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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.

Corporate Developments

   -- 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.


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