Altamira Therapeutics Ltd.
Q2 2018 Earnings Call Transcript

Published: 15 Aug 2018

[Operator:]

Good day, and welcome to the Auris Medical Second Quarter 2018 Financial Results and Business Update Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to CFO, Hernan Levett. Please go ahead, sir.

[Hernan Levett:]

Thank you, operator, and thanks to everyone on the call, for joining. I am Hernan Levett, Chief Financial Officer of Auris Medical. With me today on today’s call is Thomas Meyer, Auris Medical’s Chairman and Chief Executive Officer. Earlier today, Auris Medical issued a news release with the second quarter 2018 financial results and a business update. The release is available on the company’s website, aurismedical.com and filed with the SEC. During today’s call, we will 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, our strategy 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 utility of our product candidates, the timing or likelihood of regulatory filing and approvals, 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 would like to hand the call over to Thomas.

[Thomas Meyer:]

Thank you, Hernan. Good morning to our listeners in the U.S., and good afternoon to our listeners in Europe. Welcome to our second quarter earnings and business update call. I would like to start the call with a brief overview of recent key developments at Auris Medical. Over the past weeks and months, we took important steps to reposition our company. We have refocused our strategy on developing intranasal betahistine for vertigo and mental health supportive care; both are areas of great unmet medical need. Betahistine is already very well-known outside the U.S. as one of the most widely prescribed treatments for vertigo. However, its clinical utility has been held back by the poor bioavailability of the currently available oral formulation. Various preclinical and clinical studies have also demonstrated how betahistine can counteract weight gain induced by olanzapine, one of the most frequently prescribed antipsychotic drugs. With our nasal spray formulation, we are effectively addressing the low bioavailability of oral betahistine. And with this, we expect not only to capture a substantial slice of the existing betahistine market in vertigo, but also to establish an interesting franchise in mental health supportive care and, last but not least, bring betahistine also to the important and untapped U.S. market. As part of the strategic repositioning of the company, we intend to move forward with our late-stage programs in acute inner ear hearing loss and tinnitus through strategic partnering and/or with non-dilutive funding. We have adjusted our internal resources accordingly and started the process to identify and target appropriate partnering and funding opportunities. As a result, our expenditure levels have decreased significantly. This, together with the recent equity raise, has strengthened our financial position. For our program update, I will start with our AM-125 project. As you know, we are developing AM-125 for the treatment of acute vertigo that is the illusion of movement when there is actually none. Earlier this year, we started a second Phase I trial in healthy volunteers in order to extend and complement the data on pharmacokinetics, safety and tolerability from the first Phase I trial. The study has three parts, of which the first two have already been completed. We tested single oral betahistine doses up to 384 milligram, which is eight times the maximum approved daily oral dose. This data will provide further support for bridging to existing safety data with oral betahistine and serve as reference for relative bioavailability. We then tested single intranasal betahistine up to 60 milligram, which exceeded the maximum dose tested in the previous study. We are now nearing completion of the third part, where we are testing escalating doses of intranasal betahistine three times a day for three days. We expect data from the trial in early October. The Phase I trial here will generate important additional data for our intranasal betahistine development program. In the next step, we are planning to conduct in 2019 a randomized controlled Phase II trial in patients suffering from acute surgery-induced vertigo. Preparations for the trial are in full swing. They do include a scientific advice procedure with the European Medicines Agency, EMA, for the validation of the study design as well as feedback on the overall development program. We expect EMA’s feedback in fall of this year. Recently, we were very pleased and encouraged to see further evidence for dose-dependent effects of betahistine and confirmation for the relationship between bioavailability and therapeutic benefits published in Frontiers in Neurology, which is the second most-cited open-access journal in clinical neurology. In a peer-reviewed article by Tighilet and colleagues, it was shown that a higher dose of betahistine administered to cats following acute loss of unilateral vestibular function resulted in faster improvement of acute symptoms than with a lower dose. It also accelerated significantly the recovery process. As can be seen from the graph on this slide, the surgical resection of the vestibular nerve on one side led to an immediate loss of postural control by the animal. The surface delimited by the four legs of the cat while standing on a support greatly increased in response to the animal’s loss of vestibular function. This is representative of vertigo. Over time, as you can see, the support surface became smaller again and postural control was regained. Treatment with betahistine, 2 mg/kg both reduced acute symptoms following the surgery and accelerated the recovery of the animal’s balance in a statistically significant way compared to controls. This improvement was also more pronounced than in animals treated with 0.2 milligram per kilogram only. It also further showed that it was associated with a significant increase of histaminergic activity in the hypothalamus and substantially higher bioavailability in blood plasma. These results by Tighilet and colleagues are highly relevant for our development program with AM-125. As mentioned, we will enroll in the planned Phase II trial patients with acute vertigo following surgery. As shown previously by another research group, betahistine improves vertigo-related symptoms and accelerates vestibular compensation in humans. The great contribution of Tighilet and colleagues is that for the very first time, they demonstrated the correlation between administered dose, betahistine concentration in blood plasma and therapeutic effects. This vindicates our strategy of developing intranasal betahistine for higher bioavailability and therapeutic benefits compared to oral betahistine. In May of this year, we announced the expansion of our intranasal betahistine development program beyond the treatment of vertigo into mental health supportive care. Under project code AM-201, the company will develop intranasal betahistine for the prevention of weight gain associated with the treatment of olanzapine in schizophrenia and bipolar disorder. Obesity and related metabolic disorders are major side effects of olanzapine. The treatment with olanzapine often also results in drowsiness or somnolence, which can be very unpleasant for patients. Although olanzapine is considered one of the most effective antipsychotic drugs, certain treatment guidelines no longer recommend the drug for first-line use due to its major side effects. It is well-known that histamine plays a key role in the brain’s regulation of food intake, and it is also well-known that olanzapine acts as a potent antagonist at the H1 histamine receptor. Preclinical and clinical studies conducted by other parties have been demonstrated a key role for the histamine 1 receptor in olanzapine-induced weight gain and betahistine’s capacity to counteract olanzapine’s effect at this receptor through competitive inhibition. In the first step, we are planning to conduct a randomized placebo-controlled proof-of-concept Phase I trial in healthy volunteers. The trial will evaluate the safety, pharmacokinetics and pharmacodynamic effects of AM-201 in coadministration with olanzapine. The design will be similar to that of a trial conducted by the company Obecure a few years ago with oral betahistine, which provided evidence for betahistine’s capacity to prevent weight gain. We have launched preparations and expect the trial to start in early 2019. It will provide us with some early proof-of-concept in antipsychotic-induced weight gain. In order to support the AM-201 development program, we have assembled a great Scientific Advisory Board. Its members are shown on this slide, and they include

