Otonomy, Inc.
Q4 2020 Earnings Call Transcript

Published: 11 Feb 2021

[Operator:]

Good afternoon, ladies and gentlemen and welcome to the Q4 2020 Financial Results and Business Update Conference Call. I would now like to turn the conference over to your host, Mr. Robert Uhl. Thank you. Sir, please go ahead.

[Robert Uhl:]

Thank you. Good afternoon and welcome to Otonomy’s fourth quarter and full year 2020 financial results and business update conference call. Joining me on the call from Otonomy are Dr. David Weber, President and Chief Executive Officer and Paul Cayer, 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. Such statements include, but are not limited to, statements relating to the timing of results and activity for ongoing clinical trials; statements relating to the use of and expectations regarding the Negative Binomial model for the Phase 3 clinical trial of OTIVIDEX; plans to submit a New Drug Application and regarding launch preparation; expectations regarding design, patient enrollment, initiation and timing of results for planned clinical trials; expectations regarding preclinical programs, including statements regarding development studies and activities, data presentations and development timelines; statements relating to the potential benefits of and activities under the license agreement between Otonomy and Kyorin; expectations regarding Otonomy’s business plans and market opportunity; and expectations regarding cash runway and Otonomy’s ability and resources to support its product pipeline and development activities. Please refer to Otonomy’s filings with the SEC, which are available from the SEC or on the Otonomy website, for information concerning the risk factors that could affect the company.

[David Weber:]

Thank you, Robert. Good afternoon, everyone and thank you for joining us on this call to discuss Otonomy’s business updates as well as financial results for the fourth quarter and full year. 2020 was both a productive and successful year for Otonomy. Key accomplishments included the following. We completed patient enrollment in the Phase 3 trial of OTIVIDEX in Ménière’s disease and are on track to announce results by the end of February. We announced positive clinical results for OTO-313 in tinnitus and are working to initiate a Phase 2 trial this quarter. We announced positive clinical results for OTO-413 in hearing loss and plan to start an expansion of the trial in the second quarter. We expect that results from both the OTO-313 Phase 2 trial and OTO-413 extension study will be available mid-2022. We also advanced our multiple preclinical programs including a gene therapy program for the most common cause, congenital hearing loss. To help fund this broad and rich pipeline, we completed a successful financing that attracted new top tier biotech investors to the company and significantly extended our cash runway. Overall, I am very proud of our accomplishments during 2020 and excited to continue our progress this year, beginning with the OTIVIDEX Phase 3 readout later this month. During this call, I will provide a brief update on our programs and then ask Paul to summarize the financial results. We can then open up the line for any questions. Beginning with the OTIVIDEX Phase 3 trial in Ménière’s disease, we enrolled a total of 149 patients from the United States and Europe, exceeding our target of 142 patients. In November, we announced that a review of the revised statistical analysis plan by the FDA confirmed use of the Negative Binomial model for analysis of the primary endpoint for this trial. We proposed use of the Negative Binomial model, because we believe it provides the best fit of the OTIVIDEX clinical data based on the Phase 2b trial, the AVERTS-2 trial and the integrated dataset from both trials. The final patients in the trial completed their last visit just before the end of December, enabling us to announce results by the end of February. Assuming positive results, we plan to submit a new drug application to the FDA in the third quarter of 2021. Turning to OTO-313 for tinnitus, we have completed our planning for the Phase 2 trial, which is based on the positive Phase 1/2 results we announced last year. This trial will enroll a total of 140 patients with unilateral tinnitus of at least moderate severity as measured by the Tinnitus Functional Index, or TSI. As in the prior trial, where we observed a high correlation between the various metrics and responders, we will also track tinnitus loudness, annoyance, and patient global impression of change. To enrich the study population, the trial will exclude patients with severe hearing loss who we believe are less likely to respond to treatment and we are increasing the minimum TSI score required for entry to improve our ability to see a treatment benefit. We will also expand the patient population eligible for enrollment by increasing the time from tinnitus onset from 6 months to 1 year.

