Biotech Movers: OncoSec Medical Incorporated (NASDAQ:ONCS) and Otonomy, Inc. (NASDAQ:OTIC)


We are closing in on the final two days of the week in the biotechnology space and what a week we have had so far. With a whole host of fresh inputs moving price throughout the first 72 hours of the week, plenty of companies are moving and it looks as though there is plenty of volatility still to come. Here is a look at two of the biggest movers during the session on Wednesday with an analysis of what we expect to happen in each moving forward and as the week matures to a close.

The two companies in our crosshairs right now are OncoSec Medical Incorporated (NASDAQ:ONCS) and Otonomy, Inc. (NASDAQ:OTIC).

So, let’s kick things off with OncoSec.

On Wednesday, this company put out data from a trial of one of its lead development assets and, on the back of the news, is drawing a considerable amount of bullish speculative volume towards its stock. The trial in question was a phase 2 study investigating an asset called ImmunoPulse IL-12, which the company is trying to get approved as a viable treatment option for patients diagnosed with metastatic melanoma.

This is a population with very little in terms of options once the standard of care treatment in the space has already failed and with its ImmunoPulse IL-12 asset, OncoSec is trying to get a fresh treatment option on shelves and give these patients an alternative designed to increase survival.

The trial investigated the asset in question when combined with an already approved oncology drug called pembrolizumab. The idea is that many patients don’t respond to pembrolizumab treatment because their tumor macroenvironment isn’t particularly conducive to doing so. By treating the patients with the ImmunoPulse IL-12 therapy ahead of pembrolizumab treatment, the company is trying to turn the tumor from what it refers to as “cold” to “hot”, meaning that it should respond better to the pembrolizumab than it might otherwise have done.

And this is what the just completed phase II trial was designed to demonstrate.

As per the numbers, the data demonstrated a 57% progression free survival (PFS) rate at 15 months with 100% (11/11) duration of response and median PFS not yet reached. This follows some previously reported data that demonstrated a best overall response rate (BORR) of 50% (41% complete response rate).

In other words, it looks as though the combination serves to dramatically improve a patient’s chances of response as compared to treatment with standard of care alone.

The next stage is to carry this combination into a phase 3 study and the data collected to-date suggests that said study could be a winner for the company. Markets are responding to this news and the anticipation of future success as they might be expected to, with the company trading up by about 60% during the session on Wednesday.

We expect OncoSec to continue to appreciate as the week matures to a close.

Moving on, let’s look at Otonomy.

Just as with OncoSec, Otonomy is running on some positive trial data. The company reported after hours on Wednesday that data from a previously completed trial of one of its lead development assets, a drug called Otividex, which Otonomy is investigating as a potential therapy for a condition called Ménière’s disease, had pointed towards efficacy.

This is a bit of a strange situation.

The company previously reported that the trial had failed to hit both its primary and secondary endpoints in this target indication and, alongside the announcing of this failure, subsequently announced that it intended to halt all development activity associated with the asset.

Fast forward a few months and it now seems as though the extended analysis of the data has proven the initial analysis invalid. Otonomy just reported that the clinical trial in question achieved its primary endpoint of count of definitive vertigo days (DVD) by Poisson Regression analysis in month 3 vs. placebo (p value = 0.029) based on analysis of all 174 patients enrolled in the trial.

That is pretty strong data and it suggests she was that the program is back on track, which, in turn, points towards a near-term pivotal trial initiation. Management has said it wants to sit down with the FDA ahead of any such initiation so we are looking to the outcome of this meeting as a near-term catalyst for the company.

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