Otonomy, Inc.

preclinical programs, and expectations regarding operating expenses for 2020, cash runway, and autonomy's ability and resources to support its product pipeline and development activities. Please refer to autonomy's filings with the SEC, which are available from the SEC or on the autonomy website for information concerning the risk factors that could affect the company. I will now turn the call over to Dave Weber, President and CEO of Otonomy.

Thank you, Robert. Good afternoon, everyone, and thank you for joining us all to discuss Otonomy's business updates as well as financial results for the third quarter of 2020. We continue to execute on our business plan during the third quarter, including achievement of the following milestones. We completed patient enrollment in the Phase III trial of Otividex in Meniere's disease and are on track for announcing results in the first quarter of 2021. We announced positive Phase I-II clinical results for our OTO 313 program in tinnitus and are now moving into full Phase II development. We completed patient enrollment in our OTO 413 Phase I-II trial in hearing loss and expect to announce results by end of year. We also advanced our multiple preclinical programs that extend our efforts across additional hearing loss pathologies and patient populations. And we completed a successful financing that attracted new top-tier biotech investors to the company and significantly extended our cash runway to support continued advancement of our product pipeline. the broadest and most advanced in the neurotology field. In short, we are doing the things we need to do to drive value creation, and I am very excited about the Otividex and OTO413 clinical catalysts we have coming up. During this call, I'll provide a brief update on our programs and highlight the financial results from the quarter. We can then open up the line for any questions. Beginning with the OTIVID-X phase III trial in Meniere's disease, we completed patient enrollment at the beginning of October and expect results in the first quarter of 2021. We enrolled a total of 149 patients from the United States and Europe, exceeding our target of 142 patients. We appreciate the continued effort by investigators in support of our study completion activities as well as by the final randomized patients working through their three-month observation period following treatment. In July, we provided an update on the statistical analysis plan for this trial. In response to questions received from the FDA regarding use of the generalized Poisson model to analyze the daily vertigo count data reported by patients, we submitted a revised statistical analysis plan that uses a statistical test called the Negative Binomial Model for the primary analysis. After an extensive review, we selected the Negative Binomial Model because we believe it provides the best fit of the OTIVIDEX clinical data based on the Phase IIb trial, the successful AVERTS2 trial, and the integrated data set from both trials. Assuming positive results from this additional Phase III trial, we plan to submit a new drug application to the FDA in the third quarter of 2021. Turning to OTO 313 for tinnitus, we announced positive results from a Phase I-II trial in July. The exploratory efficacy cohort of this trial included 31 evaluable patients with persistent tinnitus of at least moderate severity based on the Tinnitus Functional Index, or TFI, a clinically validated instrument Patients also reported the loudness and annoyance of their tinnitus using daily phone diaries and completed the patient global impression of change, or PGIC. Following a two-week lead-in period, subjects were randomized to a single intratympanic injection of Oto313 or placebo in a one-to-one randomization and then followed for eight weeks. This trial achieved its objectives by demonstrating a positive clinical signal for OTO313 using a TFI responder analysis, good correlation with other endpoint metrics, and a favorable safety profile versus placebo. In particular, 43% of OTO313 patients were responders at both day 29 and day 57, compared to only 13% of placebo patients with statistical significance at p-value of less than 0.05. Furthermore, OTO 313 patients who were TFI responders reported improvements in tinnitus loudness and annoyance levels based on the daily diaries, as well as improvement in the PGIC, with a high correlation coefficient between these various measures. Finally, the trial demonstrated that a single intratempanic injection of Oto313 was well-tolerated, and the incidence of ear-related adverse events was lower than in the placebo group. Based on these results, we are advancing Oto313 into full Phase II development and have submitted a Type C meeting request to review aspects of the Phase II clinical plan with the FDA. Our third clinical stage program is OTO413, a sustained exposure formulation of brain-derived neurotrophic factor, or BDNF, that we are developing for the repair of cochlear synaptopathy. Recent research has identified damage to synaptic connections as the underlying pathology in noise and age-related hearing loss that manifests as speech and noise hearing deficits. Neurotrophic factors, including BDNF, have potential therapeutic effects in the cochlea by promoting the survival of spiral ganglion neurons, increasing neurite outgrowth, and reconnecting neurons with cochlear hair cells after damage. During the third quarter, we completed enrollment in a Phase I-II ascending dose safety and exploratory efficacy study of OTO413 and that enrolled 39 patients with speech and noise hearing deficit, including 15 patients in the high-dose cohort. Each dose