Cindy McGee - Head of Investor Relations and Corporate Communications Thomas Meyer - Chairman and Chief Executive Officer Sven Zimmermann - Chief Financial Officer Bettina Stubinski - Chief Medical Officer..

Serge Belanger - Needham Liisa Bayko - JMP Securities.

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..

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..

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..

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 1:1:1 ratio. The HEALOS trial, which is being conducted in 80 sites across several European and Asian countries, began recruiting in November 2015 and has enrolled approximately 15% of the target number of 255 patients.

In case of insufficient hearing recovery after one week, which means less than 10 decibel improvement from baseline patients would have the opportunity of receiving an optional reserve therapy with the course of oral corticosteroids.

Now the primary endpoint is that absolute improvement of pure tone average in decibels from baseline to day 28, based on the average of the three most affected contiguous audiometric test frequencies. The ASSENT trial, which will be conducted in the US and Canada and South Korea, is scheduled to initiate in mid-2016 and will enroll 300 patients.

We have selected all key vendors and are currently conducting trial site assessment. It is plan to involve around 80 sites in the study of which three quarters will be in the US. Unlike HEALOS this trial will provide oral corticosteroids as background therapy.

Primary endpoint is the absolute improvement of pure tone average in decibels from baseline to date 91 based on the average of the three months affected contiguous audiometric test frequencies.

And as a reminder, AM-111 has been granted orphan drug designation from both the FDA and its European counterpart with EMA for the treatment of acute sensorineural hearing loss. With that, let me pass the call on to Sven for his financial update..

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 1:1.

Our research and development expenses increased from CHF17.7 million in the 12 months ending December 31, 2014 to CHF26.5 million in the 12 months ended December 31, 2015.

The increase is primarily due to higher clinical expenses related to the progression of our AM-101 Phase 3 clinical development program, as well as the preparation and initiation of the first trial in the AM-111 Phase 3 program.

General and administrative expenses decreased from CHF4.5 million in the 12 months ended December 31, 2014 to CHF4.3 million in the 12 months ended December 31, '15.

The decrease was primarily related to higher legal and auditing expenses in relation to the IPO preparation in Q1 2014, partially offset by the expenses related to our most recent follow-on offering in May 2015 and higher public listing expenses.

With regards to our net financial income and expenses, as you will recall from our last earnings call we have decided to provide additional detail on the respective financial line items and are differentiating between interest income, interest expense and by far the most important contributor, net foreign currency exchange gains or losses.

During the year 2015 we recorded a net unrealized foreign exchange gain of CHF1.2 million, whereas we had recorded a gain of CHF4 million in the year 2014. Remember the higher gain in 2104 is at least partially due to the stronger appreciation of the US dollar against the Swiss franc compared to 2015.

In the fourth quarter of 2015, as well as in the fourth quarter of 2014, the US dollar appreciated against the Swiss franc and we therefore recorded again an unrealized foreign exchange gain of CHF1.3 million and CHF1.6 million for the respective periods.

The reported net loss for the 12 nine months of 2015 was CHF29.7 million, compared with CHF18.2 million in the same period of 2014, corresponding to a net loss per share of CHF0.92 versus CHF0.66.

The reported net loss for the fourth quarter of 2015 was CHF5.5 million compared with CHF4 million in the same period of 2014, corresponding to a net loss per share of CHF0.16 versus CHF0.17. Please note that the number of share outstanding was higher for the fourth quarter of 2015 due to the follow on offering in May 2015.

So from today's perspective we assume that our operating expenses for the full year 2016 will be in the range of CHF33 million to CHF38 million. Our cash and cash equivalents as of December 31, 2015 was CHF50.2 million compared to CHF56.9 million at the end of December 31, 2014.

The decrease in cash is essentially the net result of the cash inflow from our following offering in May '15 on one hand and the operating expenses during the year 2015 on the other. Our current cash position should allow us to finance operations until the fall of 2017.

With that, I would now like to turn the call back to Thomas who will conclude our presentation and open the line for question..

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,.

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..

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?.

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..

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?.

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..

Okay. Thank you..

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

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..

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..

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?.

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?.

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..

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?.

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..

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

Thank you..

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

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?.

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..

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..

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..

Okay. Thank you..

Thank you..

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..

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..

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