Half Year 2020 Auris Medical Holding Ltd Earnings Call

[music].

Good morning, and welcome to Auris Medicals Conference call on today's call are Thomas Meyer, Auris, Medicals, Chairman and Chief Executive Officer, and Omar Shirley Auris Medical's, Chief Financial Officer, who will present, the company's financial results for the first half of 2020 and provide a business update it.

Beginning slides can be found on our website in the investors section.

Earlier today Auris medical issued a news release with the first half 2020 financial results as well as a business update the release is available on the company's website Auris medical Dot com and filed with the FCC.

During today's call, we'll be making forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

These include statements that address future operating financial or business performance or our strategies or expectations.

Forward looking statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that could cause actual results developments and business decisions to differ materially from those contemplated by these statements. These risks and uncertainties include but are not limited to the timing and conduct of our clinical trials the clinical use.

Guilty of our product candidates, the timing or likelihood of regulatory filings and approval, our intellectual property position and our financial position as well as those described in the risk factors section in our annual report on form 20-F, and future filings with the Securities and Exchange Commission.

In addition, any forward looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.

While we may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change.

With that I'll hand, the call over to Thomas Meyer.

Thank you ladies.

Hello, everyone and thank you for taking the time to join Auris Medical's first half Twentytwenty earnings and business update call.

Well, Nicole I will provide an update on our various development projects.

Well as an overview of recent corporate developments.

Following my update or see a full almost shelly will provide an overview of our first half financials.

Finally, I will discuss key milestones for 2020 and leading into a 2021.

Well then open the call for any questions.

The past few months, we continue to make significant progress with our clinical stage intranasally, but his team program.

<unk> positive results in our two main projects in 125 to one.

In terms of some key highlights.

We will be in boxing or phase two trial was in 125 for acute vertigo. Following the positive interim data that we recently announced.

And we reported positive outcomes in our phase one b trial, we see him tool for the reduction of antipsychotic induced weight gain.

We're also happy to report that the better tasting administered Intranasally showed good safety and Tolerability in those programs.

I will discuss the exciting data from these trials shortly.

In addition to our buddies steam programs we use.

Simply established a new program.

M. three a one a drug free nasal spray for protection against you know borne pathogens allergens.

This probably has the potential to protect against the wide variety of pathogens allergens.

We are pleased to report that we have already seen positive indications in as far as calling tool in vitro assay will be.

We will be conducting more studies throughout the rest of the year.

Finally from an operational and financial standpoint, we continued to reduce our operating expenditures and cash burn rate.

I'm pleased to say that we managed to align our spending with a temporarily reduced activity levels in our key clinical trial during the main culprit 19 locked down facing Europe.

On the other hand, we used that walks down to come up with some fresh ideas on how to self protect against airborne pathogens allergens, leading to the establishment of a new subsidiary Altamira medical which is dedicated solely to the development of industrial one.

We are pleased to have secured a convertible loan in order to kick off Im sure once development.

Lastly, we recently initiated the street T. cheek review to explore review and evaluate a broad range of potential strategic alternatives for the company with the.

With the aim of unlocking the potential of our various assets.

I will discuss this in a bit more detail following the program updates.

Moving to slide three I will now provide an update on each of our but is still in development project.

On to slide four.

I will start the program update with am 125 inch.

Intranasally that is seeing for the treatment of acute Verde go.

As a reminder, oral buddies team is the standard of care treatment for vertical in many countries around the world, but it's.

But its therapeutic potential is limited due to its low bioavailability.

And more than 25 is currently being assessed in our travel nurse phase two trial, which is conducted in several European countries and hopefully soon also in Canada and Australia.

The trial is to recruit one now that that h. in patients suffering from acute vertigo following certain types of neurosurgery.

The trial, we treat patients three times daily for four weeks with him on 25 or placebo.

The objective is to allow patients to regain control of their balance sooner and to improve their quality of life.

Primary endpoints, where to find us improvement in how long patients maintain balance in the tandem romberg and standing on fontes from baseline 14 days post surgery.

We just finished part a of the trial, which serve for dose finding and are currently enrolling patients for open label treatment was that his team who generate additional reference data. The trial will conclude it was part of <unk>.

On to slide five.