cohort was randomized three to one for a single intratempanic injection of OTO413 or placebo, and then followed for three months. As this is the first clinical evaluation of BDNF delivered to the ear, the primary objective is the assessment of safety and tolerability with multiple assessments of hearing function conducted at baseline and during follow-up to evaluate signs of clinical activity. We expect to announce top line results by end of this year for this trial. A brief update now about our three preclinical programs that are focused on different hearing loss pathologies and patient populations. The first of these is our gene therapy collaboration with AGTC that targets GJB2, the most common cause of congenital hearing loss. Patients born with this mutation can have severe to profound deafness in both ears that is identified in screening tests now performed routinely in newborns. We presented preclinical results at conferences earlier this year demonstrating that a gene of interest can be expressed in support cells of the cochlea which are the relevant target cells for treating GJB2 deficiency using novel and proprietary AAV capsids. Also, consistent gene expression was observed for at least 12 weeks following a single local administration. These results supported selection of the product candidate for further development. We are very excited about this program and will provide additional information about the timeline in the coming months. We also presented data earlier this year related to our OTO 510 program targeting otoprotection for patients at risk for cisplatin-induced hearing loss, or CIHL. Cisplatin is a potent chemotherapeutic agent that is widely used to treat a variety of cancers in adults and children. Unfortunately, it is also commonly associated with severe adverse effects, including chronic Cisplatin-induced hearing loss that is progressive, bilateral, and irreversible. We have identified a novel class of agents that potently bind to cisplatin and provide greater otoprotection in preclinical models than known antioxidant and anti-apoptotic molecules and increased potency relative to other cisplatin-binding molecules currently in clinical development. These results highlight the therapeutic potential of our locally delivered OTO 510 product candidate to provide superior OTO protection without tumor protection. Our third preclinical program, OTO 6XX, targets hair cell regeneration as an approach to treating patients with severe hearing loss. It is well established that damage to cochlear hair cells through aging, excessive noise, or exposure to ototoxic chemical leads to hearing loss, and that these cells do not regenerate naturally. However, we believe it is possible to regenerate new functional hair cells with drug treatment. In July, we entered an exclusive license agreement with Kirin Pharmaceutical Company, providing us with worldwide rights to develop and commercialize a novel Kirin compound for the treatment of sensory neural hearing loss. This is a very interesting program, which is complementary to our OTO 413 program targeting cochlear synaptopathy. One final program update related to our co-promotion partnership with Alcabello that supports the sales and marketing of Otiprio. We initiated this collaboration in June, focused on acute otitis externa, and recently expanded the effort to include use of Otiprio during ear tube surgery. we will continue to record all product revenues and pay Alcabelo a share of proceeds from sales. During the multi-year deal, Autonomy will also receive co-promotion fees and reimbursement for proportion of product support costs. Now, switching gears, let me now provide a brief summary of the financial results for the third quarter, and please refer to our earnings release in 10-Q for the details. The key takeaways are that we are on track with our spending guidance for the year, which is for non-GAAP expenses of $35 to $38 million and GAAP expenses of $45 to $48 million. Importantly, we finished the quarter with $94.5 million in cash, cash equivalents, and short-term investments, thanks to our continued careful spending and the financing we completed in July that raised gross proceeds of approximately $69 million. This cash balance will fund the company for at least two years and enable us to achieve important milestones for our programs. In closing, we are continuing to execute on our business plan that is focused on the advancement of the broadest pipeline in neurotology. We have clinical stage programs targeting the largest patient populations and market opportunities in the field, including hearing loss, tinnitus, and balance disorders. We look forward to the completion of our Otividex Phase III trial in Meniere's disease next quarter and are ready to move to an NDA filing in the third quarter of 2021 following a successful result. In tinnitus, we are building off the positive Phase I-II results for OTO 313 and advancing the program into full Phase II development. And in hearing loss, we are finishing a Phase I-II trial for OTO 413 the first of our several programs to address multiple hearing loss pathologies and patient populations. I am very excited about the transformational opportunity our clinical catalysts provide for the company over the next few months and look forward to keeping you updated on our progress. Operator, we are now ready for questions.

Thank you, sir. Ladies and gentlemen, if you have a question at this time, please press the star and then the number one key on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, press the pound key. We have a question from the line of Tara Bancroft from Piper Sandler. Your line is open.