Decibel Therapeutics Reports Fourth Quarter and Full Year 2021 Financial Results and Corporate Update

Rhea-AI Summary

Decibel Therapeutics (Nasdaq: DBTX) provided a corporate update and financial results for Q4 and the full year 2021. The company anticipates key milestones in 2022, including submitting an IND for DB-OTO and initiating a Phase 1/2 trial for pediatric patients with congenital hearing loss. The collaboration with Regeneron has been extended, with a $10 million fee expected. As of December 31, 2021, cash and equivalents totaled $162.3 million, a significant increase from $54.3 million in 2020. R&D expenses rose to $29.8 million for 2021, up from $25.3 million in 2020.

Positive

• Cash position increased to $162.3 million as of December 31, 2021, from $54.3 million in 2020.
• Anticipated IND submission for DB-OTO in 2022, aiming to initiate clinical trials.
• Extension of collaboration with Regeneron, including a $10 million fee.

Negative

• R&D expenses rose to $29.8 million for 2021, compared to $25.3 million in 2020.

- Key anticipated catalysts in 2022 include submission of IND and/or CTA for DB-OTO and results from interim analysis from Phase 1b trial of DB-020 for cisplatin-induced hearing loss -

- Research term extended under strategic collaboration with Regeneron to discover and develop gene therapies for hearing loss -

- Announced AAV.104 gene therapy program for restoration of hearing in patients with stereocilin-related hearing loss -

- Presented new preclinical data supporting continued progress of DB-OTO and importance of cell-selective transgene expression across gene therapy pipeline at the 45^th Annual Association for Research in Otolaryngology Conference (ARO) -

BOSTON, March 18, 2022 (GLOBE NEWSWIRE) -- Decibel Therapeutics (Nasdaq: DBTX), a clinical-stage biotechnology company dedicated to discovering and developing transformative treatments to restore and improve hearing and balance, today reported financial results for the fourth quarter and full year ended December 31, 2021 and provided a corporate update.

“In 2021, Decibel made significant progress across our pipeline and towards our goal to bring transformative treatments to patients with hearing and balance disorders. We are on track to meet a number of important milestones in 2022, including the initiation of the first clinical trial of our lead gene therapy candidate, DB-OTO, designed to treat congenital hearing loss resulting from an otoferlin deficiency,” said Laurence Reid, Ph.D., Chief Executive Officer of Decibel. “Among the milestones expected in 2022, we look forward to reporting the results of the interim analysis of our Phase 1b clinical trial of DB-020 in patients receiving cisplatin chemotherapy. We were also pleased that our gene therapy research and development collaboration with Regeneron was extended, that we expanded our preclinical gene therapy pipeline, and that we augmented our excellent Board of Directors.”

Pipeline Highlights and Upcoming Milestones:

Gene Therapies for Congenital, Monogenic Hearing Loss        

• On Track to Achieve DB-OTO Key Milestones in 2022: Decibel expects to submit an investigational new drug application (IND) to the U.S. Food and Drug Administration and/or a Clinical Trial Application (CTA) in Europe for DB-OTO in 2022. Decibel also anticipates initiating a Phase 1/2 clinical trial of DB-OTO for pediatric patients with congenital hearing loss due to an otoferlin deficiency in 2022.
• Presented New Preclinical Data at the 45^th Annual Association for Research in Otolaryngology Conference (ARO) for DB-OTO and AAV.104 Programs: In February 2022, Decibel presented preclinical DB-OTO data as well as preclinical data highlighting the identification of proprietary, cell-selective promoters for three of its gene therapy pipeline programs at ARO. New DB-OTO data further characterized expression of otoferlin over time following DB-OTO administration in mice and non-human primates consistent with the expression previously reported in mice that achieved stable functional recovery. Decibel also shared functional recovery and tolerability data associated with DB-OTO dosing over a 10-fold dose range in mice. Decibel also presented data on how the Company deploys its platform to develop novel, proprietary, cell-selective promoters and the potential advantages that cell-selective expression may confer to its gene therapy preclinical programs.
• Announced AAV.104 Gene Therapy Program for Restoration of Hearing in Patients with Congenital Hearing Impairment Due to Recessive Mutations in the Stereocilin (STRC) Gene: In November 2021, Decibel announced the target for its discovery stage program, AAV.104, which aims to restore hearing to individuals with an STRC deficiency, the second most common cause of autosomal recessive, non-syndromic, congenital hearing loss. The AAV.104 program is designed to express STRC selectively in outer hair cells, thus providing STRC specifically in its natural cellular location, a strategy that we believe has the potential to restore expression of the protein and hearing.
• Product Candidate Selection for AAV.103 Program Anticipated in 2022: Decibel intends to select a product candidate for its AAV.103 program to restore hearing to individuals with a gap junction beta-2 (GJB2) deficiency, the most common cause of autosomal recessive, non-syndromic, congenital hearing loss.

