San Diego biotech Otonomy filed Friday to raise up to $86 million in an initial public offering, just a few days after releasing positive Phase 3 data for its ear drug AuriPro.
AuriPro was tested on children from 6 months to 17 years old undergoing ear tube placement surgery. The drug is a sustained-exposure formulation of the antibiotic ciprofloxacin. It’s intended to reduce complications after the procedure. Success in the two Phase 3 trials was measured by the proportion of treatment failures. That’s defined as the presence of drainage or the need for”rescue” therapy with other antibiotics reserved for more difficult cases.
Otonomy raised $49 million from venture capital investors this spring. In September, the company raised $45.9 million.
The company’s prospectus said Otonomy plans to list under Nasdaq under the ticker OTIC.
As of March 31, Otonomy had $31.1 million of cash on hand and $7.0 million available in credit, according to the prospectus. The company had 31 full-time employees. The company estimates that more than 50 million people in the U.S. are affected by ear disorders, and about 20 million seek treatment for common conditions such as ear infections, balance disorders, tinnitus and hearing loss, according to the prospectus.
“As a result, the existing market for treatments is significant and there also remains a large population of untreated patients,” the prospectus stated.
Otonomy was founded in 2008 by San Diego-based Avalon Ventures, which specializes in life science investment. The founders were Avalon partner Jay Lichter, who came down with an ear disorder that led to the company’s formation, and Dr. Jeffrey Harris, division chief of otolaryngology at UCSD Health System.
Lichter’s experience led him to investigate the market for middle-ear and inner-ear treatments. He found that the market wasn’t adequately served, in part because of the difficulty in drug delivery. Otonomy’s solution was a drug formulation technology that provides extended action from one administration.
“Our technology utilizes a thermosensitive polymer, which transitions from a liquid to a gel at body temperature,” the prospectus states. “The polymer is combined with drug microparticles to create a suspension that is retained in the middle ear cavity for an extended period of time. This prolonged residence time provides high and sustained drug exposure in the middle and inner ear.”
Besides AuriPro, the company’s other drugs in development include OTO-104, a sustained-exposure steroid for inner ear disorders, including Ménière’s disease, the ailment that had afflicted Avalon’s Lichter. Ménière’s disease causes symptoms including vertigo, tinnitus and fluctuating hearing loss.
Another drug, OTO-311, is a sustained-exposure formulation of gacyclidine, used for tinnitus, or ringing in the ears.