[Paul Cayer:]

Thank you, Dave and good afternoon everyone. Overall, our expenses for 2020 were in line with our financial guidance and our cash balance reflects the successful financing we completed in July. Now, let me briefly recap the financial results from 2020 that are more fully described in today’s earnings release and 10-K filing. In fourth quarter 2020, we reported total non-GAAP operating expenses of $8.5 million, with GAAP operating expenses totaling $10.1 million. The primary adjustment for non-GAAP expenses is exclusion of stock-based compensation. So, this is the financial metric that best approximates our spending level. For the full year 2020, total non-GAAP operating expenses were $36.5 million, with GAAP operating expenses totaling $42.6 million. These expense levels were in line with our financial guidance and demonstrate our ongoing commitment to carefully manage our spend. As of December 31, 2020, we held our cash balance, including cash, cash equivalents, and short-term investments totaling $86.3 million. This compares to $60.7 million for the prior year and reflects the financing we completed in mid-2020 that raised gross proceeds totaling approximately $69 million. The importance of this financing was twofold. First, we are able to strengthen our shareholder base with a number of top tier biotech investors and second, the additional funds extend our cash runway through the next set of catalysts for OTO-313 and OTO-413, putting us in a solid financial position going into the data readout for OTIVIDEX. With that, I will turn the call back over to Dave.

[David Weber:]

Thank you, Paul. Operator, we are now ready for questions.

[Operator:]

Thank you, sir. Our first question is from Ken Cacciatore from Cowen & Company. Your line is open.

[Ken Cacciatore:]

Hey, guys. Good afternoon and congratulations on really broadening out the company and all the progress and all the different plans. It’s really starting to show all the work that’s been done. My first question is on Ménière’s, I know we are getting close now to the data right around the corner, I thought it would be good to just take an opportunity to step back and talk about the disorder itself, the commercial opportunity is kind of best you can frame it and to what extent in terms of sales force side, you think would be appropriate to approach it? So, just trying to get some views kind of early views or thoughts around the commercial opportunity and then maybe also just a discussion you went into it obviously with the change of the statistical plan, but maybe some of the nuance differences with this study or the steps that you took in this study to try to ensure a little bit of a different outcome that you tried to control for the kind of the patients that were entered into the study? And I will leave it at that for right now. Thank you.

[David Weber:]

Sure. Thanks, Ken. Appreciate your participating today. And why don’t I take the second question first and then let Paul address the market opportunity in our commercial planning. So, with regards to the differences of this study to the prior studies, clearly, what we have been able to do here is really learn from the prior work and identify what we think were key drivers in the prior failure of the AVERTS-1 trial, but the success of AVERTS-2 trial. And that was really around careful patient selection, ensuring high-quality Ménière’s patients that were well-known to the clinicians, really choosing high-quality clinical centers, primarily these are academically associated or academically inclined clinical investigators. So, that’s important, because they understand really the importance of careful patient selection as well as the criticality of communication with patients, because obviously, the communication with patients can drive placebo response. And so not only in terms of selection of the clinical sites was that important, but also been in training. So, we undertook extensive training of both investigators and their staff on proper communication to the subjects as well as in even training for patients regarding the nature of clinical trials. We don’t know if the drug works or not and the importance of reporting those symptoms as they experience. I think the final things that are really key here is really tightening up on our inclusion exclusion criteria to ensure that we were really excluding patients who may have syndromes or conditions that are highly similar to Ménière’s, but that are not Ménière’s, things, for example, like vestibular migraine. And so we worked with KOLs to tighten up those criteria. So, these were all very key steps to our approach that we think will show great benefit in the present study that will soon readout.

