This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk02: Good day, and thank you for standing by. Welcome to the second quarter 2022 Autonomy, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Robert Wu with ICR Westwick. The floor is yours.
spk03: Thank you, Carmen, and good afternoon, and welcome to Autonomy's second quarter 2022 financial results and business update conference call. Joining me on the call from Autonomy are Dr. David Weber, President and Chief Executive Officer, and Paul Kerr, Chief Financial and Business Officer. Before I turn the call over to Dr. Weber, I would like to remind you that today's call will include forward-looking statements based on current expectations. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results. 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. Autonomy specifically disclaims any obligation to update any forward-looking statements except as required by law. Now I will turn the call over to Dave Weber, President and CEO of Autonomy.
spk04: Thank you, Robert. Good afternoon, everyone, and thank you for joining us on this call to discuss Autonomy's recent business updates as well as our financial results for the second quarter. The key message from this update is that we continue to execute well on our operational plan. Most importantly, we are on track with our announcement of Phase II tinnitus results for OTO 313 in August. We have also completed patient enrollment in the safety evaluation of higher and bilateral dosing of OTO 313. and have completed patient enrollment for the evaluation of higher dosing of OTO 413 in hearing loss patients. I'll briefly review these activities, provide a summary of our financial results for the quarter, and then we can open up the call for any questions. Beginning with the OTO 313 program for tinnitus, we're excited to be approaching the availability of phase two results in the next month. As a reminder, We randomized 153 patients with persistent unilateral tinnitus of at least moderate severity. This was above our target enrollment of 140 patients. Patients were randomized one-to-one to a single intratempanic injection of 0.32 milligram Oto313 or placebo and followed for four months. The primary endpoint is the same as reported for the successful Phase I-II trial. a responder analysis based on the proportion of patients who report a clinically meaningful improvement in the Tinnitus Functional Index, or TFI, from baseline to months one and two following treatment. To assess durability of the OTO313 treatment effect, we extended the follow-up period out to four months, and we will have data for all time points to report in August. All patients have completed their study visits, and I can report that we had excellent compliance in the trial, with completion of the TFI exceeding 98% across all randomized subjects and visits. In parallel, with completing the Phase II trial, we have also fully enrolled several study cohorts to evaluate the safety of bilateral as well as higher dosing for OTO313. This effort is important for the program since bilateral patients comprise approximately 50% of the tinnitus population, and the higher dose we're evaluating is 0.64 milligrams, twice the dose used in the Phase I-II and Phase II trials. As planned, we enrolled 12 tinnitus patients randomized 3-to-1 to Oto313 or placebo in each of the three dose cohorts, 0.6.4 milligram unilateral, 0.32 milligram bilateral, and then after a safety review of the first two cohorts, 0.64 milligrams bilateral. While this is primarily a safety evaluation with a broader enrollment criteria than in our Phase II trial, we will have a TFI assessment one month after dosing to look for potential differences in response from baseline versus placebo. We expect top line results from these cohorts in the third quarter of 2022. This data, together with the phase two results, are expected to support an end of phase two meeting with the FDA and inform the design of the phase three clinical program planned to start in the first half of 2023. Moving to our next program, OTO 413 for hearing loss, I summarize the positive results from our phase two A trial during our last quarterly call. This trial corroborated findings in the previous study, demonstrating that a single intratempanic injection of 0.3 milligram Oto413 provided clinically meaningful treatment benefit versus placebo across multiple speech and noise hearing tests, as well as the patient global impression of change at consecutive time points of day 57 and day 85. In particular, we were pleased to see a clear signal with the words and noise test which is our preferred test because it is well regarded by audiologists and extensively validated in hearing loss patients. 