Q2 2022 Otonomy Inc Earnings Call
Okay.
Good day, and thank you for standing by and welcome to the second quarter 2022 Autonomy, Inc. Earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need.
To press Star one one on your telephone please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Mr. Robert <unk> with ICR Westlake the floor is yours.
Thank you Carmen and good afternoon, and welcome to autonomy second quarter 2022 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 management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results. 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 autonomy, specifically disclaims any obligation to update any forward looking statements, except as required by law now I will turn the call over to Dave Weber, President and CEO .
Oh 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 second quarter.
The key message from this update is that we continue to execute well on our operational plan.
Most importantly, we are on track with our announcement of phase two tenants or three felt for OTO 313 in August .
We have also completed patient enrollment in the safety evaluation of higher and bilateral dosing of OTO 313, and have completed patient enrollment for the evaluation of higher dosing of OTO 413, and hearing loss patients.
I'll briefly review these activities provide a summary of our financial results for the quarter and then we can open up the call for any questions.
Beginning with the OTO 313 program for tentative, we're excited to be approaching the availability of phase II results in the next month as a reminder, we randomized 153 patients with persistent unilateral tinnitus or at least moderate severity.
This was above our targeted enrollment of 140 patients.
Patients were randomized one to one to a single inter tympanic injection of 0.32 milligram, OTO 313, or placebo and followed for four months.
Primary endpoint is the same as reported for the successful phase one two trial a responder analysis based on the proportion of patients who report a clinically meaningful improvement in the tentative functional index or <unk> from baseline to month, one and two following treatment.
To assess durability of the OTO 313 treatment effect, we extended the follow up period out to four months and we will have data for all time points to report in August .
All patients have completed their study visits and I can report that we had excellent compliance in the trial with completion of the T F I exceeding 98% across all randomized subjects and visits.
In parallel with completing the phase II trial. We are also fully enrolled several study cohorts to evaluate the safety of bilateral as well as higher dosing for OTO 313.
This effort is important for the program since bilateral patients comprise approximately 50% of the tentative population and the higher dose. We're evaluating is 0.64 milligram twice the dose used in the phase one two and phase two trials.
As planned we enrolled 12 tentative patients randomized three to one to OTO 313 or placebo in each of the three dose cohorts zero 6.4 milligram unilateral.
0.32 milligram bilateral and then after a safety review of the first two cohorts 0.64 milligrams bilateral.
Well this is primarily a safety evaluation with a broader enrollment criteria.
Our phase II trial, we will have a tsi assessment one month after dosing to look for potential differences in response from baseline versus placebo.
We expect topline results from these cohorts in the third quarter 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.
Moving to our next program OTO 413 for hearing loss I summarize the positive results from our phase Iia trial during our last quarterly call.
This trial corroborated findings from the previous study demonstrating that a single entered tympanic injection of <unk> three milligram OTO 413 provide a clinically meaningful treatment benefit versus placebo across multiple speech in noise hearing tests as well as the patient global impression of change I can affect.
<unk> time points of day, 57 and day 85.
In particular, we were pleased to see a clear signal of what the words in Neuss test, which is our preferred test because it is well regarded by Ali Audiologist and extensively validated and hearing lots of patients.
40% of OTO 413 subjects demonstrated a clinically meaningful improvement at both day 57, and day 85, with the wind test versus zero percent for placebo.
Another important attribute of this test is this ability to generate a speech intelligibility curve for each patient at each time point. The case studies that we have included in our corporate slide deck provided a nice demonstration of the hearing improvement following a single treatment with <unk> three milligrams of OTO 413.
Okay.
Similar to our approach with OTO 313, we've also been evaluating higher doses for OTO 413.
In this case, we are conducting four clinical evaluations of two higher doses of <unk> 75, milligram and one five milligram, which equate to two five and five times the dose used in the phase Iia trial.
We have completed enrollment of 19 patients in each of these dose cohorts randomized two to one to OTO 413 or placebo.
Patient enrollment criteria. The three month follow up period and endpoints are all the same as the phase Iia trial, we expect to have results from these higher dose cohorts in the fourth quarter of 2022, which will support our initiation of a dose ranging phase III efficacy trial plan.
To start in the first quarter of 2023.
Our third development program is OTO 825 gene therapy targeting <unk>, two which is the most common cause of congenital hearing loss.
