U.S. markets open in 1 hour 56 minutes

Edited Transcript of OTIC earnings conference call or presentation 27-Feb-20 9:30pm GMT

Q4 2019 Otonomy Inc Earnings Call

SAN DIEGO Mar 26, 2020 (Thomson StreetEvents) -- Edited Transcript of Otonomy Inc earnings conference call or presentation Thursday, February 27, 2020 at 9:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* David Allen Weber

Otonomy, Inc. - President, CEO & Director

* Paul E. Cayer

Otonomy, Inc. - Chief Financial & Business Officer

* Robert H. Uhl

Westwicke Partners, LLC - MD

================================================================================

Conference Call Participants

================================================================================

* Esther P. Rajavelu

Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst

* Maria Yonkoski

Cantor Fitzgerald - Analyst

* Stacy Ku

Cowen and Company, LLC, Research Division - Equity Research Associate

* Tara A. Bancroft

Piper Sandler & Co., Research Division - Research Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good afternoon, ladies and gentlemen, and welcome to the Q4 2019 Otonomy, Inc. Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Robert Uhl with Westwicke ICR.

--------------------------------------------------------------------------------

Robert H. Uhl, Westwicke Partners, LLC - MD [2]

--------------------------------------------------------------------------------

Thank you, operator, and good afternoon, and welcome to Otonomy's Fourth Quarter and Full Year 2019 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, the timing of results, patient recruitment and enrollment plans and expectations for, and design and conduct of, the Phase III clinical trial for OTIVIDEX, the Phase I/II clinical trial for OTO-313 and the Phase I/II clinical trial for OTO-413; expectations regarding preclinical development, including, but not limited to, the potential benefits of and activities under the collaboration agreement between AGTC and Otonomy; expectations regarding the benefits, outcomes, market opportunity and value potential of Otonomy's clinical and preclinical programs; expectations regarding funding of clinical development through our 3 clinical trial readouts in 2020; preclinical program advancement and company operations into 2021; and expectations regarding financial guidance, including operating expenses for 2020.

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.

I will now turn the call over to Dave Weber, President and CEO of Otonomy.

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

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 2019.

The key takeaway message from this call is that we have positioned Otonomy for a transformational year in 2020 with 3 clinical trial readouts, including the Phase III trial of OTIVIDEX in Ménière's disease; the Phase II trial of OTO-313 in tinnitus and the Phase I/II trial of OTO-413 in hearing loss. In addition to these clinical-stage programs that address significant patient populations with high disease burden and no FDA-approved drug treatments, we are also advancing multiple preclinical programs, including a gene therapy collaboration targeting congenital hearing loss.

I'm proud of the progress we've made across our pipeline, which is the broadest in the emerging field of neurotology and look forward to providing program updates throughout this catalyst-rich year. In our prepared remarks, I'll review the status of our clinical and preclinical development programs, and Paul will review the financial results and spending guidance for 2020.

It is important to note that our existing capital will fund the company through the 3 clinical readouts this year and into 2021. I'll then provide a brief update regarding our Board of Directors, and we'll open up for any questions.

Beginning with the OTIVIDEX Phase III trial in Ménière's disease, we are continuing to enroll patients and expect that we will announce results by the end of the third quarter of 2020. Our focus is on the recruitment of well-characterized Ménière's patients who meet stringent entry criteria, and the careful management of communication between patients and study site investigator and staff to minimize patient expectation bias. Approximately 3/4 of the clinical site -- of the 60 clinical sites are in Europe, and we expect that these sites will account for a similar proportion of patient enrollment. This is important because the successful AVERTS-2 trial was conducted in Europe.

We have recently provided new data regarding vertigo responder rates from the AVERTS-2 and Phase IIb trials that can be found on Slide 9 of our corporate presentation available on our website. These results show good agreement between the trials with almost 75% of patients reporting at least a halving of definitive vertigo days from baseline to month 3 following a single treatment with OTIVIDEX. Also, roughly 60% of patients had at least a 75% reduction from baseline and approximately 40% of patients had no definitive vertigo days in month 3. Furthermore, OTIVIDEX consistently demonstrated clear separation from placebo that was comparable across the 2 studies.

