Altamira Therapeutics Ltd.
Q4 2015 Earnings Call Transcript

Published: 14 Mar 2016

[Operator:]

Good day and welcome to the Full Year Results 2015 Conference Call. At this time I would like to turn the conference over to Cindy McGee. Please go ahead.

[Cindy McGee:]

Thank you Jeremy and thank you everyone on the call for joining. On behalf of Auris Medical, I would like to welcome everyone to our fourth quarter and full year 2015 earnings call. I am Cindy McGee, Head of Investor Relations and Corporate Communications at Auris Medical. With me are Thomas Meyer, Auris Medical Chairman and Chief Executive Officer; Sven Zimmermann, Chief Financial Officer; and Bettina Stubinski, Chief Medical Officer. Earlier today we issued a press release for the fourth quarter and full year 2015 results and a business update. The release is available on our website aurismedical.com. We also filed this press release with the SEC earlier today. 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 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 decision 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 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, the prospectus dated May 14, 2015 relating to our Registration Statement on Form F-1 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 over to Thomas.

[Thomas Meyer:]

Thank you, Cindy. Good morning to our listeners in the US and good afternoon to our listeners in Europe. On today's call we are pleased to provide a business update and discuss our fourth quarter and full year 2015 financial results. I will begin with a brief overview of our recent highlights. Our lead program AM-101, for the treatment of acute inner ear tinnitus has made significant progress. We have had a strong recruitment rate over the past few months and are very close to completing enrollment in the TACTT2 Phase 3 trial, which is primarily being conducted in North America. This is inline with our previous guidance, TACTT3, the European counterpart is expected to complete enrollment a few months later. We are very excited by AM-101s potential to become the first in class treatment for acute inner ear tinnitus. The TACT trials have generated a lot of interest among tinnitus patients and in the ENT community. For example in the US each week we currently have more than 1000 visits to our study website tinnitus-study.info. Also AM-101 is expected to be indicated only for the treatment of certain types of tinnitus, this confirms the high unmet medical need in this condition. As we are getting closer to the readout from the Phase 3 trials, we are increasingly focusing on preparations for regulatory submissions in the US and Europe, as well as on pre-commercial activities, including scaling up the manufacturing process and developing the branding for AM-101. We also made significant progress with AM-111, our second late stage product candidate for the treatment of acute sensorineural hearing loss. In November of last year, we initiated the first pivotal trial called HEALOS. The second pivotal trial called ASSENT is on schedule to initiate in the middle of this year. We continue to receive positive feedback on AM-111s unique profile from the ENT community. Just last month we had the opportunity to host an investor event, featuring a key note presentation by Dr. Adrien Eshraghi of Miami. The event highlighted the unique properties of AM-111, such as the broad spectrum of otoprotectants, spanning various types of acute cochlear injury or its rapid transfer into the cochlea and fast and broad distribution bearing [ph]. In addition, it looked at the clinical management of acute sensorineural hearing loss, as well as the lack of effective treatment. The West Texas [ph] event is available on Auris Medical's website and I can recommend to those who would like to gain a good overview of the disease and of the pre-clinical and clinical development of AM-111. Before I turn call over to Bettina, to provide a more detail overview of the AM-101 of AM-111 clinical programs, I would like to highlight some recent hiring’s. We can report two new additions to the Auris Medical team. We have appointed Andrea Brown, as Head of Regulatory and Quality Affairs, a Member of the Executive Management Committee. In this newly created position, Ms. Brown will lead our Regulatory Affairs, Quality and Pharmacovigilance activities. She will join us in the coming months from Alvotech, where she has been the Head of Global Regulatory Affairs Biologics, prior to Alvotech, she spent 15 years in various regulatory affairs functions at Roche becoming head of EU Regulatory Affairs in 2013. In addition, we have appointed Cindy McGee, as Head of Investor Relations and Corporate Communications. In this newly created position, Cindy will direct and expand our communication activities and relationships with the investment community and media. Cindy previously held positions with Arena Pharmaceuticals, including as Vice President, IR and Aliance Management with LiagEN Pharmaceuticals and has spent several years advising Life Science companies through her work at Investor Relations and Communications agencies, we are very pleased to welcome and Andrea and Cindy to the team. On the other side, it is with great regret that I inform you that Bettina Stubinski will be leaving Auris Medical for personal reasons by the end of this year. Bettina has been our Chief Medical Officer and a key member of our management team since 2013. She will however continue to oversee the ongoing development programs and make her transition following the readout from both TACT trials. We respect Bettina's position, wish her the best of luck with her move and thank her for her commitment to the completion of the AM-101 Phase 3 program. A search for Bettina's replacement has been initiated. Bettina will now provide a further update of our clinical programs, and Sven will continue its presentation by reviewing the financial results. With that, let me pass over the call to Bettina.

