current dose as well as 0.64.

As well as in doing safety and bilateral patients at those doses. So.

Which we'd probably just do the highest dose at that point, but that's part of what we'll be looking at based on the results, but the idea is that it really supports moving into the phase III program potentially with two doses in efficacy.

Okay and speaking of higher doses on <unk>. You said you were doing at least one higher dose cohort with 12 patients starting at that 0.7% something.

When might you go.

Plan or expect to go higher than that too.

Correct. We're go to at least one higher dose what we do is a once a specified number of patients complete.

<unk> following.

The randomization in dosing.

We then evaluate we actually have an independent panel.

That evaluates for safety and if they deem that there is good safety, then we would escalate to a higher dose.

Okay.

And lastly, I apologize for this March 'twenty two event.

Clearly, we're going to get some clinical perspectives here should we look forward to also maybe getting some more.

Robust I guess commercial outlook for one or most of these products from you guys. I don't know if you've had a chance to dig much one of that or or will we have to wait for the data before you can even begin to really.

Evaluate the opportunity there.

Or why don't I, let Paul address that question.

Yeah, Hi, Erinn.

The intent of the <unk>.

R&D event is really to focus on.

Conditions themselves background on the disease burden the pathophysiology.

That makes sense from a treatment standpoint, and then view.

<unk>.

A phase one two.

Trial results.

Bye.

Pinion leaders.

Key opinion leaders really arent.

Alright.

Experts when it comes to commercialization I think where the plan or is that or defer that discussion until.

A follow on opportunity. This is really meant to be a really good primer for investors on both tinnitus and hearing loss.

Clinical perspective, and then put the clinical results in the context of that so we understand that.

While these markets are big.

And lots of unmet medical need because no approved therapeutics for.

Our other tinnitus or hearing loss.

Do I understand that.

That's some additional understanding about the.

Target patient populations and commercial opportunity is.

Is something that we'll be doing but not at this session.

Fair enough. Thank you good luck.

Thank you Arne.

Thanks, Brian .

There are no further questions at this time, turning the call back to Dr. Dave Weber.

Yes.

Have a good evening everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

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