Just to put these response rates in context, 60% of OTIVIDEX patients went from an average of 9 definitive vertigo days in the month before receiving the single treatment to less than 3 days in month 3, and 40% of OTIVIDEX-treated patients had no definitive vertigo days. We believe that these impressive responder rates, separation from placebo and comparability across 2 independent studies clearly support the treatment benefit of OTIVIDEX for Ménière's disease, and this gives us confidence for a positive outcome in the ongoing Phase III trial.

The next product candidate in our product -- in our clinical development pipeline is OTO-313, a sustained-exposure formulation of the NMDA receptor antagonist gacyclidine in development for the treatment of tinnitus. We successfully completed the initial safety cohorts of the Phase I/II trial and are now enrolling patients in the second cohort, which is the exploratory efficacy part of the study.

For this cohort, we expect to enroll up to 50 tinnitus patients who meet a narrow set of entry criteria, including that the tinnitus be persistent, unilateral, of cochlear origin, within 6 months of onset and at least a moderate level of severity. While these entry criteria are challenging for enrollment, we believe that they are important in order to recruit a homogeneous set of patients who are likely to be responsive to treatment and provide an early assessment of the opportunity for this product.

A number of exploratory efficacy endpoints will be assessed in the Phase II study, including the Tinnitus Functional Index or TFI, which is a validated clinical instrument that measures tinnitus' severity and its impact on patients. Because this is the first efficacy assessment for OTO-313, and there is limited experience in the use of TFI for drug trials, this study is not powered for statistical significance. However, we do expect to be able to demonstrate a clinically relevant improvement in TFI score for patients treated with OTO-313 versus placebo. And we'll be assessing the concordance of TFI changes with other endpoints such as tinnitus loudness and annoyance. Regarding timing, we expect to have top line results to announce by the end of the second quarter of 2020.

Our third clinical-stage program is OTO-413, a sustained exposure formulation of brain-derived neurotrophic factor or BDNF that we are developing for the repair of cochlear synaptopathy. Recent research has identified damage to synaptic connections as the underlying pathology in noise- and age-related hearing loss that manifest as speech- and noise-hearing difficulty. Neurotrophic factors, including BDNF, have potential therapeutic effects in the cochlea, are promoting the survival of spiral ganglion neurons, increasing neurite outgrowth and reconnecting neurons with cochlear hair cells after damage.

In September 2019, we announced the initiation of Phase I/II ascending dose safety and exploratory efficacy study of OTO-413 that will enroll up to 40 patients with speech- and noise-hearing difficulty. Patients will receive a single intratympanic injection of OTO-413 or placebo and be followed for 3 months. A number of efficacy endpoints will be evaluated, including electrophysiological measurements of hearing function and speech- and noise-hearing tests.

Given the design of this trial, the timing to completion and data release is not only determined by enrollment rates and length of study, but also the number of dose escalations that will be evaluated. Since we are continuing to escalate, we are not yet able to refine our previous timing guidance for results that are still expected in the second half of 2020.

In addition to our 3 clinical-stage programs that have readouts in 2020, we continue to advance multiple preclinical development programs addressing different pathologies for hearing loss, treatment and otoprotection. In October 2019, we announced a gene therapy collaboration with AGTC that targets the most common cause of congenital hearing loss. The goal of this program is to develop an AAV-based gene therapy to restore hearing in patients with hearing loss caused by a mutation in the gap junction beta 2 gene, otherwise known as GJB2.

Mutations in this gene are the most common cause of congenital hearing loss, accounting for approximately 30% of all genetic hearing-loss cases. Patients born with this mutation can have severe to profound deafness in both ears that is identified in screening tests now performed routinely in newborns. Collaboration leverages the expertise, technology and capabilities of each partner, allowing each of us to do what we do best.

In January, we made a joint presentation at the Association for Research in Otolaryngology or ARO meeting that provided initial demonstration that a gene of interest can be expressed and support cells of the cochlea, which are the relevant target cells for treating GJB2 deficiency. Furthermore, these studies have defined several novel and proprietary AAV capsids with favorable tropism in gene expression level and support cells compared to previously reported capsids used in the field. Importantly, none of the novel AAV capsids evaluated for further development exhibited signs of cellular toxicity. We look forward to sharing more information about this program in the future.