<unk> 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 the auto 825 demonstrate that a single administration of OTO 825 rescue hearing loss and cochlear damage in two preclinical models, representing a range of hearing loss severity caused by <unk> deficiency.
We have completed a pre IND meeting with the FDA that provided guidance regarding non clinical study design.
Any factoring 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 how to protect it for patients at risk for cisplatin induced hearing loss and <unk> X X a potential treatment for patients with severe hearing loss.
Preclinical development continues on both of these programs.
In summary, we are making good progress in advancing our multiple clinical programs for treating hearing loss and tinnitus, which represent large untapped markets with significant unmet medical need.
We are looking forward to our phase III tentative results for OTO 313 in August .
Additionally, we have clinical readouts for hire and bilateral dosing for OTO 313 expected in the third quarter and results from evaluation of higher dosing of OTO 413 in the fourth quarter.
With multiple Readouts will inform our next steps for both programs, which are expected to include initiation of a dose ranging phase II efficacy trial for OTO 413 in the first quarter of 2023 and initiation of the phase III program for OTO 313, and the FERC half of 2023.
Finally, a brief update on our financials. We are on track with our spending guidance for 2022, which is GAAP operating expenses of 52 to 54 million and non-GAAP expenses of $42 million to $44 million.
For the second quarter, we reported GAAP operating expenses totaling $12 8 million and non-GAAP expenses of $11 million.
The adjustment for non-GAAP expenses is the exclusion of stock based compensation.
From a cash perspective, we finished the second quarter with a cash balance, including cash cash equivalents and short term investments of $53 1 million.
We expect that this current cash balance will fund the company through our multiple upcoming clinical readouts.
Operator, we are now ready for questions.
Thank you Ann as a reminder to ask a question simply press star one on your telephone.
So I hit Star one one on your telephone one moment for our first question.
Our first question is from Ken Cacciatore with Cowen. Please go ahead.
Hey, David Paul Real Good luck ahead of all this important data disclosures, Dave maybe a hit of 313 can you just remind us the steps that you all took to try to minimize the placebo response in this study and then maybe either you or Paul can talk about the tinnitus market opportunity just a review of it would be fantastic.
Thanks, so much.
Okay, Thanks, Ken and I appreciate that.
The questions here. So yes, so in terms of minimizing the placebo response in several steps that we've taken first of all I think it's important that it is a one to one randomization that does help.
Based on historically looking at literature on placebo response, when you have more than two arms. The more arms you have tend to to cause more placebo response. Additionally, it's randomized one to one.
We did increase the level of severity, which we also think will help with the placebo response, so patients are into more of a higher up in the moderate severe level of disease, which we think will help on the placebo I think the other things that are.
Important for placebo are both the endpoints that we're looking at the <unk> is a 25 point questionnaire. So it's not a simple question are single question. It really is a questionnaire that they have to answer on each of their study visits.
And so that really provides I think.
Nice control arm placebo response. In addition, they have other endpoints as we know the loudness and annoyance that are done on a daily and then the patient global impression of change and then I think the final thing that really helps in terms of addressing placebo response is the multiple time points required to demonstrate that improvement.
Their tentative that is that we require improvements at both day at both month, one and at month two.
So consecutive time points have to demonstrate that clinically meaningful level of improvement. So I think all of those are key factors in helping to manage the placebo response and obviously, we're looking forward to the results of the study.
With regards to the market when I turn that over to Paul and let Paul address that question.
Yeah, Thanks, Dave and thanks for the question Ken.
We have a slide in our slide deck. So I'll just make some comments referencing that if thats going to take a look at that after the call.
It's a large market about 10%.
People in the U S are affected by tinnitus and about.
A quarter of those so 2% to 3%.
At our population.
Their tenant is to sort of moderate to severe.
The level of visibility of these patients have is pretty significant as you can imagine if you had a loud noise roaring buzzing humming that was always on.
It would be impactful not only when you're trying to sleep, we're concentrating a quiet room, but just.
Going about your daily life, and so the level of impact these patients have is pretty significant.
And unfortunately, there really isn't much too.
Help that.
The approaches that are used today are basically coping mechanisms, whether it's the white noise machine.
Hearing AIDS will be tried but it doesn't actually work.