[Bettina Stubinski:]

Thank you, Thomas. So concerning the first Phase 3 program AM-101, I am very pleased to be able to communicate that in TACTT2 in patients with tinnitus, we will screen the last patient tomorrow and that will conclude recruitment by randomizing the last patient this month. The TACTT2 trial is being conducted primarily in North America and under the special protocol assessment with FDA. We expect to have the last patient visit before the end of second quarter and as a consequence top line results of TACTT2 to become available in August. In the European TACTT3 study approximately 80% of Stratum A patients with acute tinnitus and approximately 90% of Stratum B patients with post-acute tinnitus have been randomized. With two Stratum A studies enrolling a total of 630 patients which is twice as many patients at TACTT2. So we expect to complete enrollment of TACTT3 a few months of after TACTT2 is for the enrolled and that to expect to have results available in the fourth quarter of this year. With the results of these studies coming up, we are also continuing with a preparation of the submission for AM-101. The second Phase 3 program AM-111 for acute sensorineural hearing loss is now well underway. So this program comprises two pivotal randomized, double blind and placebo control trials, HEALOS and ASSENT, targeting patients suffering from severe to profound idiopathic sudden sensorineural hearing loss. Patients in both trials are randomized to either AM-111 at 0.4 milligrams per ml, AM-111 at 0.8 milligram per ml or placebo in a 1

[Sven Zimmermann:]

Thank you, Bettina. So with regards to all financial results, this information has been prepared using a very same accounting policies and methods of computation as compared with the most recent annual financial statements. The financial statements are presented in Swiss francs, the company’s functional and presentation currency and all amounts here are in Swiss francs unless otherwise specified. Please note that the exchange rate for the Swiss franc and the US dollar is currently a rough 1

[Thomas Meyer:]

Thank you, Sven. Before concluding, I wanted to inform you about our annual general meeting which will take place in Zurich on April 8th. The agenda for the AGM, as well as the financial statement for 2015 financial year are available on our website in the Investor Relation section. At the meeting we will propose the re-election of our current members of the Board of Directors and proposed the election of Mr. Armando Anido. Armando Anido currently serves as the Chairman and CEO of Zynerba Pharmaceuticals. Prior to joining Zynerba, he served as CEO of NuPathe, where he led the company through FDA approval of a transdermal path from Migraines and sale of the company to Teva. Before joining NuPathe, Armando Anido served as CEO at Auxilium Pharmaceuticals, where he led the company in the commercialization of testosterone gel and through the FDA approval and commercialization of an injectable collagenase for Dupuytren's contracture. He has also held commercial leadership roles at MedImmune, Glaxo Wellcome and Lederle Labs. We are delighted to propose the election of Armando Anido to our Board of Directors with more than 35 years of experience in the pharmaceutical industry. He has built an excellent track record as an executive with strong operational and commercial expertise in therapeutic areas that share many similarities with the otology field. In summary, I am very pleased to say that we achieved significant progress with our development programs in 2015, bringing us closer to the completion of the pivotal AM-101 tinnitus trials and advancing the late stage AM-111 hearing loss program. We look forward to a productive 2016 with the following upcoming milestones. Completed enrollment of the AM-101 TACTT2 trial this month, initiation of the AM-111 ASSENT trial in the middle of this year, completed enrollment of the AM-101 TACTT3 trial a few months after TACTT2. Top line results from the TACTT2 trial in August 2016 and top line results from the TACTT3 trial in the first quarter of 2016. Moving forward, please note that we plant to provide recruitment updates when the trials are 50% and 100% enrolled. In closing, we look forward to the upcoming results of our Phase 3 and AM-101 program initiating the second of our Phase 3 AM-111 trials and attaining further progress towards our ultimate goal of providing effective and safe in a earlier therapeutics for patients. With that, I would now like to turn the call back to the operator, who will open the line for questions,

[Operator:]

Thank you. [Operator Instructions] We are now going to take the first question from Serge Belanger from Needham. Please go ahead. Your line is open.