We also presented data at ARO related to our OTO-510 program targeting otoprotection for risk -- for patients at risk for cisplatin-induced hearing loss or CIHL. Cisplatin is a potent chemotherapeutic agent that is widely used to treat a variety of cancers in adults and children. Unfortunately, it is also commonly associated with severe adverse effects, including CIHL that is progressive, bilateral and irreversible.

At ARO, we presented preclinical results demonstrating varying degrees of otoprotection against CIHL for several different classes of therapeutic agents. In particular, we have identified a novel class of agents that potently binds to cisplatin. Agents from this novel class demonstrated greater preclinical otoprotection than known anti-oxidant and anti-apoptotic molecules and increased potency relative to other cisplatin-binding molecules currently in clinical development. These results highlight the therapeutic potential of our novel otoprotectant approach as the basis for the OTO-510 program for CIHL.

Finally, we continue preclinical development for OTO-6XX, which is our hair cell regeneration program to treat patients with severe hearing loss. Cochlear hair cells play a central role in hearing by converting sound waves into electrical signals that are then transmitted to the brain via auditory nerves. It is well established that damage to hair cells through aging, excessive noise or exposure to ototoxic chemicals leads to hearing loss.

Unfortunately for humans, we cannot naturally regenerate hair cells like nonmammalian species such as birds and chickens. However, it is possible to activate proliferation and transdifferentiation pathways via drug intervention, thereby providing an approach to treat this pathology. We have demonstrated hair cell regeneration with a class of small molecules in a preclinical proof-of-concept and have identified a product candidate for further development. We believe that the OTO-6XX program is complementary to OTO-413. And together, these 2 programs address the key pathologies underlying acquired hearing loss.

In summary, the successful completion of our 3 ongoing clinical trials is our highest priority and greatest focus. In parallel, we continue to advance our preclinical programs because they address important unmet needs in neurotology, leverage our expertise, our technology and resources, and have significant value potential. Importantly, we are conducting all of these activities while carefully managing our spending.

With that, I'll turn the call over to Paul Cayer, our Chief Financial and Business Officer, who will provide a summary of our financial results and guidance.

--------------------------------------------------------------------------------

Paul E. Cayer, Otonomy, Inc. - Chief Financial & Business Officer [4]

--------------------------------------------------------------------------------

Thank you, Dave, and good afternoon, everyone. Overall, our expenses for 2019 were below our financial guidance, and we expect a decrease in spending for 2020 as we complete the 3 clinical trials Dave reviewed. This will enable us to utilize the cash we have on hand to fund operations through the clinical readouts and into 2021.

Now let me briefly recap the financial results from 2019 and guidance that are more fully described in today's earnings release and 10-K filing. As of December 31, 2019, we held a cash balance including cash, cash equivalents and short-term investments totaling $60.7 million. This cash balance includes proceeds from a $15 million term loan that was completed in December of 2018.

In the fourth quarter of 2019, we reported total non-GAAP operating expenses of $10.2 million, with GAAP operating expenses totaling $10.7 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 2019, total non-GAAP operating expenses were $39.6 million, with GAAP operating expenses totaling $44.5 million. Both of these expense levels were lower than our financial guidance, which we had actually reduced in the third quarter. This demonstrates our commitment to carefully manage our spend.

Looking forward, we expect the non-GAAP operating expenses for 2020 will be in the range of $35 million to $38 million, while GAAP operating expenses are expected to total $45 million to $48 million. This spending plan will enable our current cash balance to not only fund operations through the clinical trial completions of 2020, but also extends our cash runway into 2021.

With that, I'll turn the call back over to Dave.

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [5]

--------------------------------------------------------------------------------

Thank you, Paul. Before closing, I would like to briefly mention 2 other updates related to our Board of Directors.

First, I am pleased to announce the appointment of Dr. Ciara Kennedy to the Board, effective March 1, 2020. Dr. Kennedy currently serves as President, Chief Executive Officer and Director of Amplyx Pharmaceuticals, which is a clinical-stage drug developer targeting life-threatening diseases in patients with compromised immune systems. Prior to Amplyx, she served as the Chief Operating Officer at Lumena Pharmaceuticals and then continued as a Vice President at Shire, following its acquisition of Lumena. She previously held several positions at Cypress Bioscience, where she played a key role in the company's FDA approval and launch of Savella for fibromyalgia and managed multiple development programs while at Biogen Idec. Ciara's experience in drug development, operations, patient advocacy and corporate development are all very relevant for Otonomy, and I look forward to working with her.

