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Middle, Inner Ear Drug Developer Raises $100M in IPO

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13 August 2014. Otonomy Inc., a biopharmaceutical company in San Diego developing treatments for disorders of the middle and inner ear, raised $100 million in its initial public offering of stock. The company, trading on the NASDAQ under the symbol OTIC, priced its 6.25 million shares at $16.00.

Otonomy was founded in 2008 by physicians and researchers in otolaryngology — ear, nose, and throat specialists — from University of California at San Diego and biotechnology investors, including Jay Lichter from Avalon Ventures, who developed Ménière’s disease, a chronic inner-ear disorder that affects balance and hearing. The company focuses on treatments for middle and inner ear disorders, which it says are not being adequately met with current therapies.

Inner and middle ear conditions include Ménière’s disease, ear infections, tinnitus (ringing in the ears), and hearing disorders. One reason for the lack of adequate therapies, says the company, is the inner and middle ear anatomical structure, including the eardrum and other membranes, that limits access to areas needing the treatments, or prevents fluid treatments from being retained. In addition, treating middle ear infections with repeated antibiotics, the current standard therapy, runs the risk of developing resistance to the antibiotics.

Otonomy’s technology offers a drug delivery system to overcome these limitations that provide therapeutics directly to affected regions and are retained in the ear for a period of time after a single dose. The system combines drug microparticles in a suspension with a heat-sensitive polymer. The polymer is administered as a liquid injected into the middle ear that at body temperature becomes a gel, which is more readily retained.

The company’s lead product is AuriPro, a formulation of the antibiotic ciprofloxacin to treat bacterial infections associated with middle ear effusion, the build-up of fluid in the middle ear, requiring surgical placement of a tube to equalize the pressure. About one million of these surgeries are performed each year, mainly in children age 5 and younger. Ontonomy says two late-stage clinical trials of AuriPro with children show the treatments achieved their desired outcomes compared to a sham procedure, with regulatory filings for the drug expected soon.

The company has two other drug candidates in development. OTO-104 is a treatment for Ménière’s disease currently being tested in an intermediate-stage study of 140 patients in the U.S. and Canada, with results expected in the first quarter of 2015. OTO-311 is a treatment for tinnitus that reformulates gacyclidine, a drug with neuroprotective properties, into a single-dose treatment. Otonomy expects to file a new drug application for OTO-311 next year.

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Hat tip: Fortune/Term Sheet

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