[Serge Belanger:]

Hi, good morning. First like to welcome Cindy to the conference call. I guess, first question for Thomas, now that you've updated timelines for TACTT2 and TACTT3, can you give us I guess, a little more color on when you could file the NDA, would it be in early '17 or late '17 events?

[Thomas Meyer:]

Good morning, Serge. Thank you for the question. So the current plan is well, first we will first take a very close look at the TACTT2 outcomes. Now if these outcomes will be very robust, we will take them and have the pre-NDA meeting with the FDA to discuss the path forward. I mean, there are two questions or major questions, one is well, the TACTT3 trial result, they are relevance and importance relative to TACTT2, also with regards to timing and the second point is about the AMPACT data which will support the filing for TACTT2 or for AM-101 in general, but which will not be part of the label. So if the data are very robust for TACTT2, under certain scenario, we might go for a submission let say, at the churn from 2016 to 2017, if the feedback from the FDA will be rather to wait for the TACTT3 data, well obviously we will talk about a submission that will take place probably three to four months later, so here we would talk about filing around April 2017.

[Serge Belanger:]

Okay. And then just a couple of questions on the open label AMPACT trials, if I recall the patients are eligible to receive additional cycles of treatment, is there a specific number of treatments they are eligible to receive and could that give you a readout of the efficacies of multiple cycles?

[Bettina Stubinski:]

So the AMPACT study is allowing up to three additional treatments of cycles. Now we have to be aware that these studies are open label, single arm studies. So we are not comparing – we do not have any comparator in these studies. These were requested by the FDA – well, the FDA requested to have additional safety information because they recognized the potential for repeated administration in these type of patient population. So the main objective is the collection of additional safety and not additional efficacy. Of course we will be looking at efficacy outcomes, but we won't be able to make any claims in terms of efficacy.

[Serge Belanger:]

Okay. Thank you.

[Operator:]

We are going to take our next question from Joseph Schwartz from Leerink Partners. Please go ahead. Your line is open.

[Unidentified Analyst:]

Thank you. Hello, everyone. This is Brad in for Joe, this morning or its afternoon for you. Have two questions, one I wanted to highlight that we were anticipating the TACTT2 readout in the second quarter, so in light of this modest [indiscernible] hoping you can talk a little bit qualitatively about our confidence in both the trial design and the trial conduct proven at to this point? And then secondly, I would like for you to please review for us what endpoints we can expect to hear readout from TACTT2 in August of this year and specific focus on the how statistics will work in regards to the primary and co-primary efficacy endpoints, as well as the safety endpoints and how that all will come together, as far as which of these endpoints need or need not to be statistically significant in isolation or in combination for the trial to be considered successful? Thank you.

[Thomas Meyer:]

Okay. Good morning. I will take the first part of the question and Bettina will talk about the endpoints. So this is a slight fine tuning of here of the timelines, we always guided for completion of enrollment during Q1. So we are inline here, I mean, it always a little bit the question okay, really the readout be possible at the end of Q2 or will it fall into rather the Q3 panel. It will be in August and so therefore this is a slight delay here. So we are very confident in the overall design that we have chosen, you know, this has been the result of an extensive discussions with both the FDA, as part of the SBA process, as well as of scientific advice that we will receive from DEMA. I think that overall, the trials here they showed some positive outcomes in the sense that we have a very good safety trends so far, we also had lower than expected dropout rates. So I think that conduct here that has been very positive. Now with regards to the endpoints, I will ask Bettina to comment on those.

[Bettina Stubinski:]

Right. So as a reminder, the endpoints in TACTT2 and TACTT3 are same endpoints that we are accepting, change in tinnitus loudness and into the tinnitus loudness questionnaire and the change in tinnitus functional index. And these are the two main endpoints which was studied. Now in TACTT2 maybe under a special protocol assessment in place, the FDA had requested that we look at these two endpoints and co-primary endpoints in TACTT3 the tinnitus loudness questionnaire is primary endpoint and the tinnitus functional index is our main secondary endpoint as we see it with the EVA [ph] We still in very nice margin both in terms of pre- tinnitus effect and the fact side, so both endpoint and we have had the study of - post studies at 90% statistical path. As Thomas just mentioned we have a very low dropout rate compared to our assumptions in the studies that we had originally. So we are well powered with these studies. In terms of safety I think Thomas already mentioned also that we haven’t seen any new signals compared to Phase 2. So there no surprises in the studies to data that is come out of the Phase 3 program. So we don’t expect any surprises there. Doest that answer your question?