For many patients and then things like cognitive behavioral training that basically just helps the patient deal with it rather than.
Actually providing an underlying treatment. So 313, we're excited about it because it's actually a disease modifying therapy.
And that's what patients and physicians really want.
The.
Terms of the other parts of the commercial opportunity, we think it fits very nicely into office based treatment.
Physician administered drug will fit in under the buy and Bill model, there's already a CPT code to be interdependent injection itself and so.
I mean, we get the product to market then we would apply for a J code practically be covered under that so it's.
Just to sum up large patient population.
Significant disease burden associated.
Nothing that really is disease, modifying or or helping the underlying level of severity in these patients and sort of wide open commercial opportunity and we think the market opportunity based upon third party researches.
Over $1 billion here in the U S alone.
Thanks for the question Ken.
Thank you.
Thank you one moment for our next question.
The next question comes from Christopher <unk> with Piper Sandler. Please go ahead.
Hey, Thanks, guys.
413.
Just on the.
The timeline, you're getting now to initiation of that dose ranging.
As to in the first quarter I think the last time you guys guided I was year end can you just maybe walk through that.
The slight delay.
Maybe.
I think I remember you talking about an end of phase one meeting Thats right.
Youre going to have with FDA, if I'm remembering correctly, maybe is that driving the delay or is there. Some other some other driver just to getting that up and running.
Yeah, Hi, Chris Thanks, No I don't believe there is a delay there I think we were originally were actually actually ahead on that.
Maybe a flight.
Change there in that we did enrolled 19 patients versus the original plan of 12 patients. So we did go up on our enrollment which of course for the additional cohorts that an additional group of patients. So.
In terms of our timing I mean, the key focus that we have is to initiate.
Our phase III program before the end of the year and I feel like we are on track with that with the timing that we have.
And so.
I think one of the things that's actually remarkable and it kind of speaks to the unmet need that Paul was talking about for tinnitus is that each of our clinical trial has enrolled ahead of schedule and even when we've increased the number of patients. So even for tentative for example, going from $1 40 to $1 53, and that was still ahead of schedule. So I think.
It's actually quite remarkable.
Okay excellent. Thanks, so much guys.
Thank you.
Thank you one moment for our next question.
Our next question is from Francois brisk voice with Oppenheimer. Please go ahead.
Hi, guys. Thanks for taking the questions just a couple here on my end.
Sorry, so in terms of the compliance on the 313, it's been excellent as you mentioned is there is it surprising maybe.
Expectations, maybe a little more difficult based on maybe the pandemic still kind of never ending lingering or.
Any reason why this compliance might have been so good here.
Yes, thanks for the question Frank absolutely.
Unmet need.
I can tell you that only as the compliance just we saw this in the.
The phase <unk> study.
For the program and so it wasn't a surprise to us.
Based on what we see there that we're going to have very good compliance here. It's still is even above our expectation I think we were highly confident in having a 90, 90% plus compliance that 98% compliance is absolutely amazing and I think ultimately it goes down to the patients the patients are.
Highly motivated.
And committed to the study.
I will say there are things that we've done to make that very useful for them for example.
In terms of making sure they have access to complete the questionnaires. This was important because of Covid if patients couldnt make it to the clinical center. So you did have ability to manage that.
But I think it truly is a testament to the unmet need really and I can tell you as well that even when you look at the enrollment as I mentioned, we were ahead of schedule over enrolled our target.
From $1 40 up to $1 53, I think it again just speaks to that tremendous number of patients out there with the unmet need.
Okay, Great and then if I can sneak in another one here.
Are you just focused on the responder analysis for this phase II or is the end number here big enough for potentially CNS. It keeps you on the overall population and I guess kind of a two part question has there ever been any precedent Shea with just responder analysis.
Analysis.
Tinnitus with with the FDA.
Not with regards to the tentative responder has been.
It's been utilized for approval of some drugs I cant go specifically into those but they're ones that our statisticians are familiar with.
And regulatory people, but we will be getting a full set of data. So clearly the responder analysis as our primary.
Based on the phase one two we've carried that forward, but I think what people can expect as a full set of data.
If you look at our.
Our corporate deck, we provide a good solid base of data there both on the overall population as well as on.
The responder analysis as well as the secondary endpoints loudness and annoyance and patient global impression of change. So it will actually be a very large dataset.
