 Positive top-line results reported for Phase 12 trial of OTO-313 in tinnitus patients Public offering completed for total gross proceeds of 69.1 million Results from Phase 3 trial of OTIVIDEX in Ménières disease expected in first quarter of 2021 Results from Phase 12 trial of OTO-413 in hearing loss expected in fourth quarter of 2020Conference call and webcast today at 5 p.m. ETSAN DIEGO, Aug. 04, 2020 GLOBE NEWSWIRE -- Otonomy, Inc. Nasdaq: OTIC, a biopharmaceutical company dedicated to the development of innovative therapeutics for neurotology, today reported financial results for the quarter ended June 30, 2020 and provided an update on its product pipeline and corporate activities. The company will host a conference call and webcast today at 5 p.m. ET to discuss recent highlights and financial results.We have made great strides in advancing our product pipeline and achieving our corporate objectives during the past several months despite the challenges presented by the COVID-19 pandemic, said David A. Weber, Ph.D., president and CEO of Otonomy. For our clinical programs, we announced positive results for OTO-313 in tinnitus, continued to progress enrollment of our ongoing OTIVIDEX Phase 3 trial in Ménières disease while strengthening its statistical analysis plan, and have nearly completed enrollment of the OTO-413 trial in hearing loss. We also selected a product candidate for our GJB2 gene therapy program, licensed a novel compound for our OTO-6XX hair cell regeneration program, and demonstrated preclinical proof-of-concept for our otoprotection program. To support this broad and rich pipeline, we completed an oversubscribed financing that extends our cash runway and bolsters our shareholder base.Otonomy Program Updates OTO-313: positive top-line results reported from Phase 12 clinical trial in tinnitus. In July 2020, Otonomy reported positive top-line results from the Phase 12 trial of OTO-313 in patients with persistent tinnitus of at least moderate severity. The exploratory efficacy cohort of the trial included 31 evaluable patients randomized to a single intratympanic injection of OTO-313 or placebo 1:1 randomization and then followed for eight weeks. Patients reported the severity of their tinnitus symptoms using the Tinnitus Functional Index TFI, a clinically-validated instrument, and by the daily reporting of their tinnitus loudness and annoyance. The trial achieved its objectives by demonstrating a positive clinical signal for OTO-313 based on a TFI responder analysis, with a favorable safety profile. In particular, 43 of OTO-313 patients were responders based on the TFI at both Day 29 and Day 57 compared to 13 of placebo patients p-value 0.05. Furthermore, OTO-313 patients who were TFI responders on both Day 29 and Day 57 also reported improvements in tinnitus loudness and annoyance levels based on daily diaries and reported improvement in the Patient Global Impression of Change PGIC, a general assessment of tinnitus status. Given these results, Otonomy is advancing OTO-313 into full Phase 2 development which may include evaluation of a higher dose andor retreatment. OTIVIDEX Phase 3 clinical trial in Ménières disease: patient enrollment is ongoing with results expected in the first quarter of 2021. This trial is being conducted at approximately 60 trial sites dispersed across different regions of the United States and multiple countries in Europe. In July 2020, Otonomy provided an update on the statistical analysis plan for the ongoing trial. In response to questions received from the U.S. Food and Drug Administration FDA, Otonomy submitted a revised plan that uses the Negative Binomial model for primary analysis of the daily vertigo count data reported by patients. We believe that the Negative Binomial model provides the best fit of the OTIVIDEX clinical data based on the Phase 2b trial, AVERTS-2 Phase 3 trial, and integrated dataset from both trials. The Negative Binomial model also provides increased power to detect a treatment benefit enabling us to reduce the target enrollment to 142 patients while maintaining more than 90 power. We expect to complete patient enrollment during the third quarter of 2020 and announce results in the first quarter of 2021. OTO-413 Phase 12 clinical trial in hearing loss: patient enrollment is ongoing with results expected in the fourth quarter of 2020. This is an ascending single dose safety and exploratory efficacy study for OTO-413, a sustained exposure formulation of brain-derived neurotrophic factor BDNF. We have successfully escalated through three dose levels totaling 24 patients and have nearly completed enrollment of patients in the high dose cohort. We expect to enroll approximately 16 patients in this cohort, randomized 3:1 for a single intratympanic injection of OTO-413 or placebo. Patients enrolled in this trial have a