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Otonomy's ear disease drug fails key trial, shares nosedive
[BENGALURU] US drugmaker Otonomy said on Wednesday it would stop developing its drug to treat Meniere's disease, a chronic, progressive disorder of the inner ear, after it failed a late-stage trial.
Shares of Otonomy plummeted 75 per cent to US$5.20 in premarket trading following the news.
Meniere's typically affects one ear, causing vertigo, a persistent ringing in the ear, and ultimately, permanent loss of hearing.
The disease affects about 600,000 Americans.
The US Food and Drug Administration has not approved any specific drug for Meniere's, according to Otonomy.
The company's drug, Otividex, which is injected into the ear, missed the trial's main goal of significantly reducing the number and severity of vertigo episodes over a three-month period when compared with a placebo.
The drug also missed the study's secondary goals, Otonomy said.
Based on the results, the company said it was suspending development of Otividex, including its ongoing European trial for Meniere's disease.
Otonomy also withdrew its operating costs forecast for 2017, pending an internal review of its product pipeline.
The San Diego-based company had previously expected adjusted operating expenses of US$80 million to US$85 million this year.