Part of any of the trial.

Straight to the dose dependent improvement in violence, that's one less good safety and Tolerability of ascending doses all in 125.

At the highest dose of 20 milligram and 125 treated patients improve their performance.

On the tendon romberg understanding on phone balance tests, you see some pictures of those tests on the slide.

On average 1.9 to 2.4 times more than placebo treated patients.

Oh, that's six versus 3.1 seconds, and 10.5 versus 4.3 seconds.

So at the beginning at baseline these patients are unable to walk or stand in the vast majority of cases.

In contrast to placebo and the improvement from baseline was statistically significant for am 125, 20 milligram and the tandem Roberts test with a P value of <unk> 0.02.

For all active dose groups in the study on phone test with P values ranging between less than <unk> point to one less than point of life.

These positive results were supported by similar improvements in additional security measures.

Including additional objectives as well as clinician and patient reported outcomes.

In terms of next steps, we will be testing the 10 and 20 milligram doses in 125 against placebo in seven.

In 72 patients in part B of the trial.

The improvement in the standing unfold test at day 14 will remain the primary efficacy endpoint the improvement in the more challenging time them roll brick test will be assessed as key secondary endpoint I'd be 45.

We are aiming to complete enrollment by the end of Q1 2021 provided that there are known you called it 19 restrictions on enrollment.

Onto slide six and eight until one.

A few months before the positive interim results with am 125.

We reported positive outcomes already from our second intranasally that existing project into one.

Was this project we are seeking to prevent major side effects of second generation antipsychotics.

Such as landscaping and.

In particular weight gain and some loans.

These side effects arise from the antagonistic effect all the antipsychotic drugs histamine one receptors in the brain is.

Well known that histamine plays a key role in the brains regulation of food intake and wakefulness.

The phase one b trial demonstrated good safety and Tolerability of ascending doses holes I am told one as well as a dose dependent reduction in weight thing.

In healthy volunteers treated it was all anticipating 10 milligrams.

10 milligrams for four weeks.

At the highest into one dose of 30 milligram.

The mean weight grain from baseline to the end of the treatment period was 2.8 kilograms compared against 3.7 kilograms in control subjects. The primary efficacy endpoint of mean read.

Mean reduction in weight gain was <unk> 0.9, kilogram and statistically significant with a P value of less than <unk> 0.02.

And the next step following additional preclinical testing the company intends to file for an Indian 2021.

Moving to slide seven.

I will now discuss our newly established program it's true.

Actually again.

Options and allergens.

Onto slide eight.

Last week, we announced the initiation of a new development program, where we are aiming to develop a truck free nasal spray for personal protection against the show borne pathogens allergens.

The current worldwide and dynamic that's for the highlight that the risks associated was airborne pathogens.

The nose is the main port of entry for airborne viruses and bacteria.

Normal conditions.

Human beings, taking approximately 90% of ear through then doses.

And I was at risk is exposure to allergens, such as those from Paul and animal hair or house stuff like what's your.

Which affect many people close.

Close to 8% of the adult U.S. population and 9% of children suffer from allergic rhinitis.

The nasal mucosa used the body's first line of defense as it helps to clear particles from the nose bite discharge into the sat rings and elimination through the gastrointestinal tract.

Industrial one is a gel.

Which works by forming a protective layer on the nasal be COSA.

Acting as a physical barrier against airborne pathogens allergens.

The Central Texas sold formed by Mcl, one helps to prevent the contact of such pathogens and Allergans with self.

In addition, the composition serves to trap or buying such particles and helpless that this charge.

Together. This is designed to reduce the risk of infection and promote alleviation of allergic symptoms.

With real Wong, we're seeking to provide a simple and effective means for personal protection in settings or places was increased risk of exposure to airborne pathogens, such as public transportation flights Crucis sports events concerts.

University lecturers.

Unlike our bet is the nasal sprays also all the development in.

Im through a long does not contain any active substance.

We believe that it won't be regulated markets it as an over the counter medical device.

As we move to slide nine I'll run through our development plan for this new product.

A key feature of AMC or wants development, a little bit the use of well established and safe components and have a classic nasal pumps spray for the gels delivery in order to achieve optimum safety and reduce development risks.

