Surprise: Did Otonomy bring its lead ear drug back from the dead?
Shares of Otonomy $OTIC went into blastoff mode after the market closed on Wednesday, as researchers for the biotech reported positive Phase III data for their lead drug for Ménière’s disease. And that comes just two months after the first Phase III went belly up in an ugly flop that crushed the stock price and forced the biotech to reorganize and cut staff.
The second Phase III, following failures for the Phase IIb as well as the first late-stage trial, evidently backed up the company’s belief that it could mine positive data with their drug if they focused on the average number of vertigo days at month 3.
What’s odd, though, is after the first Phase III flop, the company announced and later confirmed that it was suspending all work on the drug, including the AVERTS-2 trial reported on today.
The biotech says today that their study hit the primary endpoint among patients with Ménière’s disease, with a p value of 0.029, as the drug arm achieved a 6.2-day mean reduction in definitive vertigo days and a 2.5-day mean difference between the drug and placebo groups.
Otonomy now plans to hustle the data to regulators to see about the clinical requirements that will need to be met before filing for an approval.
That’s right along what investors were looking to hear. The stock immediately rocketed up 151% on the results.
Some of the analysts, though, raised an eyebrow over the data, noting that it was at least partially based on the 105 patients who had completed their diary work on results, out of 174 in the trial. Researchers said that there was a 68% reduction in vertigo frequency from baseline to Month 3 in the Otividex group compared to 40% for placebo, so there was clearly a placebo response to reckon with.
So some questions about what they found in a trial they had said was suspended are lingering.
“The success of the AVERTS-2 trial clearly demonstrates the treatment benefit of Otividex in patients with Ménière’s disease, and these results are consistent with our expectations based on the Phase 2b trial,” said David Weber, president and CEO of Otonomy. “We will complete analysis of this trial and prepare for discussions with the FDA which we expect to occur during the first quarter of 2018. We will also further assess the AVERTS-1 trial to identify factors that might explain the different outcome in that trial and inform the design of our clinical program to support an NDA filing.”