[Paul Cayer:]

Yes, hi, Ken. It’s Paul jumping in about the market and some initial comments about how we are thinking about the commercial build. So, it’s a very attractive market that has yet to be developed. Having said that, we believe there are over 850,000 patients in the U.S. that have the diagnosis based on health claims data, about a third of them seek treatment each year, that’s quite an opportunity by getting out to patients and letting them know that there is an effective and approved therapy available. We think that, that number will grow on time and expand the market. But even if you just take the third or so that are seeking treatment each year, about a half of them are already treated with steroids, whether it’s high dose oral steroids or repeat injections with the off-label steroid solution. So we are clearly focused on converting ENTs who are the target audience for this from using off-label steroids to using OTIVIDEX, we actually based on the market research, believe that many of them will start to offer that to their patients instead of first line treatment, whereas steroids are currently second line behind diuretics and low salt diet. So, increase the usage of steroids by providing OTIVIDEX, the single administration approved product with robust clinical data and then starting to sort of expand the market. From the commercial build-out, the nice thing is this is a specialist audience about 10,000 ENTs. And within that, it’s actually a smaller set that are the neurotologists and otologists that are the real specialists will be the focus of our initial efforts. So, we will provide more guidance around how we see the commercial build, but we think it can be a very targeted, focused launch really focusing on those high volume existing users, get some good usage and ramp going and then sort of expand from there. And clearly, a lot of what we are going to be working on is on the buy and bill side, to get the J-code to establish good history of reimbursement and to really support providers that way.

[Ken Cacciatore:]

Thanks so much and good luck going into the data.

[David Weber:]

Thank you, Ken.

[Paul Cayer:]

Thanks, Ken.

[Operator:]

Your next question is from Tyler Van Buren from Piper Sandler. Your line is open.

[Tyler Van Buren:]

Hey, there. Good afternoon and congratulations on all the progress. I had a follow-up on the commercial discussion and the things that you just mentioned. I guess can you talk about how easy it is to access these neurotologists and otologists as you look to potentially rollout OTIVIDEX. And for those who are familiar, I guess with the OTIPRIO experience, it would be helpful to maybe compare and contrast how this might be different from OTIPRIO? And then secondarily to that just wanted to hear the latest on CMC and manufacturing, in terms of the scale that you guys could potentially have for OTIVIDEX prior to launch at the end of next year?

[Paul Cayer:]

Yes. So, Dave, if you want, I can take the first part and then throw it back to you for the kind of the second part. So with respect to identifying and targeting, Tyler, I mean, that is the nice thing about this, it’s not a broad set of clinicians that we would have to go after, it is not only the ENTs as I mentioned, but within the ENTs, those otologists and neurotologists, those are – if you look at the data, which we obviously have, those are the routine users of intrahepatic injections for treating the nearest patients. Now, what’s interesting that the market research suggests is that the sort of more general ENT is interested and wants to use that kind of treatment approach, but frankly, the off-label use of liquid storage solutions is not very amenable to broad utilization. They don’t know what formulation to use. They don’t know how much to deliver. They don’t know how often to bring the patient back. None of that has been standardized. And obviously, with single administration OTIVIDEX, we’ve kind of taken all of that uncertainty away and provided not only an approved product, but with that we will provide a lot of support. So we actually think it will be very straightforward to identify that subset of clinicians that not only are routinely using IP injections today, but those that are seeing good volume of Ménière’s disease patients and are ready for a product like OTIVIDEX. So we are kind of anxious to get out now to start to kind of build that awareness. So, was there a second part of the marketing question before going to CMC?

[Tyler Van Buren:]

Yes, I think it was – yes, sorry go ahead.

[Paul Cayer:]

On the OTIPRIO experience, yes, sorry. Yes. I mean, it’s obviously very different. I mean, as you remember, with OTIPRIO, the kind of the challenge with its initial indication was not with ENTs who really liked the profile and I wanted to actually use the product in sort of broadly. But in order to do that, they would have to have the formulary at the hospital approve its use and that’s what took quite a bit of time when we had the sales force in place. So yes, the kind of the challenge with OTIPRIO at least with its initial indication was not with ENT, it was with that access in those facilities. So we bypassed that entirely with OTIVIDEX, because the primary site of care for Ménière’s patients is in the office. And the great thing about the kind of aside from an access standpoint is the intratympanic injection already is reimbursed under an existing CPT code. It’s very straightforward to get the unique J-code for OTIVIDEX. And we will clearly be providing a lot of access support services, not only for those providers, but also for the patients. So, we think it’s a very different situation from OTIPRIO just because of the access.