And second, I would like to express my sincere gratitude and appreciation to Dr. Heather Preston, who has notified the company of her intention to resign from the Board effective February 28, 2020. Dr. Preston joined the Board in 2010 with our first syndicated venture financing when she was a Partner and Managing Director at TPG and has continued to serve as a director even after joining Pivotal bioVenture Partners in 2018. Heather's active participation and thoughtful guidance to the company and its Board throughout the past decade have been greatly appreciated.

In closing, we have positioned Otonomy for a breakout year in 2020. The OTIVIDEX Phase III trial, OTO-313 Phase II trial and OTO-413 Phase I/II trial provide multiple value-creation catalysts for the company, and we are focused on their successful completion. Taken together, our clinical and preclinical programs comprise the broadest and most advanced product pipeline in the emerging field of neurotology, and we have the cash on hand to support their advancement. I look forward to sharing updates with you throughout this exciting year.

Operator, we are now ready for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) And your first question comes from the line of Stacy Ku with Cowen.

--------------------------------------------------------------------------------

Stacy Ku, Cowen and Company, LLC, Research Division - Equity Research Associate [2]

--------------------------------------------------------------------------------

Congratulations on the progress. A few questions. So first, thank you for showing the updated responder analysis for OTIVIDEX. Do you think these results could be leveraged for potentially better managed care positioning, and what are your thoughts regarding the potential labeling for OTIVIDEX? Do you think that you would be able to include this type of responder rate?

Also, could you please frame how OTIVIDEX could be potentially used, any commentary on repeat use? And finally, can you remind us what you're hoping to see for the 313 program in terms of exploratory endpoints, just to better understand whether -- what you're looking for to move the program forward?

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

Thank you, Stacy. First, I think the responder analysis is very strong for this program with OTIVIDEX. We're quite delighted with the 40% of patients following a single treatment with OTIVIDEX having no vertigo definitive days in their third month. That's quite an accomplishment, we feel, and demonstrates what has been already shown in the literature as favorable results with the steroid product.

Additionally, I think when we look overall at the population, of seeing 70-plus percent of the patients treated with OTIVIDEX on a single administration having at least a halving of their episodes, and we know from talking to patients that even a single day spared of these devastating episodes of vertigo are meaningful to them, and we hear the same thing from their caring physicians. So we think the responder analysis is very strong, both in demonstrating the potential for the product in helping patients and clinicians with this significant disease, as well as for the opportunity for the product in the commercial area.

Clearly, we will be looking at responder analysis. It's one of the things that we think is very informative to physicians as they look at the product to guide their patients toward treatment, so we think that is very meaningful.

In terms of repeat use, this is part of -- we've always known that Ménière's is a chronic disorder. Many of these patients may have Ménière's for decades and suffer ongoing bouts of vertigo. And as a result of that, we've supported the product with repeat dose testing for safety in line with the FDA's request, and that is that patients can be treated up to every 3 months. So we have collected that safety data as part of our existing package and will be part of the submission for the NDA upon success with the current Phase III trial that's enrolling.

So I think that we view that patients could have anywhere between 1 to up to 4 administrations of OTIVIDEX per year. And we think there are a significant portion of the patient population that will do that just as a preventive to try to reduce any number of episodes they might otherwise have.

I think your third question is on exploratory endpoints for 313 for tinnitus. So here, we are looking at the TFI as a clinically validated instrument. It is an instrument that we have talked about with the FDA in our pre-IND meeting with them and believe that given its validation, it could serve as a potential primary outcome in registration trials.

For that reason we're gathering information on the TFI, and we will look at that as our primary read in looking at how patients improve with the TFI. But we also have a number of other exploratory endpoints that we're looking at, both in terms of measures of annoyance and loudness and patient global impression of change. And our expectation is to utilize all of those and look at how they correspond to one another in reflecting the patient's improvement, both in terms of reduction of the tinnitus, in terms of loudness but also in terms of their daily function.