40% of OTO 413 subjects demonstrated a clinically meaningful improvement at both day 57 and day 85 with the WIN test versus 0% for placebo. Another important attribute of this test is its ability to generate a speech intelligibility curve for each patient at each time point. The case studies that we have included in our corporate slide deck provide a nice demonstration of the hearing improvement following a single treatment with 0.3 milligrams of Oto 413. Similar to our approach with Oto 313, we have also been evaluating higher doses for Oto 413. In this case, we are conducting full clinical evaluations of two higher doses, 0.75 milligram and 1.5 milligram, which equate to 2.5 and 5 times the dose used in the Phase IIa trial. We have completed enrollment of 19 patients in each of these dose cohorts, randomized 2 to 1 to OTO413 or placebo. Patient enrollment criteria, the three-month follow-up period, and endpoints are all the same as the Phase IIa trial. We expect to have results from these higher-dose cohorts in the fourth quarter of 2022, which will support our initiation of a dose-ranging Phase II efficacy trial planned to start in the first quarter of 2023. Our third development program is OTO825, a gene therapy targeting GJB2, which is 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. Preclinical proof of concept results for the OTO825 demonstrate that a single administration of OTO825 rescues hearing loss and cochlear damage in two preclinical models representing a range of hearing loss severity caused by GJB2 deficiency. We have completed a pre-IND meeting with the FDA that provided guidance regarding nonclinical study design, manufacturing requirements, and clinical trial considerations and have incorporated this feedback into our IND enabling program. These activities are ongoing and we expect to file an IND in the first half of 2023. Our remaining two programs are OTO 510, an OTO protective for patients at risk for cisplatin-induced hearing loss, and OTO 6XX, a potential treatment for patients with severe hearing loss. Preclinical development continues on both of these programs. In summary, we are making good progress in advancing our multiple clinical programs for treating hearing loss and tinnitus, which represent large untapped markets with significant unmet medical need. We are looking forward to our Phase 2 tentative results for OTO 313 in August. Additionally, we have clinical readouts for higher and bilateral dosing for OTO 313 expected in the third quarter and results from evaluation of higher dosing of OTO 413 in the fourth quarter. These multiple readouts will inform our next steps for both programs which are expected to include initiation of a dose-ranging Phase II efficacy trial for OTO 413 in the first quarter of 2023 and initiation of the Phase III program for OTO 313 in the first half of 2023. Finally, a brief update on our financials. We are on track with our spending guidance for 2022, which is GAAP operating expenses of $52 to $54 million and non-GAAP expenses of $42 to $44 million. For the second quarter, we reported GAAP operating expenses totaling $12.8 million and non-GAAP expenses of $11 million. The adjustment for non-GAAP expenses is the exclusion of stock-based compensation. From a cash perspective, we finished the second quarter with a cash balance including cash, cash equivalents, and short-term investments of $53.1 million. We expect that this current cash balance will fund the company through our multiple upcoming clinical readouts. Operator, we are now ready for questions.
spk02: Thank you. And as a reminder, to ask a question, simply press star 1 on your telephone. Sorry, star 1 1 on your telephone. One moment for our first question. Our first question is from Ken Cashator with a call. Please go ahead.
spk07: Hey, Dave and Paul. Real good luck ahead of all this important data disclosures. Dave, maybe ahead of 313, can you just remind us the steps that you all took to try to minimize the placebo response in this study? And then maybe either you or Paul can talk about the tinnitus market opportunity. Just a review of it would be fantastic. Thanks so much.
spk04: Okay. Thanks, Ken, and I appreciate that. the questions here. So yes, in terms of minimizing the placebo response, several steps that we have taken. First of all, I think it's important that it is a one-to-one randomization. That does help based on historically looking at literature on placebo response. When you have more than two arms, the more arms you have tend to cause more placebo response. Additionally, it's randomized one-to-one. We did increase the level of severity, which we also think will help with the placebo response. So patients are into more of a higher up in the moderate severe level of disease, which we think will help on the placebo. I think the other things that are important for placebo are both the endpoints that we're looking at. The TFI is a 25-point questionnaire. So it's not a simple question or single question. It really is a questionnaire that they have to answer on each of their study visits. And so that really provides, I think, a nice control on placebo response. In addition, they have other endpoints, as we know, the loudness and annoyance that are done on daily, and then the patient global impression of change. And then I think the final thing that really helps in terms of addressing placebo response is the multiple time points required to demonstrate that improvement in their tinnitus, that is, that we require improvements at both month one and at month two. So consecutive time points have to demonstrate that clinically meaningful level of improvement. So I think all of those are key factors in helping to manage the placebo response, and obviously we're looking forward to the results of the study. With regards to the market, why don't I turn that over to Paul and let Paul address that question.