[David Weber:]

Yes, I mean, Tyler to address your question about CMC manufacturing, as we said, we will be prepared to and anticipate submitting the NDA based on successful results in this clinical trial in the third quarter of this year. And in that it really is only the clinical data from this clinical trial as well as the integrated efficacy and summary that we need to put together. We already have our CMC information and in fact have been preparing for the NDA. And we have completed registration lots. So, I think it’s important that people remember we have already had one successful approval with OTIPRIO and commercial support there and obviously know-how to do this. So with regards to scale, I think again, this is something that we expect no issues with regard to the need to support the product in the market in terms of quantities, because it’s a very small dose that we are giving to individual patients. So, our batch size is very similar to retinal drugs are very small. And so with one batch, we can make a large amount of materials and we have a very nice exploration dating program for this product. So, I think all in all, we are well positioned. And I will just also say we have completed all of our safety work as well with the repeat dosing of OTIVIDEX to support the every 3-month dosing regimen. And so, we look forward to taking the clinical data and submitting the NDA on success in the third quarter.

[Tyler Van Buren:]

Wonderful. Thanks for the thoughts.

[David Weber:]

Thank you, Tyler.

[Operator:]

Your next question is from Oren Livnat from H.C. Wainwright. Your line is open.

[Oren Livnat:]

Thanks guys. I actually have a few. Can you just remind us in this third OTIVIDEX Phase 3, where – how much room for error are you allowing yourselves with the powering with regards to the data you saw in the prior Phase 2b in AVERTS-2? And assuming that’s positive, you mentioned the 3Q NDA filing I don’t remember if you have ever spoken about hopes or expectations for potential priority review given Fast Track designation? And I have a follow-up. Thanks.

[David Weber:]

Okay. Thanks, Oren. Yes, first in terms of the error and what we have allowed ourselves, I think we have taken a conservative approach here. So, when we say that we are 90% powered, we did not hit the – basically try to keep that close to the 90%. And furthermore, we over-enrolled, so we enrolled 149 subjects over the target of 142. So, we think we are in a very good position power wise. And we also think this is also one of the strengths of the Negative Binomial as we have shown the data comparing the Negative Binomial to the Poisson, not only is it highly sensitive, but also it has it’s a very robust statistical test, even over Poisson. So, we think that those coupled together give us a lot of power and a lot of ability to handle this very unique dataset. With regards to priority review, obviously, it is something that FDA looks at following review and acceptance of the NDA, but we clearly have experience with submitting NDA successfully. So, we think we are in a very good position to that and we have been working on the NDA, we are not waiting to – we did not wait to start that work. We were – had been working on the NDA submission while this third trial was going on. Furthermore, I will just remind people that we have Fast Track designation. So that should be favorable for priority review, but again, we will need to submit and wait for the FDA to see if they will accept our request. I will point out that with priority review in third quarter that would put us into the first part of 2022 for commercialization.

[Oren Livnat:]

Right. So I guess on that part if you do get priority review or I guess in case you need to prepare for that positive development, when do you think you are really assuming positive Phase 3, when do you think you are going to start really ramping up the commercial investment?

[David Weber:]

Well, I think we have started working quickly on that. We have already started thinking about our preliminary steps have already started about thinking about the pieces that we need to put in place. And we will start implementing that based on the positive data from this trial. So, I think importantly here, as Paul indicated in his discussion about the market and our approach, this will be very much of a ramp launch. It is not something where we need to bring in, because a large number of people immediately both because we already know our target audience of what we are going to target first, it’s a very limited number of targets initially to build out that reimbursement data and support for the product among KOLs, which we can then expand upon. I think also our work with OTIPRIO has given us a lot of knowledge and capabilities that are already either in-house or that we have through working with other vendors and partners. So, I think we have a lot of potential here to ramp very quickly and it’s not something that we are concerned about. We think we have – are very capable of doing that.

