Otonomy Inc (NASDAQ: OTIC) is having an overwhelmingly strong day in the market today, nearly doubling in value at the moment. The reason is a good one, too. Not only did the company report its most recent quarterly results, beating expectations, it also announced that a clinical trial has met its primary endpoint. Today, we’ll talk about the news that was released, what we’re seeing from the stock as a result, and what we’ll be watching for ahead.
OTIC Reports Quarterly Results
As mentioned above, Otonomy is having a strong day in the market today, partly as a result of their strong earnings report. Here’s what we saw from the report:
- Loss – In terms of the loss generated, OTIC did overwhelmingly well. During the quarter, analysts expected that the company would generate a loss of $0.76 per share. However, the company actually reported a loss in the amount of $0.69 per share, blowing away expectations.
- The Books – The company also said that, on the books, cash equivalents and short-term investments totaled $134.3 million at the end of the quarter. This compares to $196.4 million on the books at the end of the previous fiscal year.
The Big News
While earnings proved to be overwhelmingly positive, that isn’t the only reason that OTIC is doing well in the market today. The company also announced clinical results from its AVERTS-2 trial of Otividex in patients with Ménière’s disease. According to the release, the study met its primary efficacy endpoint. As a result, OTIC intends to review the results with the FDA and discuss clinical requirements for registration of Otividex for patients with Ménière’s disease.
The primary endpoint was for count of definitive vertigo days by Poisson Regression analysis in Month 3 for Otiovidex versus placebo based on the analysis of 174 enrolled patients in the trial. Otonomy said that the Otividex group demonstrated a 6.2 day reduction in the mean reported number of DVD from baseline to month 3 as well as a 2.5 day mean difference between Otividex and placebo in 3 months. For those who completed daily diaries through a 3-month period, there was a 68% reduction in vertigo frequency from baseline to Month 3 in the Otividex group versus 40% for the placebo group. In a statement, David A. Weber, Ph.D., President and CEO at OTIC, had the following to offer:
“The success of the AVERTS-2 trial clearly demonstrates the treatment benefit of OTIVIDEX in patients with Ménière’s disease, and these results are consistent with our expectations based on the Phase 2b trial… We will complete analysis of this trial and prepare for discussions with the FDA which we expect to occur during the first quarter of 2018. We will also further assess the AVERTS-1 trial to identify factors that might explain the different outcome in that trial and inform the design of our clinical program to support an NDA filing.”
How The Stock Reacted To The News
As we’ve come to expect, when publicly-traded companies release positive news, we tend to see gains in the values of the stocks that represent them. That’s exactly what we’re seeing from OTIC today as the stock skyrockets on the news. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (9:51), OTIC is trading at $5.40 per share after a gain of $2.60 per share (92.86%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on OTIC. In particular, we’re going to continue following the story surrounding Otividex, as the treatment seems to be overwhelmingly promising. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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