We are seeing a high medical need for this type of product and that therefore, you get to move the product expeditiously for it.

We have already done some efficacy testing and seeing positive protective effects was m. cereal once key component in the Sars Corona wireless tool assay.

This experiment the substance was added in various concentrations the suspension of the virus for various time periods.

Iris particles sweat and collected from the suspension and transfer the call to cell cultures for incubation long full viral replication and infection of adjacent cells.

The experiment showed that after only five minutes contact between AMC alongs key components and the virus suspension the way.

The wireless sexist load was reduced by up to 99%.

This is very encouraging.

We are currently preparing for the performance tests involving other pathogens allergens.

And standard by a compatibility is we.

We expect to conduct two relatively short clinical trials.

We plan to advance and complete the development of mm three along through our new Altamira Medical subsidiary, we are targeting submission of regulatory applications to the U.S. food and drug administration and regulatory authorities in other jurisdictions in 2021.

There are currently mapping out the required regulatory pathways and assessing the choice of predicate devices.

Last but not least we have already filed a provisional patent application.

While we are still in the early stages of this development program I'm very excited by it aims to real ones potential and by the pace at which the program is moving right.

We are committed to getting a product to market as soon as possible.

Forward to providing updates as we continue to work towards this goal.

Moving to slide 10, I will now provide some corporate updates.

And on to slide 11.

So the company's board of directors I start.

I started a process to explore review and evaluate a broad range of potential strategic alternatives.

These alternatives include but are not limited to.

The partnering off its various clinical and preclinical programs.

Or a sale or merger of the company and then.

In an effort to unlock the potential of those assets and maximize shareholder value.

With four clinical stage programs and several preclinical project Auris medical as a broad pipeline into pubic areas with high unmet medical need.

It is our mission to progress these innovative products through development and make them available to the many people worldwide, who are suffering from you know your disorders or who are seeking protection against antipsychotic induced weight gain.

Or who seek protection from airborne pathogens or allergens.

At the same time, we look to create value to our shareholders, while securing the funding for our development programs.

We expect that the strategic review process will facilitate our efforts to achieve these goals.

At this point there can be no assurance the company's strategic review will result in the completion of any particular, what course of action there.

There is no defined timeline for completion of the review process and the company does not intend to comment further unless a specific initiative as approved by the board of directors.

The review process is concluded.

Or it is otherwise determined that other disclosure is appropriate.

In addition, as mentioned we are excited to have recently established Altamira medical.

A subsidiary of Auris medical.

Highly focused on the development of a three to one.

Altamira is currently at 100% subsidiary of Auris Medical holding limited going forwards the company.

The company expects its ownership in Altamira to decrease so national strategic investors will be invited to join us shareholders.

Additional financing will be required.

Yeah first transaction feisty capital holding limited a Swiss long haul investment management firm.

So why did a convertible loan to altamira.

The loan as a principal amount of 1.5 million Swiss francs.

Under the terms of the agreements feisty he will have the right to convert the loan parts there off into common shares of these are ultimately your auris medical holding limited subject to additional provisions and certain restrictions.

Altamira will be looking to calibrate with one or more third parties in order to successfully commercialize themes here one product.

I would now like to hand, the call over to our Chief Financial Officer almost Shelly.

Run through our first half 2020 financial results.

Thank you Tony.

Before reviewing our financial results for the first half of Twentytwenty.

I would like to note that the financial statements are presented didn't see strength to help you with interpreting the financing.

Please consider that one Swiss franc is the equivalent of about 1.1 U.S. dollars.

Now moving to slide 13.

The first part of Twentytwenty, So one reduction in Italy to 2.7 million Swiss francs.

0.5 feet Swiss francs per share from 3.6 million Swiss francs.

1.66 Swiss francs per share in the first half of 10 to 19.

We therefore continue to reduce operating expenditures and the cash burn rate.

The main factors contributing to the decrease in two different.

Reduction in research and development expenses.

1.3 million Swiss francs in the first 10 to 19.9 million Swiss francs in the first half of Twentytwenty Prime.

Primarily due to lower startup costs.

Okay Nicole.

Trials and low red cones.

And a reduction in general and administrative expenses from 2.8 million fit brains in the first half of two into 19 to 1.5 million fees Frank.