spk05: Yeah, thanks, Dave, and thanks for the question, Ken. we have a slide in our slide deck, so I'll just make some comments referencing that if folks want to go and take a look at that after the call. It's a large market. About 10% of people in the U.S. are affected by tinnitus and about a quarter of those, so 2-3% of the adult population rate their tinnitus as sort of moderate to severe. The level of disability these patients have is pretty significant. As you can imagine, if you had a a loud noise, roaring, buzzing, humming that was always on, it would be impactful not only when you're trying to sleep or concentrate in a quiet room, but just going about your daily life. And so the level of impact these patients have is pretty significant. And unfortunately, there really isn't much to help that. The approaches that are used today are basically coping mechanisms, whether it's a white noise machine, hearing aids will be tried, but it doesn't actually work for many patients. And then things like cognitive behavioral training that basically just helps the patient deal with it rather than actually providing an underlying treatment. So 313, we're excited about it because it's actually disease-modifying therapy, and that's what patients and physicians really want. In terms of the other parts of the commercial opportunity, we think it fits very nicely into office-based treatment. As a physician-administered drug, we'll let it fit in under the buy-and-bill model. There's already a CPT code for the intratepanic injection itself. And so assuming we get the product to market, then we would apply for a J code. The product would be covered under that. So just to sum up, a large patient population, significant improvement disease burden associated, nothing that really is disease modifying or helping the underlying level of severity in these patients and sort of wide open commercial opportunity. And we think that the market opportunity based upon third party research is over a billion dollars here in the U.S. alone. Thanks for the question, Ken. Thank you.
spk02: Thank you. One moment for our next question.
spk01: Our next question comes from Christopher Raymond with Piper Sandler.
spk02: Please go ahead.
spk06: Hey, thanks, guys. Just on 413, just on the timeline, you're guiding now to initiation of that dose-ranging Phase II in the first quarter. I think the last time you guys guided it was year-end. Can you just maybe walk through that? It's a slight delay, but, you know, maybe... I think I remember you talking about an end-of-Phase I meeting that... you were going to have with FDA, if I'm remembering correctly. Maybe is that driving the delay or is there some other driver just to getting that up and running? Thanks.
spk04: Yeah. Hi, Chris. Thanks. No, I don't believe there's a delay there. I think we were originally, we're actually ahead on that. There was maybe a slight change there in that we did enroll 19 patients versus the original plan of 12 patients. So we did go up on our enrollments. which, of course, for the additional cohorts, then an additional group of patients. So in terms of our timing, I mean, the key focus that we have is to initiate a Phase II program before the end of the year, and I feel like we are on track with that with the timing that we have. And so, you know, I think one of the things that's actually remarkable, and it kind of speaks to the unmet need that Paul was talking about for tinnitus, is that each of our clinical trials has enrolled ahead of schedule, and even when we've increased the number of patients. So even for tinnitus, for example, going from 140 to 153, and that was still ahead of schedule. So I think it's actually quite remarkable.
spk06: Yeah, okay, excellent. Thanks so much, guys.
spk04: Thank you.
spk02: Thank you. One moment for our next question.
spk01: Our next question is from Francois Brisbois with Oppenheimer.
spk02: Please go ahead.
spk09: Hi, guys. Thanks for taking the questions. Just a couple here on my end. Sorry. So in terms of the compliance on the 313, it's been excellent, as you mentioned. Is this surprising maybe where your expectations may be a little more difficult based on maybe the pandemic still kind of never-ending lingering, or any reason to why this compliance might have been so good here?
spk04: Yeah, thanks for the question, Frank. Absolutely. It's this unmet need. I can tell you that not only is the compliance just we saw this in the Phase 1-2 study for the program, and so it wasn't a surprise to us. based on what we've seen there that we're going to have very good compliance here. It still is even above our expectation. I think we were highly confident in having a 90% plus compliance, but 98% compliance is absolutely amazing. And I think ultimately it goes down to the patients. The patients are highly motivated and committed to the study. Now, I will say there are things that we've done to make that very useful for them. For example, in terms of making sure they have access to complete the questionnaires, this was important because of COVID if patients couldn't make it to the clinical center. So we did have ability to manage that. But I think it truly is a testament to the unmet need, really. And I can tell you as well that even when you look at the enrollment, as I mentioned, we were ahead of schedule, over-enrolled our target.
spk09: uh from 140 up to 153 i think it again just speaks to that tremendous number of patients out there with the unmet need okay great and then if i can sneak in another one here the um are you just focused on the responder analysis for this this phase two or is the end number here big enough for for potentially seeing efficacy on the overall population and i guess kind of a two-part question. Has there ever been any precedence here with just responder analysis and tinnitus with the FDA?
spk04: Not with regards to tinnitus. Responder has been utilized for approval of some drugs. I can't go specifically into those, but they're ones that our statisticians are familiar with and regulatory people. But we will be getting a full set of data. So clearly the responder analysis is our primary. Based on the phase one, two, we've carried that forward. But I think what people can expect is a full set of data. If you look at our corporate deck, we provide a good, solid base of data there, both on the overall population as well as on the responder analysis, as well as the secondary endpoints, loudness and annoyance and patient global impression of change. So it will actually be a very large data set. and we will obviously look at it in a variety of different ways. That's all part of our pre-specified statistical analysis plan.
