After drawing $45.9 million in a series C financing round last September, Otonomy Inc. put another $49 million into the coffers by way of an oversubscribed series D round, which will let the San Diego-based firm advance its products for ear conditions "well into the second half of 2015," said CEO David Weber.

"The ear is the next eye," Weber told BioWorld Today, comparing the mostly nascent work in otology to the state of research in retinology in the early 1990s.

"There was really nothing in terms of pharmaceutical treatments there, and now look at that market," he said.

Otonomy is nearly done with two phase III trials testing OTO-201, a sustained-release form of ciprofloxacin, in pediatric patients undergoing tympanostomy tube placement surgery, with data expected in the third quarter of this year and a new drug application filing in the first quarter of 2015.

"In parallel, we're conducting the first of two sequential pivotal studies with OTO-104," a sustained-release formulation of the steroid dexamethasone that's been granted fast-track status by the FDA, he said. A phase Ib study in patients with Ménière's disease found the drug safe and well tolerated, with meaningful reductions in vertigo frequency and improvements in tinnitus as compared to placebo. One phase IIb, designed to be pivotal, is already enrolling in the U.S. and Canada. Results are due in first quarter of 2015, after which the company will start the second trial.

The third product, OTO-311, is a sustained-exposure formulation of the N-Methyl-D-Aspartate (NMDA) receptor antagonist gacyclidine, intended as a therapy for tinnitus. It's in preclinical testing, with an investigational new drug application probable next year. Otonomy also is starting to prepare for commercializing OTO-201. "We would expect to be able to market that product in 2016," Weber said, and the firm will go it alone "in the U.S. and potentially in Europe. It's such a unique market. There are no pharmaceutical companies really calling on this space in a major way."

The firm could hire "a small number of sales people and then grow that to less than 100, which will give us more than ample coverage in the U.S.," Weber said, whereas outside the U.S. and Europe, "we would look more strategically at potential partnerships, particularly in Asia, for example."

Otology is one of the few "severely underserved markets," Weber added. "The last innovation was ear drops." The field is led by a "small specialty group of surgeons who are typically rapid adapters," making for easy penetration, he said.

Included in Weber's background is a stint as CEO of Sunnyvale, Calif.-based Oculex Pharmaceuticals Inc. until it was bought by Allergan Inc., of Irvine, Calif., in 2003 for $230 million. He supervised the development of Posurdex, a biodegradable, sustained-release ocular implant that delivers dexamethasone for persistent macular edema.

When he started shaping up the market for Posurdex, Weber dealt mainly with surgeons, who tried to solve retinal problems by operating, but the scalpel can't fix everything. "That's very much the way otologists are today," he said.

"There's definitely been an awakening in the [otology] space" on the part of pharma firms, Weber said, based on what happened in eye diseases. "They know how fast those products entered the market and changed the lives of patients and physicians in a positive way, and that's what we believe we have the opportunity to do in otology."

For Otonomy, the key is delivery. In the physician's office, the drug is injected through a small-gauge needle into the middle ear as a gel, where it stays for sustained exposure. With OTO-104, the drug lasted two to three months after a single injection.

In tinnitus, Otonomy would compete with Auris Medical AG, which has AM-101, also an NMDA receptor antagonist, undergoing phase III trials that could lead to regulatory filings on both sides of the Atlanta in 2016. (See BioWorld Today, March 11, 2014.)

Auris, of Basel, Switzerland, has gained clinical activity with its candidate for up to three months, but it requires once-daily shots for three days, Weber said, adding that Otonomy's molecule is "more potent and much more selective to the target receptor."

Otology "is our blood, if you will," Weber said. "It's a passion for us, because that's the way we were founded." Jay Lichter at Avalon Ventures, himself a Ménière's disease patient, brought the company to life after finding out how limited are the treatments. (See BioWorld Today, March 23, 2009.)

After Ménière's disease, Otonomy intends to go after other segments of the multi-billion-dollar ear market, exploring hearing loss caused by noise and chemotherapy. "Many people don't realize that when kids are put on certain oncology products for cancer, they lose hearing," Weber said.

New investors in the series D include Jennison Associates LLC (on behalf of clients), Perceptive Advisors, Federated Kaufmann Funds, certain private investment funds advised by Clough Capital Partners LP, Ally Bridge Group and additional undisclosed institutional investors. All existing investors participated in the round, too, including OrbiMed Advisors LLC, Novo Ventures, TPG Biotech, Avalon Ventures, Domain Associates, RiverVest Venture Partners, Aperture Venture Partners and Osage University Partners.