First off of 10 to 20.

Administration expenditures in 2019 had included substantial external costs really.

Related to the Companys redomestication talking with them.

Please note that in the first half of the into Twinkie recapitalized and direct costs.

Related to our am Onetwenty five program in accordance with international accounting standard of 78.

For a total amount of Cedar point, Sevenmillion fit francs compared to 1.6 million Swiss francs for the six months ended June 32019.

Now on to slide 14.

Cash and cash equivalents at June 30, 2020 substantially lower than usual due to the reduction to par value per common share from.

For two funeral preneed funeral once these offerings.

Also the reduction itself was cash neutral prevented us temporarily from raising equity and what's completely only on June 30 Twentytwenty.

Since then we have raised about one 2.1 million use both in gross proceeds from the issuance of stock under the equity line this LPC and through our at the market program.

Addition, we obtained 1.5 million Swiss francs through the convertible loan from your medical.

We expect our total cash needs in Twentytwenty, including project I am three on one to be in the range of 7.0 to 8.5 million Swiss francs for expected total operating expenses.

4.5 to 5.5 million trees Frank.

And expected capitalized research and development expenses were 2.5 to 3.0 million strength.

These cash needs are below our earlier guidance.

So far we have used about 11% of the maximum amounts available under each the ATM program and equity line 25, and $10 million respectively.

With that I would like to turn the call back to Thomas.

Thank you Omar.

Concluding on slide 16.

We have had a very productive 2020, so far with key data read outs and the establishment of a new development program.

We have several key project milestones in the upcoming quarters that I'd like to highlight.

The start of part B of our phase two trial was a among 25.

The receipt of additional in vitro data was a industrial will pull.

Following this in vitro data that generation of clinical data was a three to one.

The filing overnight you for Intranasally that his team.

The completion of recruitment in part B of our am 125 phase two trial.

In addition, we'll obviously have a key focus on the strategic review.

I'm proud of the immense amount of work our team has put into our exciting development programs, especially in light of the call. It 19 related challenges.

I believe what we are doing well the life changing for very important patient populations.

I look forward to sharing intermittent updates as we continue to make progress.

With that I would like now to turn the call back to the operator, we'll open the line for questions.

Thank you, ladies and gentlemen, if you wish to ask a question you May Please press star and wanting your salad and.

And we are the operator to get your first and last name.

Once again, please press star one if you wish to ask a question.

We do have one question now and it comes from the line of Max Jacobs from Edison Group. Please ask your question.

Hi, guys. Thanks for taking my question.

So first I just want to ask about am three a one like how how long would that.

Would that gel coding last it was it.

Is it just meant for like short term you.

Hi, Max.

Well this is oh this.

Obviously, a very important question so as we know.

Within the note you have.

Those tiny little silly that constantly remove.

Objects particle so from the nose and so that's a fairly quick process now one of the particularities here off this gel formulation is that it's actually quite sticky so its a thin film, but it's designed to.

To stay to remain here for us.

For an extended period of time. So we are estimating that it will be up to a few hours, but we will need to perform here are some additional experiments.

But in any case it.

Definitely more than.

Dan the let's say natural residence time within the dogs.

Okay, Great and then I'm guessing you are targeting the over the counter pathway I was just wondering if you have any idea as to what the price.

The price might be.

Well, we do have some ideas about.

Ideas about a the potential pricing I think we want to make this clearly an affordable products on the other hand, it's a little bit premature here too already a talk about the pricing.

I mean, it is a it's a consumer health products. So it's a classic nasal spray and here was one spray you may have a enough supplies here to cover.

Copper for example, 14 days or a one month, so something like that but that's still under consideration and while we expect in any case that it will become a something that is affordable and effective and safe.

Okay, Great and then it doesn't.

Doesn't interfere with I mean.

Yeah, it'll still be reasonable through the nose like <unk> you wouldn't expect much discomfort from these at this gel.

Absolutely I mean this is one of the key requirement here.

As I said this is a very thin film that is established and so therefore, a bracing. This this should be absolutely normal I mean this is one of the advantages obviously, we know that some people are unable to outwear face masks.

For various reasons. So some people don't like wearing masks, so any sense of what we want to achieve here is really.