Gene Therapies for Hair Cell Regeneration

• Plans to Announce AAV.201 Program Target(s): Decibel continues to advance gene therapy programs for regeneration of hair cells in the vestibule for the treatment of bilateral vestibulopathy (BVP). Decibel plans to announce the program target(s) for its AAV.201 program in 2022. Our AAV.201 program is an AAV-based gene therapy that utilizes a proprietary supporting cell-selective promoter to express ATOH1 in combination with an additional factor. Our AAV.201 program aims to restore balance by promoting regeneration of Type I and Type II hair cells in the vestibular system.
  

Otoprotection Therapeutic

• Interim Results from Phase 1b Proof-of-Concept Trial of DB-020 for the Treatment of Cisplatin-Induced Hearing Loss Expected in the First Half of 2022: Decibel expects to report the results of an interim analysis from the ongoing Phase 1b clinical trial of DB-020 in patients with cisplatin-induced hearing loss, a serious and debilitating condition for which there are no approved therapies, in the first half of 2022. Cisplatin, a commonly used chemotherapy agent, is known to cause hearing loss, tinnitus and speech recognition difficulty. DB-020 comprises a proprietary formulation of sodium thiosulfate that has been optimized for delivery to the ear. DB-020 is designed to protect hearing without interfering with cisplatin’s anti-cancer activity by locally disabling cisplatin in the cochlea.
  

Research Highlights:

• Publication of Foundational Study of Noise-related Inner Ear Damage: In September 2021, Cell Reports published findings from a study of noise-related inner ear damage by the University of Maryland School of Medicine in collaboration with Decibel and the Karolinska Institute. The study’s aim was to generate an atlas of gene expression changes across inner ear cell types following noise damage. The study represents the first such comprehensive analysis and provides a foundational dataset that can be mined for future studies of the inner ear.
  

Corporate Highlights:

• Strengthened Board of Directors with Key Appointments: In December 2021, Decibel announced the appointments of Alison Finger, MBA, and Saraswathy Nochur, Ph.D. to its Board of Directors. Previously, in June 2021, William (Bill) H. Carson, M.D., was appointed as Chairman of the Board of Directors.

• Extended Research Term Under Strategic Collaboration with Regeneron to Discover and Develop Gene Therapies for Hearing Loss: In November 2021, Decibel announced that Regeneron extended the research term of its collaboration to discover and develop gene therapies for hearing loss. The research term was extended to November 15, 2023, and Regeneron is obligated to pay Decibel the associated extension fee of $10 million in the fourth quarter of 2022. Through the collaboration, Regeneron provides Decibel with broad access to its proprietary suite of technologies to support Decibel's goal of discovering new medicines for congenital, monogenic hearing loss. Decibel retains worldwide development and commercialization rights to the product candidates being developed in the collaboration and is obligated to pay Regeneron tiered royalties based on net sales.
  

Fourth Quarter and Full Year 2021 Financial Results:

• Cash Position: As of December 31, 2021, cash, cash equivalents and available-for-sale securities were $162.3 million, compared to $54.3 million as of December 31, 2020. The increase in cash, cash equivalents and available-for-sale securities was primarily due to net proceeds of $125.0 million from the company’s IPO in February 2021 and net proceeds of $27.4 million from the second closing of our Series D fundraising in February 2021 offset by operating expenses.
• Research and Development Expenses: Research and development expenses were $8.0 million for the fourth quarter of 2021, compared to $7.9 million for the same period in 2020. Research and development expenses were $29.8 million for the full year 2021, compared to $25.3 million for the full year 2020. The increase in research and development expenses for the full year 2021 was primarily due to higher development costs related to manufacturing activities and IND-enabling studies for DB-OTO.
• General and Administrative Expenses: General and administrative expenses were $4.9 million for the fourth quarter of 2021, compared to $5.1 million for the same period in 2020. General and administrative expenses were $20.4 million for the full year 2021, compared to $14.2 million for the full year 2020. The increase in general and administrative expenses for the full year 2021 was primarily attributable to higher costs associated with operating as a public company, including D&O insurance and accounting and legal fees, as well as higher wages due to increased headcount.
  

