NVUS 2018 Annual Report

The pathophysiology of OM and ETD are closely related. Both conditions can arise as a result of upper respiratory tract infections, allergies, and other inflammatory mediators and one condition can perpetuate the other condition. There are more than 700 million cases of OM and ETD around the world every year, half of which occur in children under 5 years of age. In the U.S. alone, there were more than 15 million visits to physicians during 2014 related to OM and ETD. It is one of the most common diseases seen in Pediatric and Otolaryngology practices and is the most frequent reason children consume antibiotics or undergo surgery. To date, no drug product has been approved to treat OM. Antibiotics are commonly used to treat AOM patients who present with signs and symptoms of infection, but antibiotics have no effect on viral infections or OME which is a non- infectious condition. More importantly, antibiotics do not prevent recurrent AOM, recurrent OME or chronic OME. Topical steroids, antihistamines, and decongestants have not been shown to be effective as OM treatments or to prevent OM. In addition, the American Academy of Otolaryngology ² Head and Neck Surgery recommends against use of these drugs in patients with OM. The only option today to treat and possibly prevent RAOM, ROME or COME, is to perform a surgery where the tympanic membrane is perforated to improve drainage and ventilation of the middle ear (myringotomy or tympanostomy tube insertions). However, surgery is not always an effective solution for all patients as many continue to suffer with OM or its complications, and sometimes require repeat surgeries. Managing recurrent and chronic OM drives billions of dollars in healthcare costs and results in millions of surgical procedures in children and adults around the world. There is a clear unmet need for a safe, non-antibiotic, non-surgical option for patients. In 2016, the U.S. Food and Drug Administration (FDA) permitted marketing of a medical device that uses a small intranasal balloon inserted into the ET to treat persistent ETD in adults. However, like OM, no drug product has been approved for the prevention of ETD. OP0201 is a novel nasal aerosol combination drug product, comprised of the two active ingredients, DPPC and CP, and formulated with a propellant for easy administration. OP0201 is delivered as a local treatment through each nostril using a pMDI device. The pMDI device holds the canister and sprays the drug product into the nasal cavity. Together DPPC and CP are designed to effectively absorb to the air-liquid interface of the mucosa and reduce the interfacial surface tension of the ET, which reduces the passive pressure required for the E 7 WR RSHQ ,Q RWKHU ZRUGV 23 LV LQWHQGHG WR SURPRWH µGH - VWLFNLQJ¶ RI WKH (7 VR WKDW YHQWLODWLRQ RI WKH PLGGOH HDU PD\ RFFXU . Avanti Polar Lipids, Inc. (Alabaster, Alabama, U.S.) is our sole supplier of DPPC and CP, the active pharmaceutical ingredients used in OP0201. Other manufacturers of DPPC and CP exist, but we have not yet qualified a secondary supplier. The drug product is currently manufactured using Good Manufacturing Practices by Sciarra Aeromed, Inc. (Hicksville, New York, U.S.). We have not yet qualified a secondary manufacturer. Surfactants are ubiquitous and well-understood endogenous compounds present in human nasal passages, the ET, and lung tissues, as well as in human milk and amniotic fluid. Surfactants have been evaluated under the hypothesis that exogenous administration of surfactant to a mucosal lined lumen such as the alveoli would result in de-sticking of the tissue and allowance of oxygen exchange in the lungs. In the case of the ET, it is known that the quantity of surfactants along the ET of children with OM is significantly reduced when compared to otologically healthy children. Also, the ET surface tension in patients with OM is higher than reported for patients with healthy ETs, causing the luminal surfaces to stick together. Indeed, reduction in ET luminal surface tension and passive opening pressure (POP), as well as improved ET function was demonstrated in a study of six cynomolgus monkeys who received injections of the calf lung surfactant extract INFASURF ® (whose main component is the surfactant DPPC) directly into the ET lumen. The positive effects of OP0201 on ET function have been observed in preclinical animal studies using an early formulation of a DPPC and CP combination surfactant product. Meaningful reductions in POP of healthy ET, as well as meaningful reduction in severity and duration of OM episodes in three animal species after treatment were observed. In two separate animal-model experiments, the investigators studied the effects of intranasal administration of the early formulation on ET POP of the left ear as compared to propellant in healthy Mongolian gerbils and albino mice. In both animal species, administration of the product resulted in significant (p<0.001) reductions in mean ET POP measurements at both the 5 and 10-minute assessment times compared to baseline and immediately following propellant alone administration (Figures 1, 2 and 3). Among the gerbils, the mean (standard error [SE]) ET POP values (in millimeters of mercury [mmHg]) were 42.8 (2.29) at baseline, 42.43 (2.36) after propellant, 31.76 (1.74) at 5 minutes after surfactant, and 29.3 (1.51) at 10 minutes after surfactant. Similar findings were noted in the mice: mean (SE) ET POP values were 42.02 (1.22) at baseline, 42.02 (1.22) after propellant, 29.77 (1.69) at 5 minutes after surfactant, and 32.79 (1.77) at 10 minutes after surfactant.

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