And we will obviously look at it.
A variety of different ways Thats, all part of our pre specified statistical analysis plan.
Okay.
I apologize one last one on.
On the <unk> III.
In terms of the higher dose that Youll see I guess to higher doses here in the fourth quarter is there any there.
Some look on Tsi for 313 in the higher dose and bilateral but any signs of efficacy here to expect on the <unk> III side in the fourth quarter.
Well I think thats, what we will be looking for as I've mentioned, unlike the $3 13, where it is the safety evaluation, although we will have <unk> at one month. So we will be able to look into the tenets of the <unk>.
Patients Werent actually randomized in.
To the same inclusion exclusion criteria that we had in the phase III tentative, whereas for $4 13. It was all cap consistent so the same inclusion exclusion criteria and all of the same endpoints and so we're being able to look at those patients again 19 patients per group.
We're being able to look at that data for.
<unk> efficacy in the case of the $4 13, which will then inform of course, what we will do for phase II.
Okay, Great alright, well, thank you very much that differently.
Thank you Frank I appreciate it thank.
Thank you your MSR reminder, to ask a question simply press star one on your telephone.
We have a question from the line of Orin Loopnet with H C. Wainwright. Please go ahead.
Thanks for taking the questions I have a couple.
Just following up on Ken's question about potential placebo response, I mean, obviously, that's a crucial variable here and can you just remind us.
What the lead.
Total lead in.
And screening process was here just sort of get a robust persistent tinnitus population and are you able now to give us any sort of color on what type of screen or a lead and exclusions are failures. You had such that you did in fact throw out a lot of patients.
It might not have been reliable.
Yeah, Thanks, Lauren with regards to placebo in the lead in time. So it's a two week lead in period patients must have had.
The tentative.
From at least two months of onset. So they are already coming in where we believe that will that two months will exclude patients who have spontaneously resolving tentative.
Our research and what's in the literature suggests and worked with Kols suggests that usually within the first month, if its going to spontaneous resolve it well and so that two months gives us extra color and by the time patients are actually done with the lead in phase, which is two weeks there are almost into their third month. So you can see.
With that that helps obviously from the from that standpoint, the other thing that we require for consistency in the <unk>. So these patients are taking the tsi at both are there.
Screening visit and then at baseline and so we're able to look at the consistency of that result, and it is something that we do look at to ensure that there's consistency in not a wide differentiation between the screening and baseline. So we have a very stable disease, and we think that's important as well for screening out.
Maybe patients who are not really responding to the questionnaire appropriately that will help us address that placebo response as well.
And I think I'd just point out remember that there was only one patient that really drove placebo response as we looked at the higher levels of response and clinically meaningfulness in the phase one two so it was a very stark contrast.
It's just that really one patient driving placebo response, there. So obviously this trial will tell us a lot, but I think those steps in the lead in as well as then the nature of the endpoints themselves.
And then of course, you have the multiple time points required to.
To be a responder, we think will help us address placebo response.
And maybe you artfully Dodge this portion, but I guess it could help us from a commercial perspective too in terms of identifying truly chronic patients but of that 157 patients enrolled.
Where there are many more.
Who screen.
Screened out because of sort of waxing and waning nature of their or inconsistent nature of their <unk> scores.
No not really really wasn't a matter of the inconsistency of their scores. It really was more of other inclusion exclusion criteria.
And that would either be the level some of the majority where the level of the <unk> because we had to increase the threshold.
To have a higher level of moderate severity.
And so that was really the number one driver of patients failing inclusion exclusion with just where their tenants of laws and the scale that we've acquired.
Alright, and I know in the past you've spoken about this study the phase II for tenants is being conducted.
The fashion of a potentially registration quality or a pivotal study. So can you just remind us what might you.
Now that could change obviously, what you see the data, but what do you think you need to see in this study for it to potentially be registration quality.
Billable and.
I guess as importantly is that.
At higher dose data.
Crucial for just that.
Crucial to.
I decided what you do in phase III.
If you see better efficacy signal in phase III are you more likely to just add that as a second dose and have two dose phase III or you. Thank you.
Risks potentially just moving up entirely for a phase III.
I don't think I had risk moving up entirely I think I mean.
Clearly this is an area of significant unmet need so I think if we see a strong treating.