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.

About Decibel Therapeutics

Decibel Therapeutics is a clinical-stage biotechnology company dedicated to discovering and developing transformative treatments to restore and improve hearing and balance, one of the largest areas of unmet need in medicine. Decibel has built a proprietary platform that integrates single-cell genomics and bioinformatic analyses, precision gene therapy technologies and expertise in inner ear biology. Decibel is leveraging its platform to advance gene therapies designed to selectively replace genes for the treatment of congenital, monogenic hearing loss and to regenerate inner ear hair cells for the treatment of acquired hearing and balance disorders. Decibel’s pipeline, including its lead gene therapy program, DB-OTO, to treat congenital, monogenic hearing loss, is designed to deliver on our vision of creating a world of connection for people with hearing and balance disorders. For more information about Decibel Therapeutics, please visit www.decibeltx.com or follow us on Twitter.

Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this press release, including statements regarding Decibel’s strategy, future operations, prospects, plans, objectives of management, the therapeutic potential for Decibel’s product candidates and preclinical programs, the potential benefits of cell-selective expression, the expected timeline for submitting investigational new drug applications and clinical trial applications, initiating clinical trials, reporting clinical trial results and achieving other anticipated milestones, expectations regarding the translation of preclinical findings to human disease and the sufficiency of Decibel’s existing cash resources for the period anticipated, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” or “would,” or the negative of these terms, or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Decibel may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements as a result of various important factors, including: uncertainties inherent in the identification and development of product candidates, including the conduct of research activities and the initiation and completion of preclinical studies and clinical trials, the timing of and Decibel’s ability to submit and obtain approval to initiate clinical development of its program candidates, whether results from preclinical studies will be predictive of the results of later preclinical studies and clinical trials, whether Decibel’s cash resources are sufficient to fund its foreseeable and unforeseeable operating expenses and capital expenditure requirements, uncertainties related to the impact of the COVID-19 pandemic on Decibel’s business and operations, as well as the risks and uncertainties identified in Decibel’s filings with the Securities and Exchange Commission (SEC), including those risks detailed under the caption “Risk Factors” in Decibel’s Annual Report on Form 10-K for the fiscal period ended December 31, 2021 and in other filings Decibel may make with the SEC. In addition, the forward-looking statements included in this press release represent Decibel’s views as of the date of this press release. Decibel anticipates that subsequent events and developments will cause its views to change. However, while Decibel may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Decibel’s views as of any date subsequent to the date of this press release.

Condensed Consolidated Balance Sheets
(in thousands)
								December 31,
									2021				2020
Cash, cash equivalents and available-for-sale securities								$	162,294			$	54,310
Total assets									184,477				67,285
Convertible preferred stock									—				93,091
Total stockholders' equity (deficit)									141,689				(54,781	)
Condensed Consolidated Statement of Operations
(in thousands)
								Year ended December 31,
									2021				2020
Operating expenses:
	Research and development							$	29,847			$	25,322
	General and administrative								20,384				14,241
		Total Operating expenses							50,231				39,563
Loss from operations									(50,231	)			(39,563	)
Other income:
	Interest income								193				55
	Other income, net								12				171
		Total other income, net							205				226
Income before income tax provision									(50,026	)			(39,337	)
	Provision for income taxes								(1,797	)			—
Net loss								$	(51,823	)		$	(39,337	)

Investor Contact:
Julie Seidel
Stern IR, Inc.
julie.seidel@sternir.com
212-362-1200

Media Contact:
Chris Railey
Ten Bridge Communications
chris@tenbridgecommunications.com
617-834-0936

FAQ

What are the key milestones for DBTX in 2022?

Key milestones for Decibel Therapeutics in 2022 include the submission of an IND for DB-OTO and results from the interim analysis of the Phase 1b trial of DB-020.

How much cash does Decibel Therapeutics have?

As of December 31, 2021, Decibel Therapeutics reported cash, cash equivalents, and available-for-sale securities of $162.3 million.

What are the recent financial results for DBTX?

Decibel Therapeutics' total R&D expenses for 2021 were $29.8 million, compared to $25.3 million in 2020, with a net loss of $51.8 million.

What is the status of the collaboration with Regeneron?

Decibel Therapeutics extended its collaboration with Regeneron until November 15, 2023, with a $10 million fee expected in Q4 2022.