spk09: Okay, and I lied. I apologize. One last one for me. On the 413, in terms of the higher dose that you'll see, I guess two higher doses here in the fourth quarter, is there any You know, there's some look on TFI for 313 in the higher-dose and bilateral, but any sign of efficacy here to expect on the 413 side in the fourth quarter?
spk04: Well, I think that's what we will be looking for. As I mentioned, unlike the 313, where it is a safety evaluation, although we will have TFI at one month, so we will be able to look at the tinnitus, the patients weren't actually randomized to the same inclusion-exclusion criteria that we had in the Phase II for tinnitus. Whereas for 413, it was all kept consistent, so the same inclusion-exclusion criteria and all of the same endpoints. And so we'll be able to look at those patients, again, 19 patients per group. We'll be able to look at that data for efficacy in the case of the 413, which will then inform, of course, what we will do for Phase 2. Okay, great. All right, well, thank you very much. That's it for me. Thank you, Frank. Appreciate it.
spk02: Thank you. And as a reminder, to ask a question, simply press star 1-1 on your telephone. We have a question from the line of Oren Livnat with H.C. Wainwright. Please go ahead.
spk08: Thanks for taking the questions. I have a couple. Just following up on Ken's question about potential placebo response, I mean, obviously that's a crucial variable here. And can you just remind us what the lead, you know, what the sort of total lead-in and screening process was here to sort of get a robust, persistent tinnitus population. And are you able now to give us any sort of color on what type of screen or lead-in exclusions or failures you had such that, you know, you did in fact throw out a lot of patients that might not have been reliable?
spk04: Yeah, thanks, Oren. With regards to placebo and the lead-in time, so it's a two-week lead-in period. Now, patients must have had persistent tinnitus from at least two months of onset. So they've already coming in where we believe that two months will exclude patients who have spontaneously resolving tinnitus. What our research and what's in the literature suggests and work with KOL suggests that usually within the first month. If it's going to spontaneously resolve, it will. And so that two months gives us extra color. And by the time patients are actually done with the lead-in phase, which is two weeks, they're almost into their third month. So you can see that that helps obviously from that standpoint. The other thing that we require is for consistency in the TFI. So these patients are taking the TFI at both their screening visit and then at baseline. And so we're able to look at the consistency of that result. And it is something that we do look at to ensure that there's consistency and not a wide differentiation between the screening and baseline. So we have a very stable disease. And we think that's important as well for screening out maybe patients who are not really responding to the questionnaire appropriately that will help us then address that placebo response as well. And, you know, I think I just point out, remember that there was only one patient that really drove placebo response as we looked at the higher levels of response and clinically meaningfulness in the phase 1, 2. So it was a very stark contrast with just that really one patient driving placebo response there. So obviously this trial will tell us a lot, but I think those steps in the lead-in as well as in the nature of the endpoints themselves And then, of course, again, the multiple time points required to be a responder we think will help us address placebo response.
spk08: And maybe you artfully dodged this portion, but I guess it could help us from a commercial perspective, too, in terms of identifying truly chronic patients. But of that 150-something patients you enrolled, were there many more who screened out because of sort of, you know, waxing and waning nature?
spk04: of their or inconsistent nature of their TFI scores no not really really wasn't a matter of the inconsistency of their scores it really was more of other inclusion exclusion criteria the inconsistency of their scores it really was more of other inclusion exclusion criteria and that would either be the level so the majority were the level of the TFI because we had increased the threshold to have a higher level of moderate severity and and so that was really the number one driver of patients failing inclusion-exclusion was just where their tinnitus was in the scale that we required.
spk08: All right, and I know in the past you've spoken about this study, the phase two for tinnitus being conducted, you know, in the fashion of a potentially registration quality or a pivotal study, so can you just remind us you know, what might you, you know, now, you know, and that could change obviously once you see the data, but what do you think you need to see in the study for it to potentially be registration quality or filable? And I guess as importantly, is that higher dose data crucial for, you know, crucial to, you know, deciding what you do in phase three, you know, if you see better efficacy signal in phase three, are you more likely to just add that as a second dose and have a two-dose phase three, or do you think you'd risk potentially just moving up entirely for a phase three?
