Auris Medical, the Swiss biotech focused on diseases and disorders of the ear, got the catchy ticker symbol (NASDAQ: [[ticker:EARS]]) when it went public last week. But San Diego’s Otonomy (NASDAQ: [[ticker:OTIC]]) got a better valuation yesterday when the biotech ear specialist priced its stock in the upper range at $16 a share.
Otonomy traded to over $17 a share today in the company’s first day of trading. The company priced 6.25 million shares, 1 million more than initially predicted, and raised total proceeds of $100 million. In a short statement, Otonomy says it also granted its underwriters a 30-day option to purchase up to 937,500 additional shares, which would raise an additional $15 million. The company provided all shares in the common stock offering.
Auris Medical had to boost its share count and cut its price when the company priced its IPO on August 5. T2 Biosystems also lowered the terms of its IPO last week, and two other biotechs (Tobira Therapeutics and Microlin Bio) cited poor market conditions when they postponed their IPOs, collectively raising a question about how well Otonomy’s IPO would fare.
A spokesman for Otonomy said CEO David Weber would not discuss the offering; the company is still under a SEC-mandated quiet period. Otonomy’s lead drug candidate is a sustained-release form of the antibiotic ciprofloxacin that’s intended to reduce infections in children undergoing ear tube placement surgery.
The San Diego biotech was founded in 2008 by Jay Lichter, a partner at the La Jolla venture capital firm Avalon Ventures, after he was stricken by Meniere’s disease, an inner ear fluid imbalance that leads to episodes of severe dizziness, vertigo, and gradual hearing loss. The company initially began development of a drug intended to treat the rare inner-ear disorder, but Weber re-ordered Otonomy’s drug development pipeline when he took over for Lichter in 2010.
Avalon provided early stage funding, and was later joined by RiverVest Venture Partners, OrbiMed Advisors, Novo Ventures, TPG Biotech, Domain Associates, Aperture Venture Partners, Osage University Partners, Jennison Associates, Perceptive Advisors, the Federated Kaufmann Funds, Ally Bridge Group, and certain private funds advised by Clough Capital Partners.