[Oren Livnat:]

Alright. Appreciate it. I will get back in queue.

[David Weber:]

Thanks, Oren.

[Operator:]

Your next question is from Charles Duncan from Cantor Fitzgerald. Your line is open.

[Charles Duncan:]

Super. Afternoon, Dave and Paul. Thanks for taking my question and should you live in interesting times hope things go well. Wanted to ask a question on the Ménière’s study and first, which is call it timing update. I know that it’s weeks, not months. But what is really kind of the driver to the data timing? And more substantively, this may seem like a silly question, but you mentioned positive results. And I guess the question is what do you consider positive results beyond this statistic when you think about response rates versus reduced number of Ménière’s events or days? What kind of effect size are you looking for that based on thought leader discussions would be meaningful to the community?

[David Weber:]

Yes, thanks. Thanks, Charles, for those questions. So with regard to timing, I mean, as with all studies, for registration, there has been a carefully orchestrated process of going through data query and resolution ensuring that all documentation is verified and signed off by the investigator appropriately, bringing down materials at the clinical sites and closing out the clinical sites and then of course ultimately getting to database lock analysis by the statisticians and then obviously at that point then, looking at the results. So that’s been the process that we are going through and why we have – through the excellent work of the investigators, the site staff across the world, as well as our own CRO and clinical team, we have been successful in doing all of that despite the challenges with COVID, so quite impressive work that allows us to meet that goal of by the end of February that we have announced now. So with regards to the positive, well, clearly from an FDA standpoint of statistic, we already have one successful Phase 3 trial, we need one more. And that requirement is statistically significant outcome at 0.05 or less. With regards to the markets and what clinicians and patients are looking for when it comes from them as we have talked with both patients and clinicians, what we routinely hear is that if we can just save them one day of definitive vertigo really, really helps them a lot. So, while these patients maybe experiencing a lot more, it really is any data you can save them is the day they get back. And so the hurdle here is really low in terms of our ability to have a positive treatment effect. That said however, what we have seen from our work, as we’ve shown for both the AVERTS-2 trial and has been also very consistent with the Phase 2b is we see much more than that. What we are seeing on average is 2.5 days of definitive vertigo sphere, but more importantly, I think even more is that it’s a reduction of the vertigo episodes in total and reduction of severity. So, all of those things taken together really provide a robust benefit to these patients. And then I will just remind you that as we look at the responder analysis, 40% of the patients treated with OTIVIDEX across the AVERTS-2 and the Phase 2b trial demonstrated no definitive vertigo episodes in the third month following treatments. So, that’s obviously quite profound in terms of that population and even when we look at the ability to reduce the number of episodes by 50% or even 75% is quite pronounced. So, I think we are very confident in the ability of OTIVIDEX to help these patients and that it’s a robust treatment effect. And again, with that positive result on the statistical outcome, I think the product will fare very well in the marketplace.

[Charles Duncan:]

That’s helpful added color, Dave. Let me just ask you for qualitative perspective on the bring down of this study in terms of investigators adhering to protocol and capturing all the data needed, working with characterized patients? How do you feel maybe even relative to the AVERTS-1 experience or maybe that’s not an easy comparison?

[David Weber:]

Well, I think in terms of – with regards to this trial and the work that the team has done, the investigator, site staff, even patients have been exemplary. It is, I am totally confident in the quality of the study and the bring-down of the study. We had extremely high compliance throughout even through the COVID times when we were initially going into the COVID epidemic we saw very high compliance being retained and I have seen that throughout. And so I think from the standpoint of the documentation, from the standpoint of patient compliance from investigator compliance, I – delighted with what I have seen. I don’t know that I’d want to try to compare across studies. Clearly, this study was much more done not only in the U.S., but in many countries in Europe, during what is a very unusual time for all of us with COVID. And I could not be more proud or impressed by what the group of people involved here have done with this trial. And the compliance that the patients have demonstrated I think speaks to this issue of their unmet need and how significant their unmet need is in terms of looking for therapy that they have that kind of high compliance.

