Benzinga | May 14, 2021 02:59PM EDT

Otonomy's OTO-825 Gene Therapy Can Restore Meaningful Hearing Function, Animal Study Shows

* Otonomy Inc (NASDAQ: OTIC) may have hit a snag with the development of its lead ear disorder candidate Otividex. Still, the company is trumpeting an early win for a gene therapy designed to treat congenital hearing loss.

* The drug candidate, dubbed OTO-825, reduced hearing loss and repaired structural damage in the inner ear in two mouse models of genetically driven hearing deficiency. Otonomy and its partner Applied Genetic Technologies Corporation (NASDAQ: AGTC) reported the data at the American Society of Gene & Cell Therapy annual meeting.

* The OTO-825 news came on the heels of the phase 3 failure of Otonomy's former lead candidate Otividex to treat the inner ear condition M?ni?re's disease.

* Based on the encouraging results, the companies are preparing an FDA application to start a first-in-human clinical trial.

* Otonomy tested OTO-825 in two different mouse models with partially crippled GJB2 to mimic severe and intermediate hearing loss in humans.

* According to the presentation, one injection administered into the inner ears of the mice improved the animals' hearing function and the organ's structure.

* There are three rows of outer hair cells in a normal mouse and a single row of inner hair cells in the cochlea. These are damaged or missing in the genetically modified mice with dysfunctional GJB2. But OTO-825 restored those structures, a showing that was consistent with the hearing function improvement.

* Price Action: OTIC shares are up 2.14% at $2.15, and AGTC shares are up 5.7% at $3.88 during the market session on the last check Friday.