--------------------------------------------------------------------------------

Operator [4]

--------------------------------------------------------------------------------

Your next question comes from the line of Tara Bancroft with Piper Sandler.

--------------------------------------------------------------------------------

Tara A. Bancroft, Piper Sandler & Co., Research Division - Research Analyst [5]

--------------------------------------------------------------------------------

So Stacy's questions were pretty comprehensive. So remaining a question that have is for the 510 program, the cisplatin-induced hearing loss. Do you think that there will be any risk for tumor protection? And what are the next steps in developing the preclinical package for this drug and maybe a potential time to get to the clinic here?

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [6]

--------------------------------------------------------------------------------

Okay. Thank you, Tara, and great to have a question on 510 for cisplatin-induced hearing losses, as we feel this is a very important area of unmet need and one that still represents tremendous opportunities for improvement. We think that the current approach that has been investigated by a number of companies in terms of systemic administration of cisplatin-binding agents as a form of otoprotection, runs a number of key risks.

Obviously, it is important that there be no tumor protection from any treatment in our view. And so I think our view is that local administration really makes sense here. And of course, that's where we are quite strong in development of our formulations that provide a sustained exposure from a single administration and the opportunity to do that locally in a confined environment where we're not exposed in the entire systemic system and, thereby, potentially compromising the treatment efficacy of cisplatin or other platinum-based agents. So we think that is a key. In addition, we also look at the mechanism of the drug and its ability to function in that environment. And I apologize, Tara, I missed your second question.

--------------------------------------------------------------------------------

Tara A. Bancroft, Piper Sandler & Co., Research Division - Research Analyst [7]

--------------------------------------------------------------------------------

Yes, I was just wondering more about the steps that you're taking to develop your preclinical package, and maybe some guidance on potential time to get to the clinic with this.

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [8]

--------------------------------------------------------------------------------

Okay. We have not, at this point, given any guidance on timing. It will be something in the future that we will, as we continue with our progress, make note of.

And in terms of our preclinical package, we have, as I mentioned, presented at ARO on one of our preclinical models. We are continuing in the development of this program. We've done a lot of work in both explants of cochleas as well as working with animal models to look at the opportunity for this novel class that we've identified and comparing that extensively against other existing known anti-apoptotic and anti-oxidant molecules for potential comparability and efficacy. And that's where we're very delighted with this class of molecule that we've identified and are looking forward to taking that forward. So we'll be talking more about this as we continue on.

And clearly, one of the things I'll just point out is this is an area where we do have some clinical experience. We've already actually conducted a Phase II trial in a pediatric population. So I think one of the things that we feel good about is once we are advancing into the clinic, we already have the experience of doing this kind of clinical work and feel that will be a real advantage to us as well.

--------------------------------------------------------------------------------

Operator [9]

--------------------------------------------------------------------------------

Your next question comes from the line of Charles Duncan with Cantor Fitzgerald.

--------------------------------------------------------------------------------

Maria Yonkoski, Cantor Fitzgerald - Analyst [10]

--------------------------------------------------------------------------------

This is Maria Yonkoski on for Charles. I just had a question on the 313 program. Tinnitus is often associated with headaches or migraines. Would you say that this is true for the patient population that you're currently enrolling in your ongoing trial? And do you think that long term that this treatment could be used in conjunction with migraine drugs, say, the CGRPs?

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [11]

--------------------------------------------------------------------------------

Yes, I think -- thanks for that question. I think it's -- one of the keys here is that we are very much focused on tinnitus that's associated with cochlear origin. So it's not to say that these patients could not have migraine headaches. But the patient population is very specifically a persistent tinnitus population of cochlear -- of known cochlear origin, which would be things like sensorineural hearing loss, some type of otic trauma or even otic infections such as otitis media.

And as a result of that, I think it's not something that we've really looked at in terms of the migraine. I think it really comes down to the nature of the origin. That said, we're really, in this study, obviously, focusing on a very narrow homogeneous population of patients to first establish the potential for the activity of the drug and demonstrate that for OTO-313. I think the population you talk about and the potential use for that is something that we'd be very interested in looking at as we continue to advance the program. But at this time, we're focusing on a very narrow subset of patients to really allow us to detect that activity for further clinical advancement.

