Auris Medical Holding Ltd. (NASDAQ: EARS), a clinical-stage company dedicated to developing therapeutics that address important unmet medical needs in neurotology, rhinology and allergy and CNS disorders, today provided a business update and announced second half and full year 2020 financial results.
“The 2020 business year has been quite transformative for our company as we initiated the development of AM-301, a nasal spray designated for self-protection against airborne viruses and allergens,” stated Thomas Meyer, Auris Medical’s founder, Chairman and CEO. “With a highly dedicated team, we managed to develop in less than six months a drug-free nasal spray that reduced the SARS-CoV-2 viral titer in a model representative of the human nasal mucosa by more than 99%. The project has taken on strong momentum, and we look forward to making AM-301 available to consumers, starting towards the end of the second quarter 2021 in selected markets. With this, we expect to become a commercial stage company quite shortly.” He continued: “The project benefited greatly from our experience acquired with AM-125, our nasal spray for the treatment of acute vertigo. Here, we obtained last year promising interim data in our Phase 2 trial and expect the trial to read out in 2021. Last, but not least, we entered the new business year with a significantly stronger balance sheet, and strengthened our cash position further in the first quarter of 2021.”
Development Program Updates
AM-125 for Treating Acute Vertigo
-- Initiated Part B of TRAVERS trial. Following the positive results from the interim analysis in the Phase 2 trial with AM-125, including a dose dependent improvement in patients' performance of the "Tandem Romberg" and the "Standing on Foam" balance tests, the two highest doses, 10 and 20 mg, were selected by the Company to be tested against placebo in 72 patients in Part B of the trial. Enrollment into Part B started in October 2020. -- COVID-19 pandemic causing temporary delay in enrollment. Recruitment into the TRAVERS trial slowed down considerably in early 2021 as several study sites postponed elective procedures and temporarily reduced or suspended clinical research activities. Candidates for participation in the TRAVERS trial undergo certain types of neurosurgery, which are elective procedures. Recruitment rates recovered somewhat in March, but they may continue to be impacted for some time. Although sites are expected to catch up on enrollment once COVID-19 related restrictions are relaxed, the Company expects that results from the trial will become only available in the third quarter of 2021, at the earliest.
AM-301 for Protecting Against Airborne Viruses and Allergens
-- Initiated clinical investigation of AM-301 in allergic rhinitis. In January 2021, the Company announced the initiation of an open-label randomized cross-over study that will enroll 36 patients with allergic rhinitis to grass pollen. Study participants are administered a single dose of AM-301 nasal spray or a comparator product (one puff into each nostril) prior to controlled pollen exposure for four hours in an allergen challenge chamber. The challenge is repeated with the alternate treatment following a wash-out period. The difference in the Total Nasal Symptom Score (TNSS) between the two treatments over the 4-hour exposure will serve as the primary efficacy endpoint; the investigation shall demonstrate clinical non-inferiority of AM-301 to the comparator product. Results from the clinical investigation are expected to become available in a few weeks. -- Continued preclinical testing program. The Company has initiated or planned several in vitro and in vivo tests to generate additional data for the intended use in allergies and viral infection. These will assess, among others, the potential capacity of AM-301 reduce the viral titer post infection with SARS-CoV-2, the effects of AM-301 on some of the new virus strains as well as on other types of virus, and the durability of its barrier function against pollen. -- Advanced preparations for launch in selected markets late in the second quarter 2021. The Company expects to meet the requirements for CE marking, a prerequisite for commercializing AM-301 in Europe, in the second quarter of 2021 and is currently scaling up the manufacturing process for launch of the product in selected European markets towards the end of the quarter. In the US, the Company is engaged in a dialogue with the FDA on the proposed product development plan and the applicable regulatory pathway. The Company continues to expect that AM-301 will be eligible for clearance through the 510(k) pathway for the intended use in allergy.
-- Retained full control over Altamira Medica affiliate. The Company increased the share capital of Altamira Medica Ltd. ("Altamira"), its affiliate dedicated to developing and commercializing AM-301, from CHF 0.5 to 3 million to accommodate the progress of the program. A convertible loan of CHF 1.5 million to Altamira was converted in two steps in shares of Auris Medical Holding Ltd., allowing the Company to retain full control of its affiliate. -- Raised CHF 16.6 million (gross) in equity. The Company significantly strengthened its balance sheet and cash position through several transactions in December 2020 and March 2021. These included the placement of 2,000,000 common shares with certain institutional investors at an offering price of $4.00 per share as well as the exercise of 2,161,280 warrants held by the investors in the May 2019 offering at an exercise price of CHF 4.34. All warrants issued through the May 2019 Offering have been exercised by now. -- Continued strategy review. In September 2020, the Company's Board of Directors started a process to explore, review and evaluate a broad range of potential strategic alternatives with the aim of unlocking the potential of the Company's assets and maximize shareholder value. In this context, the Board has been holding discussions with several parties about certain potential transactions. At this point, there can be no assurance the Company's strategy review will result in the completion of any particular course of action, and there is no defined timeline for completion of the review process.
Second Half 2020 Financial Results
-- Total operating expenses for the second half of 2020 were CHF 2.9 million compared to CHF 3.2 million for the second half of 2019. -- Research and development expenses for the second half of 2020 were CHF 2.0 million compared to CHF 2.0 million for the second half of 2019.1 -- General and administrative expenses for the second half of 2020 were CHF 1.1 million compared to CHF 1.1 million for the second half of 2019. -- Net loss for the second half of 2020 was CHF 5.5 million, or CHF 0.75 per share, compared to CHF 3.0 million, or CHF 0.83 per share, for the second half of 2019. -- Cash and cash equivalents at December 31, 2020, totaled to CHF 11.3 million.
Full Year 2020 Financial Results
-- Total operating expenses for 2020 were CHF 5.3 million compared to CHF 7.3 million for 2019. -- Research and development expenses for 2020 were CHF 2.9 million compared to CHF 3.3 million for 2019.1 -- General and administrative expenses for 2020 were CHF 2.6 million compared to CHF 3.9 million for 2019. -- Net loss attributable to owners of the Company for 2020 was CHF 8.2 million, or CHF 1.36 per share, compared to CHF 6.6 million, or CHF 2.28 per share, for 2019.
The Company expects its total cash needs in 2021 to be in the range of CHF 11.5 to 13 million for expected total operating expenses of CHF 7 to 7.5 million and expected capitalized research and development costs of CHF 4.5 to 5.5 million. Further cash needs may arise in 2021 related to the manufacture of AM-301 as well as marketing and sale activities as the Company intends to commercialize the product in selected markets; these cash needs may initially not be covered by cash flows from product revenues.