speech-in-noise hearing deficit measured at baseline and can have normal up to moderately-severe hearing loss by conventional testing. Following treatment, patients undergo repeated testing for safety and exploratory efficacy over 3 months. We expect to announce results from this trial in the fourth quarter of 2020. GJB2 gene therapy program: preclinical results support selection of product candidate. Otonomy and Applied Genetic Technologies Corporation AGTC are collaborating to co-develop and co-commercialize an AAV-based gene therapy to restore hearing in patients with hearing loss caused by a mutation in the gap junction beta-2 GJB2 gene -- the most common cause of congenital hearing loss. Preclinical results presented at the American Society of Gene Cell Therapy ASGCT meeting in May 2020 demonstrated that a gene of interest can be expressed in support cells of the cochlea, which are the relevant target cells for treating GJB2 deficiency, using novel and proprietary AAV capsids. Also, consistent gene expression was observed for at least 12 weeks following a single local administration. These results supported selection of the product candidate for further development. OTO-510: preclinical data presented for a novel and proprietary class of otoprotectant agents. Cisplatin is a potent chemotherapeutic agent that is widely used to treat a variety of cancers in adults and children, however, it is commonly associated with severe adverse effects including cisplatin-induced hearing loss CIHL. Otonomy has presented preclinical results demonstrating varying degrees of otoprotection against CIHL for several classes of therapeutic agents. In particular, a novel class of agents that potently binds to cisplatin demonstrated greater otoprotection than anti-oxidant and anti-apoptotic molecules, and increased potency relative to other molecules currently in development. OTO-6XX: exclusive license completed for novel hearing loss compound. In July 2020, Otonomy entered into an exclusive license agreement with KYORIN Pharmaceutical Co., Ltd. Kyorin that provides Otonomy with exclusive worldwide rights to develop, manufacture and commercialize a novel compound for the treatment of sensorineural hearing loss. Under the terms of the agreement, Otonomy will make an upfront payment to Kyorin as well as success-based milestone payments and pay a royalty on worldwide net sales. Otonomy is formulating the patent-protected compound utilizing the companys proprietary technology to provide sustained drug exposure in the inner ear following a single local administration. The OTO-6XX program is targeting hair cell regeneration for the treatment of severe hearing loss. OTIPRIO: co-promotion partnership initiated with ALK-Abelló, Inc. ALK. In June 2020, Otonomy entered a co-promotion agreement that provides ALK with an exclusive right to promote OTIPRIO for acute otitis externa AOE to office-based health care professionals in the United States including ear, nose and throat ENT physicians, pediatricians and primary care physicians. During the multi-year agreement, Otonomy will receive co-promotion fees and reimbursement of a proportion of product support costs while also retaining a share of adjusted gross profits from the sale of OTIPRIO for use in AOE.Second Quarter Financial Highlights Cash Position: Cash, cash equivalents, and short-term investments totaled 41.1 million as of June 30, 2020, compared to 60.7 million as of December 31, 2019. In July 2020, Otonomy completed an underwritten public offering of 17,275,000 shares of its common stock, which includes the underwriters full exercise of their option to purchase additional shares and pre-funded warrants to purchase up to 4,000,000 shares of its common stock, for total gross proceeds of approximately 69.1 million, before deducting underwriting discounts and commissions and other offering expenses payable by Otonomy. All of the securities were sold by Otonomy. Long-term Debt: Otonomy obtained a 15 million term loan from Oxford Finance LLC in December 2018. In July 2020, the terms of the loan were amended to extend the interest-only repayment period from 24 months to 36 months, followed by 23 months of amortization. Operating Expenses: GAAP operating expenses were 10.6 million for the second quarter of 2020, compared to 11.8 million for the second quarter of 2019. Non-GAAP operating expenses, which exclude stock-based compensation, were 9.1 million for the second quarter of 2020, compared to 10.6 million for the second quarter of 2019. Research and Development Expenses: GAAP research and development RD expenses for the second quarter of 2020 were 6.9 million, compared to 8.9 million for the second quarter of 2019. The decrease for the quarter was primarily due to reduced third-party development costs that were partially offset by increased compensation expense. 