Otonomy Inc (NASDAQ:OTIC)

Lots of Good News out for Otonomy Inc (NASDAQ:OTIC)

Otonomy Inc (NASDAQ:OTIC)

Otonomy Inc (NASDAQ:OTIC) released their Q3 earnings after today’s market close and beat analyst expectations. Otonomy posted a net loss of (-$20.99) million, or (-$0.69) per share – versus the consensus forecast of a (-$0.76) EPS loss. Revenues for the quarter came in at $300,000.

Otonomy Inc (NASDAQ:OTIC)

San Diego, CA-based Otonomy Inc (NASDAQ:OTIC) is a biopharmaceutical company that develops and commercializes therapeutics for patients suffering from ear diseases and disorders. FDA-approved OTIPRIO® (ciprofloxacin otic suspension) is used during tympanostomy tube placement surgery in pediatric patients, an sNDA has been accepted for filing by the FDA for acute otitis externa (AOE) and a successful End-of-Phase 2 review has been completed with the FDA for acute otitis media with tympanostomy tubes (AOMT). OTIVIDEXTM is a steroid in development for the treatment of Ménière’s disease.

David A. Weber, Ph.D., president and CEO of Otonomy Inc (NASDAQ:OTIC) said “Today’s announcement of successful results for OTIVIDEX in the AVERTS-2 trial is an important milestone for the company and renews our excitement and commitment to continuing the registration program for OTIVIDEX in Ménière’s disease. We believe that the continuation of OTIVIDEX development for Ménière’s disease and the advancement of our other programs targeting important unmet medical needs including hearing loss and tinnitus provide an attractive path forward for Otonomy.”

Phase 3 Endpoints Met

Otonomy Inc (NASDAQ:OTIC) also announced today that the AVERTS-2 Phase 3 clinical trial of OTIVIDEX in patients with Ménière’s disease achieved its primary efficacy endpoint. The OTIVIDEX group demonstrated a 6.2 day reduction in the mean reported number of DVD from baseline to Month 3 with a 2.5 day mean difference between OTIVIDEX and placebo in Month 3. Otonomy plans to review these results with the U.S. Food and Drug Administration (FDA) and discuss clinical requirements for registration of OTIVIDEX for patients with Ménière’s disease. The company expects to provide an update from discussions with the FDA during the first quarter of 2018.

OTIC Stock Performance

Otonomy Inc (NASDAQ:OTIC) sales were first reported in 2016. That figure was $700,000. Earnings for 2016 were, on a per share basis, reported as a loss of (-$3.69). For the year prior, 2015, the EPS loss was (-$2.58).

The current closing price of $2.80 represents a large discount to the stock’s cash/share value of $4.97 as well as its book/share value of $4.96.

Four investment firms follow Otonomy Inc (NASDAQ:OTIC). Two rate OTIC stock as a “Strong Buy”, while the other two rate the shares as a “Hold”.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $OTIC and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Otonomy Inc (NASDAQ:OTIC)

Otonomy Inc (NASDAQ:OTIC) Stock Slammed

Otonomy Inc (NASDAQ:OTIC)

Otonomy Inc (NASDAQ:OTIC) stock felt the market’s wrath after its novel treatment for Meniere’s disease, OTIVIDEX, failed to meet its primary endpoint in a Phase 3 clinical trial. Investors sent the stock tumbling 82.81% to lows of $3.45 following the disappointing clinical trial results.

Otonomy Inc (NASDAQ:OTIC)
One month OTIC stock price chart.

Lost Opportunity

The biopharmaceutical company shed more than80% of its market value after confirming it was suspending development of OTIVIDEX for chronic disorder of the inner ear. The stock registered a new 52-week low of $3.45 and is currently trading in a $3.45-$4.20 trading range.

Prior to the selloff, Otonomy Inc. (NASDAQ:OTIC) stock was trading over $20 a share as investors remained confident about OTIVIDEX prospects. The U.S. Food and Drug Administration (FDA) is yet to approve any drug for Meniere’s disease. Patients struggling with the chronic medical condition have to contend with compounded steroids to combat the effects of the disease.

Successful clinical trials could have exposed Otonomy Inc (NASDAQ:OTIC) stock to a $500 million market opportunity in the U.S. alone, according to Cowen & Co analyst Ken Cacciatore. The technology behind OTIVIDEX is currently in use in another ear infection drug that generated $300,000 in revenue for the company in the second quarter.

OTIVIDEX Phase 3 Trial Results

According to the biopharmaceutical company, OTIVIDEX therapy showed similar reductions in the number and severity of vertigo episodes compared to Placebo. The candidate drug missed its primary endpoint which was the count of definitive vertigo days. It also failed to meet its secondary goals.

“Based on these results, we are immediately suspending all development activities for OTIVIDEX including the ongoing AVERTS-2 trial. In addition, the company is undertaking a review of its product pipeline and commercial efforts to identify opportunities to extend its cash runway and build shareholder value,” said CEO, David Weber.

Guidance Suspension

In the wake of the disappointing clinical trial results, Otonomy Inc (NASDAQ:OTIC) has withdrawn its spending guidance for the year as it moves to review its business. The company had a total of $150.5 million in cash and cash equivalent as of the end of the second quarter of which it planned to use between $80-85 million as operating expense.

The disappointing clinical trial results and the stock sell off wave has since evoked a wave of class action investigations from law firms. A number of law firms are currently investigating the company over possible violations of federal security laws.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $OTIC and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.