Shares in Otonomy, Inc. (OTIC) spiked 15% in pre-market trading after the biotech company disclosed statistical data on its vertigo drug Otividex and “positive” trial results from its Tinnitus candidate
Th stock surged to $3.66 in Tuesday’s pre-market trading. The biotech company said that statistical analysis demonstrated positive development of its ongoing Phase 3 clinical trial, which tests Otividex in patients with Meniere’s disease, an inner ear disorder that can cause vertigo and hearing loss.
“We have recently completed an extensive review of the statistical analysis model that we believe best fits the Otividex clinical data, which is characterized by approximately 40% of Otividex-treated patients having no Definitive Vertigo Days (DVD’s) in month 3,” said Otonomy CEO David A. Weber. “The Negative Binomial model also gives us additional power to detect a treatment benefit enabling us to comfortably reduce the target patient enrollment in the ongoing trial from 160 to 142 patients while maintaining more than 90% power.”
Otonomy expects to complete the enrollment of this trial during the third quarter and present the results in the first quarter of 2021.
The biotech company, which is primarily focused on developing treatments for disorders of the ear that disrupt hearing, balance and connection, in a separate statement reported positive top-line results from Phase 1/2 clinical trial of OTO-313 in patients with Tinnitus, which is a perception of noise or ringing in the ears.
Otonomy said that the trial achieved its objectives by demonstrating a positive clinical signal with a favorable safety profile in patients. Given these results, the company intends to advance OTO-313 into full Phase 2 development which may include evaluation of a higher dose and/or retreatment with OTO-313.
While COVID-19 has weighed on the company, pushing shares down 17% this year, analysts are unanimously bullish on the stock resulting in a Strong Buy consensus. The strong bullish sentiment is also reflected in the upbeat $8.8 average price target, which implies a stellar 177% upside potential in the shares in the coming year. (See OTIC stock analysis on TipRanks)
Calling the trial data news “compelling”, Oppenheimer analyst Francois Brisebois reiterated a Buy rating on the stock with a $8 price target, based on a valuation of $6.5/share for US Otividex sales and $1.5/share for cash and technology at end of 2020.
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