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Auris Medical Provides Business and Strategy Update and Reports First Quarter 2018 Financial Results
- Expansion of intranasal betahistine program into mental health supportive care
- Initiating project AM-201 for the treatment of histaminergic receptor mediated weight gain and drowsiness in patients treated with antipsychotic medications
- Positive scientific advice from EMA on development plan and regulatory pathway for AM-111
"Obesity and related metabolic disorders are major issues in the treatment of mental illnesses like schizophrenia or bipolar disorder, arising largely as adverse side effects from the use of antipsychotic drugs", commented
"We are very excited to launch the development of intranasal betahistine for mental health supportive care indications", stated
As the Company focuses on advancing its AM-125 and AM-201 programs with intranasal betahistine, it plans to move forward with its late-stage programs AM-111 for the treatment of acute inner ear hearing loss and AM-101 for the treatment of acute inner ear tinnitus through strategic partnering and with non-dilutive funding. In line with this strategy, the Company is reducing the level of operating expenses, which we believe will result in a further and marked reduction of the cash burn rate.
Development Program Updates
AM-125 for Vertigo
- Completed oral dosing arm of second Phase 1 clinical trial in healthy volunteers. The first part of the study with administration of escalating doses of oral betahistine up to 384 mg has been completed. Pharmacokinetic data from this part are expected to provide further support for bridging to existing safety data with oral betahistine. In the second part of the study intranasal betahistine will be administered to determine the maximum tolerated dose with single and repeated dosing and generate additional data on bioavailability in humans. An earlier single dose Phase 1 clinical trial with intranasal betahistine up to 40 mg had shown a relative bioavailability which was 20-40 times higher compared with plasma levels in an independent Phase 1 clinical trial with oral betahistine at 3 x 48 mg/day. Results from the second Phase 1 trial are expected to become available in the third quarter of 2018.
- Initiated preparations for Phase 2 clinical trial in vertigo. The Company is planning to start a randomized controlled Phase 2 trial in patients suffering from acute surgery-induced vertigo towards the end of 2018. The preparations will include, among others, discussions with health authorities for validation of the study design, additional toxicology testing, as well as further pharmaceutical development work.
- Expanded patent estate related to betahistine. The Company acquired two US patents related to the use of betahistine for treating weight gain induced by the antipsychotic drug olanzapine - US patent 7,728,015 "Compositions for weight management" and US patent 7,737,165 ''Methods of reducing weight gain associated with olanzapine treatment".
AM-111 for Acute Inner Ear Hearing Loss
- Reported the publication of a peer-reviewed review article entitled "Preclinical and clinical otoprotective applications of cell-penetrating peptide D-JNKI-1 (AM-111)" in
Hearing Research, one of the leading journals in the otorhinolaryngology field. The publication reviews AM-111's mechanism of action, pharmacokinetics and therapeutic applications.
- Received positive Scientific Advice (Protocol Assistance) from the
European Medicines Agency(EMA) related to the development plan and regulatory pathway for AM-111. The Scientific Advice had been requested by the Company following the results of the HEALOS Phase 3 trial. The Agency endorsed the proposed design for a single pivotal trial with AM-111 0.4 mg/mL in patients suffering from acute profound hearing loss design, the choice of efficacy and safety endpoints, as well as the statistical methodology. In addition, the EMA provided important guidance on the regulatory path forward and the maintenance of AM-111's orphan drug designation.
- Preparing for
FDAconsultation. The Company plans to request a Type C meeting with the FDAto discuss the development and regulatory path forward.
Keyzilen® (AM-101) for Acute Inner Ear Tinnitus
- Conducted in-depth analyses of full outcomes from the TACTT3 trial. On
March 13, 2018the Company reported that the study did not meet its primary efficacy endpoint of a statistically significant improvement in the Tinnitus Functional Index score from baseline to Day 84 in the active treated group compared to placebo either in the overall population or in the otitis media subpopulation. Further investigation of the trial's outcomes confirmed these preliminary results. The Company believes that the lack of separation between the active- and placebo-treated groups may be due to certain elements of the study design and conduct.
- Evaluating next steps with AM-101. Given the strong unmet medical need and in view of the positive data from non-clinical studies, two Phase 2 trials and the two open label AMPACT trials, the Company is assessing measures to address the issues arising in both TACTT trials and how best to advance the program.