[Charles Duncan:]

Okay, very good. And last question is regarding the filing of the NDA, just to clarify, would you be filing for an indication of treating Ménière’s generally or specifically with one dose or do you think that it won’t be limited at all in terms of re-dosing? And then I guess that that brings up another question, what would you like to do in the future? Would it include re-dosing or do you think that’s not going to be necessary in this setting?

[David Weber:]

Yes, good question. So, with regards to the indication, the indication will be for the treatment of vertigo symptoms of vertigo associated with Ménière’s disease, that is what we are treating is the vertigo. And in terms of the re-dosing what we have done and this within work with the FDA and agreement with them that we conducted our repeat dose safety work, which has all been completed successfully and is ready to be submitted with the NDA to support up to every 3 months of administration. You will recall that in Phase 2b we conducted an additional month of observation and saw that the effect was starting to wear in some patients and so that was the purpose of designing that every 3 months administration. So, that’s what we expect in the label to single use for course of treatment with re-treatment being available every 3 months. We think that patients will really kind of fall into two groups. There will be patients who say, I want to be seen every 3 months in receiving administration, so I can minimize my vertigo symptoms and there will be some patients who say, hey, I will come back when I need to, if I am doing well for a few months and I don’t need it, I will then come back when I have an attack and I need it. So we think that will be the initial type of patient population. So, we think about an average of two administrations per patient per year. Now, we do think as you bring out kind of the future, we are very actually excited about the potential for this product to be able to spare the hearing loss of these patients suffer. I think while these patients are really struggling because of the vertigo and that keeps them from going to work or being with their families. One of the things that they talk about next is the impact on their hearing. As you know, these patients will typically ultimately become deaf in that affected ear. For example, our Founder is now deaf in that ear. And so – and there was always the risk if they can get bilateral Ménière’s, which is very scary for them. So one of the things that has been suggested from the literature is that it maybe possible that with continued treatment and maintaining that treatment that there maybe ability to spare the hearing. And obviously that would be a great way to support that every 3-month dosing. And so this is something that we have actively thought about that is something that we could do post-approval is get into additional work to look at that ability to spare the hearing over a long-term study.

[Charles Duncan:]

Super. Look forward to the data and increased pipeline visibility yet this year. Thanks for taking my questions, Dave.

[David Weber:]

Thank you, Charles.

[Operator:]

Your next question is from Yogesh Dayma of Oppenheimer. Your line is open.

[Yogesh Dayma:]

Hey, thank you. Yogesh here on behalf of Frank. Thanks for taking my question. Just quick one here on tinnitus test in OTC-313, so I am assuming that in next Phase 2 trial you guys are including patients who have little tinnitus or some patients that have considerable tinnitus. So how you – what effort you are making in order to minimize technical floor issue in this trial?

[David Weber:]

Yes. So thanks, Yogi for your questions. So in the Phase 2 what we are doing is taking some of our learnings from the Phase 1/2 trial and having looked at this data and it’s part of the data that you can see in our corporate deck is we have looked at the impact of the incoming Tinnitus Functional Index that is the measure the severity of the tinnitus at baseline. In the initial – in the Phase 1/2 study, patients had to have a 25 or higher score on the TFI that’s out of the 100, which would indicate moderate – and moderate to severe tinnitus. What we are going to do is raise that TFI score for inclusion up. And by doing that, we will go to a little bit more, it will still be moderate, but I’ll call it more of the middle moderate to moderate severe type of patient in their tinnitus. That will give us basically a better ability to not only see a larger treatment impact, but also separating it from placebo. And actually, you can look at our slide deck and look at the slide that we have for the TFI for the total population and then a couple of slides later, we have that same graph now just for patients with a TFI score of 40 and higher and it really illustrates the point I just mentioned of really giving you a very clear and increased response on the improvement in tinnitus for 313 as well as a very clear differentiation from placebo. And so we think that will help with the floor effect. And we believe that, that will also help minimize the placebo effect.

