Otonomy Inc. (NASDAQ: OTIC) reported its most recent quarterly results after the markets closed on Wednesday and gave an update on its late-stage trial in patients with Ménière’s disease. Although earnings were fairly positive, this Phase 3 trial was what really skyrocketed shares.

In terms of the third-quarter results, the company reported a net loss of $0.69 per share, compared with the consensus estimate of a net loss of 0.76 per share. The same period last year had a per-share net loss of $0.91.

On the books, Otonomy’s cash, cash equivalents and short-term investments totaled $134.3 million at the end of the quarter, compared with $196.4 million at the end of the previous fiscal year.

Separately, Otonomy announced that its AVERTS-2 Phase 3 clinical trial of Otividex in patients with Ménière’s disease achieved its primary efficacy endpoint. The company plans to review these results with the U.S. Food and Drug Administration (FDA) and discuss clinical requirements for registration of Otividex for patients with Ménière’s disease. The company expects to provide an update from discussions with the FDA during the first quarter of 2018.

A few of the main highlights from the study:

• The clinical trial achieved its primary endpoint of count of definitive vertigo days (DVD) by Poisson Regression analysis in Month 3 for Otividex versus placebo based on analysis of all 174 patients enrolled in the trial.
• The Otividex group demonstrated a 6.2-day reduction in the mean reported number of DVD from baseline to Month 3 with a 2.5-day mean difference between Otividex and placebo in Month 3.
• For subjects who completed daily diaries through Month 3, there was a 68% reduction in vertigo frequency from baseline to Month 3 in the Otividex group versus 40% for placebo.

David A. Weber, Ph.D., president and CEO of Otonomy, commented:

We believe that the continuation of OTIVIDEX development for Ménière’s disease and the advancement of our other programs targeting important unmet medical needs including hearing loss and tinnitus provide an attractive path forward for Otonomy. We intend to use our strong balance sheet, supported by our recent cost reduction actions, to achieve value creation milestones in the development of our pipeline.

Shares of Otonomy closed Wednesday at $2.80, with a consensus analyst price target of $10.67 and a 52-week range of $2.80 to $21.15. Following the release, the stock was up about 107% at $5.80 in early trading indications Thursday.

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