12:41 PM
Jun 02, 2017
 |  BioCentury  |  Product Development

Ears wide open

How hearing loss became an investable space

Based on unmet need alone, hearing loss should have been every bit as attractive to investors and drug developers as ophthalmic diseases, which entered a renaissance in the mid-2000s resulting in a multibillion-dollar market for innovative drugs today.

Both markets have been growing as populations in developed countries age, and both had long been starved of pharmaceutical innovation.

The barriers to innovation in both disease areas were also the same: a lack of breakthroughs in disease biology and difficulties with delivering drugs to the affected tissues: the retina in the eye and the cochlea in the ear.

More than a decade after advances in science and drug delivery opened the door to innovative new drugs for the eye, they are now doing so for the ear, and investors believe hearing loss is poised to follow ophthalmology's growth trajectory.

Since 2013, hearing loss companies have amassed $299.3 million in venture funding and $469.7 million in public funding, a leap from the $86.4 million in VC funding and $57 million in public funding raised in 2007-12 (see “Cranking the Volume”).

Among at least 17 companies developing therapeutics for hearing loss, nine raised their first round of financing in the past five years.

The past decade has also seen a small but steady stream of early stage hearing loss deals, including five with big pharma.

"Pharma is starting to catch on to the fact that this could become the next ophthalmology."

Antoine Papiernik, Sofinnova Partners

"Pharma is starting to catch on to the fact that this could become the next ophthalmology, and they're paying attention to what's going on there," said Antoine Papiernik of Sofinnova Partners, which invested in hearing loss play Auris Medical Holding AG prior to the company's IPO in 2014.

At least seven therapies that aim to prevent hearing loss or stop it from progressing are in the clinic, including three in Phase III testing. Investors expect to see the first approvals from this group in the next two years (see “Hearing Loss Pipeline”).

A next generation of therapeutics aimed at reversing hearing loss is on the horizon. At least nine companies have hearing loss programs that aim to regenerate hair cells, and two are pursuing ribbon synapse repair.

The most advanced therapeutic in this area is CGF166, a gene therapy from Novartis AG and GenVec Inc. in a Phase I/II trial for severe to profound hearing loss. CGF166 is a recombinant adenovirus 5 (Ad5) vector containing a cDNA carrying the atonal homolog 1 (ATOH1; HATH1) transcription factor.

Two other regenerative therapies expect to enter the clinic within the next two years.

One company, Autifony Therapeutics Ltd., is focused on improving auditory processing in the brain. Its Phase II candidate, AUT00063, targets potassium channels in the brain thought to be important in central auditory processing.

Figure: Hearing loss pipeline

The majority of hearing loss programs have anti-inflammatory and/or anti-apoptotic properties that aim to prevent hearing loss or stop it from progressing. Some of these, such as brimapitide from Auris Medical Holding AG (NASDAQ:EARS) and Otividex dexamethasone otic gel from Otonomy Inc. (NASDAQ:OTIC), are exploiting advanced delivery technologies that should reduce treatment burden and improve efficacy over off-label steroids.

At least two in this category, SENS-401 from Sensorion S.A. (Euronext:ALSEN) and AF243 from Affichem S.A., may also promote repair of axons and synapses. Compounds in the otoprotective category below protect sensory neurons by other types of mechanisms.

At least nine companies aim to reverse hearing loss that has already occurred by regenerating lost hair cells or synapses. The only regenerative program in the clinic is CGF166, a gene therapy from Novartis AG (NYSE:NVS; SIX:NOVN) and GenVec Inc. (NASDAQ:GNVC) that uses a recombinant adenovirus 5 (Ad5) vector to deliver the atonal homolog 1 (ATOH1; HATH1) transcription factor. Acousia Therapeutics GmbH, Audion Therapeutics B.V., Decibel Therapeutics Inc., Inception 3 Inc., Otologic Pharmaceutics Inc. and Otonomy each have undisclosed regenerative therapies in preclinical development not shown below.

Autifony Therapeutics Ltd. is the only company targeting the CNS component of hearing. AUT00063 modulates potassium channels in the brain to enhance central auditory processing.

The chart includes lead indication for each program. Those not specifically noted with “prevent” are intended to treat their respective indications. (A) Spiral Therapeutics Inc. has an option to BN201 and BN119 for inner ear disorders and anticipates making a decision by 3Q17; (B) GenVec Inc. is being acquired by Intrexon Corp. (NYSE:XON); (C) Phase I/II ongoing; JNK = c-jun N-terminal kinase; LXR = liver X receptor; PGF2 alpha = prostaglandin F2 alpha receptor; NFE2L2 = nuclear factor (erythroid-derived 2)-like 2 (NRF2); PPAR = peroxisome proliferation activated receptor; KCNC1 = potassium channel Kv3.1; APAF1 = apoptotic peptidase activating factor 1 (APAF1); SGK2 = serum/glucocorticoid regulated kinase 2; CDKN1B = cyclin dependent kinase inhibitor 1B; Source: BCIQ: BioCentury Online Intelligence, company press releases, company interviews

Figure: Cranking the volume

Funding for companies developing products to treat or prevent hearing loss took off in 2013, kicked off by Auris Medical Holding AG (NASDAQ:EARS) and Otonomy Inc. (NASDAQ:OTIC). That year, Auris raised a $50.7 million series C round. It encored with a $60.7 million IPO in 2014 and has raised a further $47.6 million in follow-ons....

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