[Hernan Levett:]

Thank you, Thomas. Before reviewing our financial results for the second quarter of 2018, I would like to note that the financial statements are presented in Swiss francs. To help you with interpreting the financials, please note that the U.S. dollar and the Swiss franc are currently trading essentially at a rate of 1

[Thomas Meyer:]

Thank you, Hernan. We had several important milestones in the past few months and we have several more ahead of us. As mentioned, we are approaching the conclusion of the dosing in our second Phase I trial with AM-125. Top-line results are expected for early October. Still in the third quarter, by around the end of August, we expect to obtain feedback from the FDA on the development and regulatory path forward with AM-111. Further regulatory feedback is expected on the AM-201 program, which we plan to advance first in the U.S. through the pre-R&D with the FDA in fall. In parallel, we will receive the feedback from the EMA on the AM-125 program. With all this regulatory feedback, we expect to have further development plans and strategies for AM-111 and the two intranasal betahistine programs clearly mapped out. Before the turn of the year, we plan to submit our request for approval of the two clinical trials which are planned for 2019, namely

[Operator:]

Thank you. [Operator Instructions]. We will take your first question from Juan Serrate from Edison. Please go ahead. Your line is open.

[Juan Serrate:]

Hello guys. Good afternoon, from London. Thanks for taking my questions. So, my first question is on the AM-125 product. So you mentioned you – you’re expecting the scientific advice from the EMA during the fall. I wanted to know, I mean, what’s your kind of potential design of this Phase II trial?

[Thomas Meyer:]

Okay. Hi, Juan. The design that we have planned consists of two parts. So the first part of that Phase II will consist of dose – ranging dose escalation part. So we will test five different doses against the placebo, determine the dose response, then look at the data and decide then which two doses, together with placebo, will be taken into the second part, which will then test the three doses that is high, low and placebo in parallel. And the patients, yes…

[Juan Serrate:]

No, no. Sorry. Go ahead please.

[Thomas Meyer:]

Okay. So, the patients that we are going to enroll are patients who underwent surgery for the removal of a tumor behind the inner ear, which is called vestibular schwannoma. So as a consequence, as a result of this surgery, they’re losing their vestibular function. And so they are, first, in the intensive care unit and so they are unable to stand or walk. And afterwards, there is some vestibular compensation recovery, and that will take months up to one year or even longer. We have data that show, well, both in preclinical models and also some early data from clinical, smaller clinical study that betahistine here has actually achieved a very nice acceleration of that vestibular recovery in this setting of surgery.

[Juan Serrate:]

All right. How long will it take the entire trial to complete, more or less?

[Thomas Meyer:]

Yes. So, patients will be treated for four weeks and then followed for another two weeks. So, in total, those are six weeks and while we expect to have the first patient in the first quarter and then to complete and have the last patient out by the end of the year.

[Juan Serrate:]

Okay. Thank you very much. And then second kind of similar question on AM-111. So according to your interactions with EMA, what would be the potential design size, endpoint, et cetera, of this pivotal trial?

[Thomas Meyer:]

Well, the pivotal trial would look very, very similar to the HEALOS trial, where we had the readout last November. There will be only small changes. Well, we would enroll, obviously, only patients suffering from profound acute hearing loss. And we would treat them with 0.4 or placebo. We estimate that we would enroll approximately 140 patients.

[Juan Serrate:]

140, all right. So, that’s all. Thank you very much guys.

[Thomas Meyer:]

Okay. You’re welcome. Thanks.

[Operator:]

[Operator Instructions]. It appears there are no further questions at this time. I would like to turn the conference back to you for any additional or closing remarks.

[Thomas Meyer:]

Okay. Thank you very much, operator and thanks to everyone for joining the call today and your interest in our company. I wish you a great day and as always, take care of your ears. Thank you, and goodbye.