[Unidentified Analyst:]

Thank you. It does, but pardon my ignorance and hoping you can clarify. Will does each of the primary – does the primary and the primary endpoint in TACTT2 individually needs to reach statistical significance and be then ultimately be combined to reach – to be considered successful or there is some effect, way in which they are combined into an aggregate statistical analysis, where it maybe individually they don’t have to reach at statistical – level of statistical significance as opposed to combined of this, I was just hoping you can clarify that for me?

[Thomas Meyer:]

Okay. I'll take this one. So both the reduction in tinnitus loudness and the reduction in the overall tinnitus functional index core have to come out significant at level of 5%. So that’s the set up of the testing here. So we have to co-primary it, but there is not let say, composite endpoint or what so ever there just classic co-primary endpoint. And just to give you a little bit of background here on the choice, we have the early agreement with both agencies that the tinnitus loudness has a direct measure of the tinnitus symptom that is let say, very straight forward for tinnitus's patients to answer that a reduction here in the symptom is to translate or have to translate into a reduction in the tinnitus impact or the tinnitus burden. And so this impact is measured by the tinnitus functional index. So in a sense the clinical meaningfulness of the reduction in tinnitus loudness that will be demonstrated by the reduction in the tinnitus functional index.

[Unidentified Analyst:]

Okay. That’s really helpful. And lastly will there be statistical analysis provided around the primary safety endpoint or knowing the readout that we speculated this year?

[Thomas Meyer:]

Well, the primary safety endpoint to that is the occurrence of clinically relevant healing deterioration, well, these data will also be provided, we still need to be determined at what time point, but for sure they will also be revealed.

[Unidentified Analyst:]

Okay. Great. Thank you all very much. I appreciate taking my question.

[Thomas Meyer:]

Thank you.

[Operator:]

Thank you. We are ready to take our next question from Liisa Bayko from JMP Securities. Please go ahead. Your line is open.

[Liisa Bayko:]

Hi. Good morning, good afternoon. Thanks for taking the question. Just wanted to enquire a little bit about your current cash, so this year you'll end with cash I guess that means in '17 you'll have $13 million to $20 million to expand, does that include any commercial belts [ph] or what assumptions are you making with respect to what you'll be doing in 13 FDI TACT trials and data positive?

[Sven Zimmermann:]

Sure. Hi, Liisa, it’s Sven. So as you noted our cash flow for 2016 will be a TACT higher than in 2015. The main reason is we are wrapping the TACT as well as the AMPACT study. We are initiating ASSENT. We are randomizing the first patient by the middle of this year. So all of that is going to lead to a slightly higher cash burn in 2016. We are not assuming any meaningful investment into our commercial or pre-commercial assets. So when we say our cash run rate is going to last, to fall in 2017 than this is basically covering the clinical cost to continue - the complete the trial program AM-101 and finance all of the HEALOS trial and past finance the ASSENT trial. So we haven’t made any more specific comments on what our next funding step are going to be, obviously it will depend on the these data readout for TACTT2 for TACTT3. So for the moment we are assuming just continued in that clinical trial program.

[Liisa Bayko:]

And can you just remind us the review cycle, will it be partly review or is just the number of new cycle at, just want to remind of that for tinnitus program? Thank you.

[Thomas Meyer:]

Hi, Liisa. This is Thomas. So we are currently expecting a one year cycle. We will see whether we can expedite this knowing that this would be a first in class product. So that will be submitted. So potentially that could be shortened and well, at this point we still would have an expectation of 12 months.

[Liisa Bayko:]

Okay. Thank you.

[Thomas Meyer:]

Thank you.

[Operator:]

Thank you. As there is no further questions, that we conclude today's Q&A session. I will like now to turn the call over to Thomas Meyer.

[Thomas Meyer:]

Okay. So thank you very much, operator. And thanks to everyone for joining us for this call today and your interest in Auris Medical. Have a great day. And as usual take care of your ears. Thank you very much.

[Operator:]

Thank you. That should conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.