[Yogesh Dayma:]

Perfect. That’s super helpful. Thank you.

[David Weber:]

Thank you.

[Operator:]

We do have a follow-up question from Oren Livnat of H.C. Wainwright. Your line is open.

[Oren Livnat:]

Thanks. Just wanted to touch on the pipeline as well. For 313, can you just again I think I might have missed in the script, you said you are going up to 4 months, but what is the primary observation endpoint?

[David Weber:]

Yes, thanks Oren. The primary endpoint is the same as in the Phase 1/2. So we are going to hold it to the same time points that we used there. Namely, that is the – going to get confused between the 413 and 313.

[Paul Cayer:]

It’s month 1 and 2.

[David Weber:]

Yes, month 1 and 2.

[Oren Livnat:]

Okay. And I think at some point, you were talking about doing bilateral patients like maybe two Phase 2s. And I am just wondering, is that still in the cards? Are you hoping to maybe elucidate the drug effect in this, better, different, enrich patient population before you start pushing the envelope?

[David Weber:]

Yes. I mean, I think first of all, it’s very clear on the unilateral side that we can see the benefit and follow-up quite closely. And so we wanted to get going with the unilateral properly. We are still considering bilateral, but we are trying to get learnings there. I can tell you that KOLs do have – there is a question of the impact you have across both years. And so it is something that we want to do a little bit more work to really understand how best to design that trial. We do think that there is opportunity in bilateral patients for sure for this product. It really more is in regards to how to properly do the study and that’s part of what we are working on with it.

[Oren Livnat:]

Okay. And then just lastly, on 413, I am still little confused how – what is the main difference in this new expanded cohort versus what we saw before? Is this a different dose, a different treatment or is it really just focusing on the narrower set of endpoints? And if the latter, what do you think you are learning that you didn’t already learn before?

[David Weber:]

Yes, I think it was several things with this additional expansion cohort. So first of all, if you recall, we were doing a lot of additional measures. We talked about all the different audio metric measures we were doing, things like middle ear muscle reflex, additional audio metric measurements, a lot of testing, in addition to the speech and noise test, and even there, we had an extensive amount of testing with the speech and noise. And so that was because we all have to remember, this is the first of its kind study that we have had the first in human. And so we are working with our key opinion leaders and expert audiologists, we are learning a lot that has never been, because this has never been done in clinical research before. And so what we are doing here is we are refining what we have learned about what to look at what really shows the ability to see a difference between treated and untreated. And so one of the things that your see that we will have done is narrowed down the measurements that we are doing both in terms of audio metric measures, but also even in terms of the speech and noise testing that we are doing. We will still continue with those three tests. But we were actually looking at different variations in addition to those different tests. So we have now been able to refine that down. The final thing and the reason for the expansion is as we did 16 patients, as you know. And in our comparison in the study with placebo versus treatment and what we want to do is give more patients as well. So, basically get down to more of exactly what we think we are going to be doing in Phase 2, but also get a larger number of patients. That will do two things for us. One, it will further confirm the result that we saw. So give us further confidence that we are seeing that treatment effect and the size of that treatment effect, but also now we have the ability to really power the Phase 2. And that’s really the most important one of why we are doing this is we just feel that it will be better to have a larger patient population in order to size the Phase 2 and ultimately then select which of the speech and noise tests we think should be primary.

[Oren Livnat:]

Okay, that’s very helpful. Appreciate it. Good luck.

[David Weber:]

Thank you, Oren.

[Operator:]

I am showing no further questions at this time. I would now like to turn the conference back to you Dr. Weber.

[David Weber:]

Well, thank you everyone for participating in our call today. Please note that we will be attending the Cowen, the H.C. Wainwright and the Oppenheimer virtual healthcare conferences in March and hope to speak with many of you then. Have a good evening, everyone.

[Operator:]

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. Have a wonderful day. You may all disconnect.