On May 13, 2021 Decibel Therapeutics (Nasdaq: DBTX), a clinical-stage biotechnology company dedicated to discovering and developing transformative treatments to restore and improve hearing and balance, reported financial results for the first quarter ended March 31, 2021 and provided a corporate update (Press release, Decibel Therapeutics, MAY 13, 2021, View Source [SID1234585162]).
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"The start of 2021 marked a pivotal time for Decibel as we successfully closed our upsized IPO. With this strong financial foundation, we are in a position to further advance our exciting pipeline of clinical, preclinical and discovery programs with the overarching goal of bringing the privileges of hearing and balance to people in need. In early 2021, we announced encouraging preclinical results on our lead gene therapy program, DB-OTO, for the treatment of people with otoferlin deficiency. We also established a critical cGMP manufacturing and development relationship with Catalent," said Laurence Reid, Ph.D., Chief Executive Officer of Decibel. "Beyond DB-OTO, we remain encouraged by the progress in our gene therapy programs for congenital, monogenic hearing loss and look forward to announcing the program target for our AAV.104 program in 2021."
Company Highlights
Closed Second Tranche of Series D Financing and Upsized Initial Public Offering: In February 2021, Decibel completed its Series D financing, closing the second tranche and receiving net proceeds of $27.4 million. Additionally, Decibel completed its Initial Public Offering (IPO) of 7,662,000 shares of common stock at a public offering price of $18.00 per share. Net proceeds from the offering, after deducting underwriting discounts and offering expenses, were approximately $124.8 million.
Pipeline Progress
Gene Therapies for Congenital, Monogenic Hearing Loss
Continued Development of Lead Gene Therapy Program, DB-OTO, for Otoferlin (OTOF): In February 2021, Decibel established manufacturing capabilities for its lead gene therapy product candidate, DB-OTO. Under the new agreement, Catalent will provide Decibel with cGMP manufacturing and process and analytical development of DB-OTO.
Presented New Preclinical Data on DB-OTO and Surgical Approach at the 44th Annual Association for Research in Otolaryngology Conference (ARO) and the Annual Scientific and Technology Conference of the American Auditory Society: In the first quarter of 2021, Decibel presented new preclinical findings to support the development of DB-OTO. Presentations highlighted data demonstrating that the Company’s proprietary dual vector technology and cell-selective promoter enabled expression of OTOF in hair cells and durably restored hearing in mice and drove highly selective expression of a reporter gene in hair cells of non-human primates across the cochlear length.
On Track for DB-OTO Key Milestones in 2022: Decibel expects to submit an investigational new drug application (IND) with the U.S. Food and Drug Administration (FDA) and/or a Clinical Trials Application (CTA) in Europe and initiate a Phase 1/2 clinical trial for DB-OTO in pediatric patients with congenital hearing loss in 2022.
Preclinical Pipeline Expansion Continues: Decibel expects to announce the program target for its AAV.104 discovery program in patients with autosomal recessive hearing disorders in 2021.
Gene Therapies for Hair Cell Regeneration
Preclinical Pipeline Expansion Continues: Decibel continues to advance DB-ATO and AAV.201, its gene therapy programs for regeneration of hair cells in the vestibule for the treatment of bilateral vestibulopathy, and its gene therapy program to regenerate hair cells in the cochlea for the treatment of sensorineural hearing loss. Based on findings from recently completed behavioral studies of DB-ATO, the Company did not see sufficient functional recovery to continue to move DB-ATO to development candidate in 2021. The Company plans to announce the program target for AAV.201 in 2022.
Otoprotection Therapeutic
Updated Timeline to Report Interim Results from Phase 1b Proof-of-Concept Trial of DB-020 for the Treatment of Cisplatin-Induced Hearing Loss: The reporting of interim results from the ongoing Phase 1b clinical trial of DB-020 in patients with cisplatin-induced hearing loss is now expected in the first half of 2022 due to continued impact of the COVID-19 pandemic on the pace of patient recruitment in the United States. Due to COVID-19 restrictions, sites in the United States have been delayed in recruiting, but are now open and actively recruiting for the trial, along with the active sites in Australia.
First Quarter 2021 Financial Results:
Cash Position: As of March 31, 2021, cash, cash equivalents and available-for-sale securities were $191.1 million, compared to $54.3 million as of December 31, 2020. The increase in cash, cash equivalents and available-for-sale securities was due to the sale of the Company’s Series D convertible preferred stock and common stock in the Company’s IPO completed in February 2021.
Research and Development Expenses: Research and development expenses were $6.0 million for the first quarter of 2021, compared to $7.4 million for the first quarter of 2020. The decrease in research and development expenses for the first quarter of 2021 was primarily due to $1.8 million decrease in personnel-related costs due to reduced headcount, driven primarily by a reduction-in-force conducted in January 2020 and a $0.8 million decrease in expenses incurred for our DB-020 program driven by decreased activity as a result of delays due to the COVID-19 pandemic, partially offset by an increase of $1.2 million in other indirect research and development expenses.
General and Administrative Expenses: General and administrative expenses were $4.9 million for the first quarter of 2021, compared to $4.2 million for the same period in 2020. The increase in general and administrative expenses for the first quarter of 2021 was primarily attributable to $1.0 million increase in professional fees, driven primarily by expenses related to consulting, accounting advisory and audit services incurred as a result of becoming a public company in February 2021.
Financial Guidance:
Based on its current operating and development plans, Decibel believes that its existing cash, cash equivalents and available-for-sale securities will fund its pipeline programs and operating expenses into 2024.