- Regained compliance with the minimum bid price requirement for continued listing on the
Nasdaq Capital Marketfollowing a "reverse share split" at a ratio of 10-for-1 of the Company's common shares effectuated through the consummation of the merger with a wholly-owned subsidiary, effective March 13, 2018. At the end of the first quarter 2018 the Company had a total of 6,117,388 common shares outstanding.
- Renewed the equity line with
Lincoln Park Capital, LLC(LPC). On May 2, 2018, the Company entered into a new equity line for up to $10 millionwith LPC. The previous equity line with LPC had been terminated upon the Company's merger with one of its subsidiaries in order to effect the reverse share split.
- Made an early repayment in
April 2018of $5 millionprincipal amount outstanding under a loan and security agreement with Hercules Capital, Inc.In return, the agreement was amended to remove the liquidity covenant of $5 million. The repayment will reduce the Company's annual interest expense by more than $0.5 million.
First Quarter 2018 Financial Results
- Cash and cash equivalents at
March 31, 2018totaled CHF 12.7 million. In January 2018the Company effected a direct registered offering of 12.5 million common shares at a price of $0.44per share, which resulted in net proceeds of CHF 4.6 million.
- Total operating expenses for the first quarter of 2018 were
CHF 4.3 millioncompared to CHF 7.4 millionfor the first quarter of 2017.
- Research and development expenses for the first quarter of 2018 were
CHF 2.9 millioncompared to CHF 6.0 millionfor the first quarter of 2017.
- General and administrative expenses for the first quarter of 2017 were
CHF 1.4 millioncompared to CHF 1.4 millionfor the first quarter of 2017.
- Net loss for the first quarter of 2018 was
CHF 1.7 million, or CHF 0.30per share, compared to CHF 8.4 million, or CHF 2.15per share, for the first quarter of 2017.
The Company continues to expect that its operating expenses in 2018 will be in the range of
Conference Call & Webcast Information
This press release may contain statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Loss
For the Three Months Ended
| THREE MONTHS
ENDED MARCH 31
|Research and development||(2,943,221)||(5,981,419)|
|General and administrative||(1,360,714)||(1,425,491)|
|Foreign currency exchange loss, net||(88,290)||(338,160)|
|Revaluation gain from derivative financial instruments||3,300,696||233,123|
|Loss before tax||(1,754,216)||(8,408,319)|
|Income tax gain||8,726||8,191|
|Net loss attributable to owners of the Company||(1,745,490)||(8,400,128)|
|Other comprehensive loss:|
|Items that will never be reclassified to
profit or loss
|Remeasurement of defined benefit liability, net of taxes of CHF 0.00||280,801||227,827|
|Items that are or may be reclassified to
profit or loss
|Foreign currency translation differences, net of taxes of CHF 0.00||15,135||19,925|
|Other comprehensive income,
net of taxes of CHF 0
|Total comprehensive loss attributable
to owners of the Company
|Basic and diluted loss per share||(0.30)||(2.15)|
|Average weighted number of shares outstanding, adjusted for effect of reverse stock split||
Condensed Consolidated Statement of Financial Position
|Property and equipment||229,450||252,899|
|Other non-current financial receivables||76,710||76,710|
|Total non-current assets||1,935,260||1,958,709|
|Cash and cash equivalents||12,653,690||14,973,369|
|Total current assets||13,855,724||15,867,563|
|EQUITY AND LIABILITIES|
|Foreign currency translation reserve||(17,912)||(33,047)|
|Total shareholders (deficit)/equity attributable to owners of the Company||(1,413,670)||(2,162,209)|
|Derivative financial instruments||1,019,813||1,836,763|
|Deferred tax liabilities||170,083||178,809|
|Total non-current liabilities||7,339,535||9,562,839|
|Trade and other payables||1,355,721||1,200,820|
|Total current liabilities||9,865,119||10,425,642|
|Total equity and liabilities||15,790,984||17,826,272|
 The overall design of that trial is described in Barak et al. (2016), Journal of Psychopharmacology 30(3): 237-241.
 1.25 million shares at a price of
 Loss per share for first quarter 2017 adjusted for subsequent reverse stock split.
Source: Auris Medical AG