Stocks to invest in – What We’re Watching In Biotech For January: Otonomy Inc (OTIC) And TESARO Inc (TSRO)



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It’s going to be a busy month in the biotechnology sector. A number of companies are set to take the data stage, across all shapes and sizes and in all stages of development, and each of these has the potential to inject volatility into the market capitalizations of the companies in question.

Ahead of what’s about to hit press, then, let’s take a look at what’s on the cards, and what we are looking at as drivers in either direction. The companies we’ll look at are Otonomy Inc (NASDAQ:OTIC) and TESARO Inc (NASDAQ:TSRO).

First up then, Otonomy.

Otonomy Inc (NASDAQ:OTIC) is developing a drug called Otiprio, in a host of different indications. The lead, and the one that is the focus of this discussion, is a condition called acute otitis externa (AOE). In patients with this condition, the outer ear is inflamed, and it generally includes inflammation of one or ore of the auricle, external auditory canal and outer surface of the eardrum. It’s incredibly painful in some patients, and there’s no real effective cure for the underlying condition as things stand.

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Physicians will generally prescribe painkillers to deal with the pain, and antibiotics to sort out the infection that causes the inflammation, as current SOC, but there’s a large unmet need for a cure, and that’s what Otonomy Inc (NASDAQ:OTIC) is going after with Otiprio. This trial is targeting adults, but there’s a concurrent pediatric trial ongoing, which is slightly behind in the development process. So it’s a phase III, and data is expected to hit press at some point early January. This was originally slated for late December, and while we’ve not got any confirmation from the company as yet, the assumption is that the data drop has been delayed. We expect it this week or early next, and there’s a double digit potential upside on an endpoint hit.

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Next, TESARO Inc (NASDAQ:TSRO).

Back in June, 2016, TESARO Inc (NASDAQ:TSRO) announced that the FDA had accepted the company’s NDA for its drug Rolapitant IV. The drug is what’s called potent and selective NK-1 receptor antagonist with an extended plasma half-life, and the company is targeting a condition called chemotherapy-induced nausea and vomiting (CINV) with this NDA. That indication doesn’t really need any further detail, although we can point out that it’s a real problem in chemo patients, and the FDA has made a point of trying to rush treatments through that are going to improve the quality of life for patients that (by way of the toxic chemotherapy treatment) are already suffering.

The data that underpins the NDA submission looks pretty strong, deriving from a study of a total 305 patients, and is supported by a flurry of other supportive non-clinical and clinical studies. There’s a good chance that this one will pick up an approval, but as ever, there’s nothing that can be taken for certain in the biotech space. As such, we’re looking at a low double digit gain on the drug picking up approval when it goes in front of the agency. On the other end of the spectrum, were looking at similar, but probably to a slightly higher degree, if the drug gets turned down.

There are also a few other companies worth watching, that didn’t make the cut on this instance, but that we’ll likely address at some point in the near future. Alcobra Ltd (NASDAQ:ADHD) is set to report on its post clinical hold meeting the the FDA next week, so we’ll be watching that to gauge the chances of it getting its ADHD drug to market. Additionally, Agile Therapeutics Inc (NASDAQ:AGRX) is going to put out topline from a phase 3 study of its female contraceptive patch early January. This one picked up a complete response letter in 2013, so the latest data is seeking to put forward an argument as to why the patch can overcome the response.

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Note: This article is written by Mark Collins and originally published at Market Exclusive.

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