--------------------------------------------------------------------------------

Maria Yonkoski, Cantor Fitzgerald - Analyst [12]

--------------------------------------------------------------------------------

Sure. That makes a lot of sense. And just a follow-up, it seems like the mechanism of action for 313 is suggesting functional improvement, but you have endpoints that target emotional response and such as annoyance and those are even components in the TFI scale. So I guess, why do you think that this candidate could also improve on emotional response, and how likely is that?

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [13]

--------------------------------------------------------------------------------

Yes. I think -- well, this is a lot of what these patients experience. So in addition to the actual trauma, if you will, of the tinnitus, it actually disrupts their daily life, very much like vertigo for the Ménière's patients. So they're -- they have anxiety. They have inability to sleep. They have impact in their daily lives as a result of the tinnitus and the level of that tinnitus. And that's been shown, as I mentioned, through this validated instrument, that you can actually look at the corresponding relationship between the loudness and its impact on annoyance, sleep, et cetera.

Why we think that is important is because this is the kind of thing that really helps both the FDA understand the opportunity and need for the product. For example, the idea that you have -- both these, the symptoms of the disorder as well as the impact on the daily life, and of course it's a major piece of what insurers look at in terms of reimbursement of products that provide the benefit to those patients in not only treatment of the symptom, but also impacting the patient in terms of their performance daily life.

And so we see that both for Ménière's as being very important because we've looked at things like number of days on bed rest or at home and not at work or functioning, and we've shown that to be significant in our clinical work in Ménière's as with the reduction of the vertigo. And I think we would expect the same thing with OTO-313 in tinnitus.

--------------------------------------------------------------------------------

Operator [14]

--------------------------------------------------------------------------------

(Operator Instructions) And you have a question from the line of Esther Rajavelu with Oppenheimer.

--------------------------------------------------------------------------------

Esther P. Rajavelu, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [15]

--------------------------------------------------------------------------------

So one on OTIVIDEX. Where are you on enrollment, and how are the sites split between the U.S. and EU?

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [16]

--------------------------------------------------------------------------------

Yes. So thank you, Esther, for your question. So we've not -- as we've said, we've provided more clarity around the timing to be the end of Q3 2020, so we're providing clarity on that in terms of our timing to data. We do not actually get into enrollment numbers. And as you can imagine, there's -- we have both a screening period and then randomization and then through the study.

So in terms of the proportion of sites, roughly 3/4 of the sites are in Europe, with the remainder in the U.S. And we would expect the number of patients accordingly to follow a similar distribution to that.

--------------------------------------------------------------------------------

Esther P. Rajavelu, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [17]

--------------------------------------------------------------------------------

Okay. And then lastly, you've guided to your cash sort of taking you into 2021. Should we take that to mean that you would be in a position to file with the cash you have on hand?

--------------------------------------------------------------------------------

Paul E. Cayer, Otonomy, Inc. - Chief Financial & Business Officer [18]

--------------------------------------------------------------------------------

Yes, Esther, it depends on really how the activities this year play out. We certainly have -- the only thing we are doing is going from a positive Phase III result in the OTIVIDEX trial. We certainly have the cash to be able to get to the filing. But assuming a positive signal from both the 313 and the 413 trials and interest in continuing to move the preclinical programs along then that will impact the cash needs as well.

So we'll have to provide additional guidance as we get further along in the year, but I think it is important for investors to be aware that we do have the cash on hand to be able to get through these 3 clinical trial readouts. We want to make sure that investors are confident that we have the runway to be able to do that. And then what happens after that, we'll certainly work through and provide additional guidance on.

--------------------------------------------------------------------------------

Operator [19]

--------------------------------------------------------------------------------

(Operator Instructions) And there are currently no other questions. I would like to hand the call back to Dave Weber.

--------------------------------------------------------------------------------

David Allen Weber, Otonomy, Inc. - President, CEO & Director [20]

--------------------------------------------------------------------------------

Thank you. Thank you, everyone, for participating in our call today. We will be attending both the Cowen and the Oppenheimer health care conferences during the next couple of weeks and hope to meet with many of you there. Have a good evening. Thank you.

--------------------------------------------------------------------------------

Operator [21]

--------------------------------------------------------------------------------

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.