Treatment response, similar to what we saw on phase two I think it is a totally commercially available a viable product.
With a 40% responder rate so I think that really the exploration of the higher dose is one that allows us great great flexibility I would not see us jumping to the higher dose alone. If anything we would include the higher dose.
<unk>.
In our development program, but I think that all depends on the benefit that we see here with this current dose.
And whether we can replicate what we saw in phase two so I think it gives us a lot of.
The opportunity.
To look at how we want to proceed based on what we learned from the phase one two.
And in addition of course it covers off the Bilaterals safety, which will be important for our safety program. So I think together that information and then going in with the FDA with all of that in hand, we will be very informative and they help us lay out.
What the program looks like.
Just on the current phase III, yes, it is a phase two that.
We've ran as a fully potential registration program in that it has a statistical analysis plan that had been reviewed by the FDA.
Now at that point, obviously, we have not talked about our endpoints with the FDA at this point that was the plan for in the phase two so we will need to discuss the endpoints and selection with them, but of course I think the FDA recognizes that there is tremendous unmet need here and I think that.
With success of the phase two I think it will give us a good approach into the phase III program.
And just lastly, and pardon me if I should know this but can you remind us are there any pre specified subgroup analysis for this phase II.
Yes. There are yes. There are there are as you know we increased the duration of tentative from looking at just up to six months to looking up to one year. So we will be looking at the duration of tinnitus.
As one of our pre specified subgroup analysis.
Alright, just coming back to me now thanks.
No problem.
A lot of studies here between 2013, and $3 13, Theres a lot of data.
That we've both collected to date as well as what's coming ahead of us. So we're very excited but it does it does.
Make it complicated to me.
Make sure we remember what's what for each of the studies.
Thanks, so much.
Thank you I appreciate it.
Thank you and we have a follow up one moment please.
Yeah.
Francois Your line is open.
Okay, Yes, sorry, just in terms of when you are enrolling SER 301, three just on the bilateral side.
Can you just is it 50 50 split with does that kind of Jive with what some of the literature as to how the enrollment went and just from your talking to Kols in this space and your thoughts on it.
Just discuss maybe the sensitivity of the tsi.
Analysis for someone that's bilateral versus unilateral.
Well I don't think anyone really knows in a clinical setting I mean thats part of what we obviously are doing is really the first ones to apply the tsi to pharmacy pharmaceutical therapy.
In these studies I mean, it has been applied before I shouldn't say that it hasnt. It has been applied but in terms of looking rigorously at.
A unilateral versus bilateral really be something that we're able to learn from.
Enrollment of the $3 13 bilateral groups went very smoothly.
Again, we did that ahead of schedule.
And largely driven by the fact that theres such large populations.
Both bilateral in the unilateral so I think we feel that 50 50 is generally correct.
And.
Sure.
I think the tsi.
Being able to look at how that bilateral patients respond on that will be informative for us but.
I think it is a difficult thing when you're when you depending on what we see there whether the year's respond differently, how that impacts the <unk>, which is of course why in the phase II trial. We've remained focused on only utilize rural patients. It makes it a much cleaner study we believe.
And really being able to look at that efficacy endpoint clearly.
Okay, great. So if a patient just to be clear sorry that if a patient is as bilateral but has miles and it just in one year and then severe and the other ear if needed.
That would that be not eliminated not allowed because overall, it's not moderate to severe or does it have to be margins to be in both years, how does that work.
Well, you're you're testing when youre testing bilateral patients you are only doing the <unk>. So the <unk> or is based on whatever they're feeling so you don't know the interaction between the years with the <unk>. It is what their overall score is.
Which is what makes it again, what will be interesting to look at the data and see how it responds in how patients reported.
So it is it is something that is not as clean as in the unilateral patients.
Perfect Alright.
So why we're looking at those patients more from a safety perspective.
As opposed to.
As opposed to efficacy in the bilateral patients.
Understood. Thanks.
Sure. Thank you Frank.
Thank you and I would now like to turn the conference back to Dave Weber for closing remarks.
Yeah, well. Thank you everyone. I appreciate you participating in our call today, we look forward to talking with you soon about our data.
In the month of August and we hope you have a good evening. Thank you.
And this concludes today's conference call. Thank you for participating and you may now disconnect.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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