Otonomy mid-stage study with OTO-104 disappoints

US ear disease and disorder specialist Otonomy (Nasdaq: OTIC) has announced disappointing top-line results from its Phase IIb trial evaluating OTO-104 in patients with unilateral Ménière's disease.

The company's shares fell 16% to $26.00 in extended trading on Thursday. Analysts at Cowen & Co said last week that the drug could be a worldwide market opportunity of $1 billion. The stock, which was listed on the Nasdaq last august, has dropped to nearly a six-month low.

The primary endpoint of the trial was reduction in vertigo frequency during Month 3 following treatment compared to a one month baseline period. In the top-line analysis, OTO-104 demonstrated a 61% reduction from baseline in vertigo frequency in Month 3 versus 43% for placebo with a p value of 0.067, which narrowly missed achieving statistical significance. In addition to Month 3, a similar positive trend was also observed during Month 2 following treatment.

“Solid basis” to move OTO-104 into Phase III testing

"While the trial narrowly missed achieving statistical significance on the primary endpoint, we believe the clear efficacy trends observed along with the multiple secondary endpoints where statistical significance was achieved provide a solid basis to move OTO-104 forward into Phase III testing," said David Weber, president and chief executive of Otonomy, adding: "We plan to request an End-of-Phase II meeting with the FDA and intend to initiate two parallel Phase III trials in Ménière's disease with the first beginning by the end of 2015."