spk04: Oh, I don't think I'd risk moving up entirely. I think, I mean, clearly this is an area of significant unmet need. So I think if we see a strong treatment response similar to what we saw in phase one, two, I think it is a totally commercially viable product. with a 40% responder rate. So I think that really the exploration of the higher dose is one that allows us great flexibility. I would not see us jumping to the higher dose alone. If anything, we would include the higher dose in our development program. But I think that all depends on the benefit that we see here with this current dose and whether we can replicate what we saw in Phase I, II. So I think it gives us a lot of of opportunity to look at how we want to proceed based on what we learned from the Phase I-II. And in addition, of course, it covers off the bilateral safety, which will be important for our safety program. So I think together, that information and then going in with the FDA with all of that in hand will be very informative and help us lay out what the program looks like. Just on the current phase two, yes, it is a phase two that we've ran as a fully potential registration program in that it has a statistical analysis plan that has been reviewed by the FDA. Now, at that point, you know, obviously we've not talked about our endpoints with the FDA at this point. That was the plan for end of phase two. So we will need to discuss the endpoints and selection with them. But, of course, I think the FDA recognizes that there's tremendous unmet need here, and I think that with success of the Phase 2, I think it will give us a good approach into the Phase 3 program.
spk08: And just lastly, and pardon me if I should note this, but can you remind us, are there any pre-specified subgroup analyses for this Phase 2?
spk04: Yes, there are. Yes, there are. There are, as you know, we increased the duration of tinnitus. from looking at just up to six months to looking up to one year. So we will be looking at the duration of tinnitus as one of our pre-specified subgroup analysis. All right. It's coming back to me now. Thanks. No problem. There's a lot of studies here, you know, between 413 and 313, there's a lot of data, um, and that we've both collected the data as well as what's coming ahead of us. So we're very excited, but it does, it does, uh, make it complicated to make sure we remember what's what for each of the studies.
spk08: Okay.
spk04: Thanks so much. Thank you, Oren. Appreciate it.
spk02: Thank you. And we have a follow-up.
spk01: One moment, please. Francois, your line is open.
spk09: Okay, yes, sorry. Just in terms of when you were enrolling for 313, just on the bilateral side, can you discuss the 50-50 split with that kind of job with what, you know, from the literatures to how the enrollment went? And just from your, you know, talking to KOLs in the space and your thoughts on it, can you just discuss maybe the sensitivity of the TFI analysis for someone that's bilateral versus unilateral?
spk04: Well, I don't think anyone really knows in a clinical setting. I mean, that's part of what we obviously are doing is really the first ones to apply the TFI to pharmaceutical therapy in these studies. I mean, it has been applied before. I shouldn't say that it hasn't. It has been applied, but in terms of looking rigorously at a unilateral versus bilateral will really be something that we're able to learn from. The enrollment of the 313 bilateral groups went very smoothly. Again, you know, we did that ahead of schedule and largely driven by the fact that there's such large populations, both bilateral and the unilateral. So I think we feel the 50-50 is generally correct. And, you know, I think the TFI being able to look at how the bilateral patients respond on that will be informative for us. You know, I think it is a difficult thing when you're, depending on what we see there, whether the ears respond differently, how that impacts the TFI, which is, of course, why in the Phase II trial we've remained focused on only unilateral patients. It makes it a much cleaner study, we believe, and really being able to look at that efficacy endpoint clearly.
spk09: Okay, great. So if a patient, just to be clear, sorry, the If a patient is bilateral but has mild tinnitus in one ear and then severe in the other ear, would that be eliminated and not allowed because overall it's not moderate to severe? Does it have to be moderate to severe in both ears?
spk04: How does that work? Well, when you're testing bilateral patients, you're only doing the TFI. So the TFI score... is based on whatever they're feeling. So you don't know the interaction between the ears with the TFI. It is what their overall score is, which is what makes it, again, what will be interesting to look at the data and see how it responds and how patients report it. So it is something that is not as clean as in the unilateral patient.
spk09: Perfect. All right. Thank you.
spk04: But that's also why we're looking at those patients more from a safety perspective. as opposed to efficacy in the bilateral patients.
spk09: Understood. Thanks.
spk04: Sure. Thank you, Frank.
spk02: Thank you. And I would now like to turn the conference back to Dave Weber for closing remarks. Yeah.
spk04: Well, thank you, everyone. I appreciate you participating in our call today. We look forward to talking with you soon.
spk02: Thank you for participating.
spk04: We hope you have a good evening. Thank you.
spk02: And this concludes today's conference call. Thank you for participating and you may now disconnect. The conference will begin shortly. To raise your hand during Q&A, you can dial star 11.
Disclaimer