Reinforce the first line of defense of the nasal mucosa.

By adding here a protective layer and in addition, I'm also binding of trapping. These these particles and helping to move them. So it's a kind of a dual action.

Okay, Great and then just moving to the the face to traverse trial data I was wondering if you could just discuss like the clinical significance.

I guess it was like a little more than a fix that.

Six second benefit on the stand standing on phones has an.

And then the second benefit on the tandem Robert.

Yes, okay. So we.

Half you're a comp.

Continuous improvement.

As people start treatment over the four weeks of treatment and there is a follow up period of two weeks without any treatment and so.

And so there is a recovery in the placebo group and here are the aim was off.

And 120 fives is obviously to accelerate.

This recovery process, so to get people faster back on their feet.

Literally and what we can see here is that Oh, okay. The placebo did not differ significantly from Sidoti improvement with the active groups, we already could see some nice differentiation.

It's also very important to see that not only these two tests, but the additional tests also confirm supports these results and I'm talking about other objective measures I'm talking also about subjective feedback from patients. So we also measured.

On a visual analog scale.

The rating off of their health and it all points in the same direction. So in the end what we will need to show demonstrate here with this product is obviously, okay. We have a significant improvement in the recovery.

And we have also this recovery this improvement translating in a subjective perception of improvement.

Now to give you an idea I mean here. This process is continuing obviously I mean, the maximum time, he's 30 seconds now I can tell you I mean.

Doing a test here you can maintain balance for three seconds or you can maintain balance for six or seven seconds. It may sound as a.

Small difference, but actually it is already quite an important difference because what you essentially measure here is okay to what extent can your peripheral system.

Vestibular system.

Maintain allow to maintain a balance here on the pretty challenging conditions. So consider you close your eyes consider you cross your arms as you can see on the pictures and the tried to maintain balance on a soft surface and you will quickly figure.

Oh, it's that it's not.

It's not studies, so do the test yourself and you will figure out very quickly I guess that the a couple seconds.

I'm here can make a big difference, especially for people who started out was essentially zero I'm just a few days after surgery, where they lose one side itself there are peripheral or less the boss system.

It was very that yet that's a that's very helpful. And then just moving to Ams to a one you have a little more clarity on what the timing would be for I guess the eye in the filing and initiation of the phase two.

Yes, so since we have here quite a few common elements between a 125 and two or one.

We are seeking the best way forward.

To coordinate between these two Oh 40, I. Indeed, now the 125 program here will come.

Completes enrollment as indicated by the end of Q1 next year and in the second quarter, we expect to have the data.

With tool one what is the Particulary T. Here, we will need specific talks data.

Ways.

Better tasting and Olanzapine, given concomitantly and so that will require here some extra testing in a talk study so we'll need to complete that and coordinate that with our aim 125, so basically the tool one hi, Andy could.

Happened earlier, so we have been guiding for Q1, but we will seek to have maximum synergies between the two programs.

So the plan is for both programs well to start than next year, what's the next study phase.

Okay Wonderful and then yeah, sorry to make you guys repeat yourself, but just.

I want to make sure I have it correct on the.

How how much money was raised via the ATM and the equity line.

During this period and how much do you.

How much do you have remaining under those facilities.

Okay, So as Oh Amar mentioned.

We have.

So far used approximately 11% under the ATM.

So the ATM in total that's on file for 25 million and we have also above 11% off the equity line, which is 10 million.

So there is a lot of room still left now in the.

The second half of the current year.

So Omar mentioned, we have raised 2.1 million.

Under these two instruments and in addition, we.

In addition, we have this convertible loan from five T for ultimately are medico.

And is that 2.1 million included in that 11% figure.

Yes.

Okay. Yeah, that's fine Okay wonderful that those are all my questions.

Thank you very much for taking them.

Okay Youre welcome. Thank you Max.

Thank you once again to those who wish to ask a question. Please press star and wanting your telephone.

There are no further questions at this time please continue.

Okay. Thank you operator, and thanks to everyone for joining todays call.

As always please.

Please remember take care of your years and now we'll have to wait at well also off your nose. Thank you and have a great day bye bye.

Thank you that does conclude their conference for today. Thank you all for participating you may all disconnect.

[noise] [noise].

[music].