A few days after Otonomy watched its share price $OTIC crater after its lead drug for Ménière’s disease failed a slate of pivotal endpoints in Phase III, the biotech is restructuring and hunkering down.
The San Diego-based company said today that it is laying off a third of its staff not engaged in a commercialization effort in the wake of the clinical disaster, which came after researchers tried to push through to an approval after the same therapy had failed in a Phase IIb trial. The p-values in the trial were terrible, running from 0.89 to 0.99, with high placebo responses — though the researchers had also recorded a relatively high placebo response in the failed Phase IIb trial.
At the end of this year Otonomy expects to have $120 million to $125 million in cash on hand, with a $45 million budget laid out for 2018.
“The changes we are making give us the cash runway we need to build shareholder value by focusing on key assets in our product pipeline which we believe is still the broadest in the otology field,” said CEO David Weber. “We have a tremendous opportunity to utilize our experience, expertise, and resources to address important unmet medical needs such as hearing loss and tinnitus, and I look forward to outlining our plans in future business updates.”
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