Michael Wood - IR Thomas Meyer - Chairman and CEO Thomas Jung - Chief Development Officer Hernan Levett - CFO.

Serge Belanger - Needham and Company.

Thank you for everyone for joining the call today. With me on today’s call are Thomas Meyer, Auris Medical’s Chairman and Chief Executive Officer, Thomas Jung, Chief Development Officer and Hernan Levett, Chief Financial Officer.

Earlier today, Auris Medical announced the top line results from the HEALOS trial and issued a news release with a business update for the third quarter 2017 financial results. The two press releases are available on the company’s website, aurismedical.com and filed with the SEC.

During today’s call, the company 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 on the company’s 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 risks, developments and business decisions to differ materially from those contemplated by these statements.

These risks and uncertainties include, but are not limited to, the timing and conduct of the company’s clinical trials, the clinical utility of product candidates, the timing or likelihood of regulatory filings and approvals, intellectual property position, the company’s financial position, as well as those described in the risk factors section in the annual report on 20-F and future filings with the SEC.

In addition, any forward-looking statements represent the company’s views only as of today and should not be relied upon as representing these views as of any subsequent date. While the company may elect to update these forward-looking statements at some point in the future, they specifically disclaim any obligation to do so, if their views change.

With that, I like to turn the call over now to Thomas Meyer, CEO..

Thank you, Michael. Good morning to our listener in the US and good afternoon to our listeners here in Europe. We have some important news to share with you today. Earlier this morning, we announced the main outcomes from our Phase 3 HEALOS trial with AM-111.

With HEALOS, we have been breaking new grounds in clinical hearing research and this has been the first Phase 3 trial ever in the field to test the compound for treating acute hearing loss.

Although the trial did not meet our expectations for the primary efficacy endpoint in the overall study population, we were very pleased to report a clinically and statistically significant treatment effect in the profound hearing loss subpopulation. These are patients with an ear that suddenly becomes almost or completely deaf.

They are facing a poor prognosis for recovery and therefore have the highest unmet medical need. As to date, there exists no approved or off label drugs for treating acute hearing loss effectively. Before reviewing the HEALOS trial outcomes more in detail, let me first summarize the key features of AM-111.

We are developing this compound for treating acute inner ear hearing loss. Most often, this takes the form of sudden deafness, which is a sudden loss of hearing without any known origin. Frequently, some vascular problem or infection is suspected to be the cause.

AM-111 aims to provide acute auto protection that is protecting inner ear to preserve functional hearing. AM-111 contains the cell penetrating peptide, brimapitide, which blocks the JNK stress kinase. JNK plays a key role in the loss of inner ear sensory cells and inflammation following acute injury.

By inhibiting that stress kinase, AM-111 protects stress injured sensory cells and allows them to recover and remain functional. Brimapitide is formulated in a hyaluronic acid gel formulation for single dose administration into the middle ear of patients.

Recognizing the unmet medical need, we received orphan drug designation for AM-111 from both the FDA and EMA. In addition, we received fast track designation from the FDA. In the HEALOS trial, we tested AM-111 in a single dose and at the concentration of 0.4 milligram per ML to confirm the positive results from a Phase 2 trial at this level.

In addition, we included 0.8 milligram per ML in the exploratory sense. We recruited patients suffering from unilateral sudden deafness within the first 72 hours after onset and with severe to profound hearing loss.

These were patients whose hearing thresholds were at least 60 decibels at the worst affected adjacent test frequencies and who had an acute hearing loss of at least 40 decibels compared to their unaffected ear.

We offered all study participants who did not show any meaningful improvement by day seven a course or oral corticosteroids as a reserve therapy. Steroids are frequently used off label to treat acute hearing loss, notwithstanding the lack of proof and efficacy.

The primary efficacy endpoint for the HEALOS trial was the improvement in hearing from baseline to day 28. The statistical analysis was based on an ANCOVA model with repeated measures. To control for multiplicity, the alpha level was split with 0.04 allocated to the 0.4 milligram ML dose and 0.01 to the 0.8 milligram ML dose.

The total duration for HEALOS participants was 91 days. Follow-up visits were scheduled at days 3, 7, 28 and 91. Based on the Phase 2 trial with AM-111, we expected that about 90% of hearing recovery were achieved by day 28, thereafter, only slight further improvement was expected.

In the HEALOS trial, we enrolled a total of 256 patients through 51 participating sites in ten European and Asian countries. The modified intention-to-treat analysis set comprised 240 patients. This set includes all patients with at least one past treatment hearing measure. A slight majority of the patient population was male.

The mean of the worst affected hearing thresholds was 86 decibels. In more than 80% of patients, there was also acute tinnitus. All of these baseline patient characteristics are similar to those observed in a Phase 2 trial. Overall, patient characteristics appear well balanced across the treatment groups.

I've mentioned before our expectations for the primary efficacy endpoint were not met for the overall patient population. While the hearing improvement in both AM-111 treatment groups was numerically higher than in the placebo group at all time points, the difference was not statistically significant.

Compared to the Phase 2 trial, we observed a higher improvement in the placebo group in HEALOS. As we analyzed the data further, it became quickly clear that the severity of hearing loss at baseline had a key impact on trial outcomes.

From our preliminary post-hoc analysis, we saw a clear split in outcomes between the subpopulation of patients with severe acute hearing loss and those with profound acute hearing loss.

Based on a commonly applied scale for grading hearing loss severity, profound means a hearing threshold of 90 to 120 decibels and severe means 55 db, up to 89 decibels. To illustrate what a profound hearing loss mean, these stations for example have always trouble on the standing conversational speech, even when using a hearing aid.

Without the hearing aid, they are unable to detect even the loudest components of shouting. The subpopulation of these profound hearing loss patients, that is all those who are almost or completely deaf on one year at baseline accounted for about 41% of the overall HEALOS study population.

Here, in this group, the post-hoc ANCOVA showed a statistically significant improvement of the AM-111 0.4 milligram ML group versus the placebo group at day 28 and also day 91 with p values of less than 0.02 in both cases.

The treatment effect reached 15.9 and 16.7 decibels at these two time points, which was clearly above the threshold for clinical significance. As a reminder, decibel measures are not linear, but logarithmic and a 10 decibel change means that sound is twice or half as loud as before.

In the subpopulation with severe acute hearing loss, we did not observe a separation from placebo. We are excited about this clinically and statistically significant improvement in the subpopulation of profound hearing loss.

Looking at the improvement from baseline over time, we can see the separation of the two active treated groups from placebo becoming significant by day 28. Following this, the size of the treatment effect remains about stable to day 91.

When relating the total improvement in the AM-111 0.4 milligram ML group of almost 48 decibels over those 91 days to the initial hearing loss, it amounts to approximately 50%, which we consider a very meaningful change. Our expectations for the safety of AM-111 were fully met in the HEALOS trial.

The incidence of clinically meaningful hearing deterioration from baseline to day 28, the primary safety endpoint was low, was no statistically significant differences between treatment groups. In addition, the frequency of treatment emergent adverse events was low for all treatment groups with the majority of adverse events being mild.

Also, the number of serious adverse events was low and all cases were considered unrelated. Taken together, these outcomes showed that AM-111 is as safe as expected from previous studies and further confirmed the favorable safety profile of the drug.

In conclusion, we have seen in the HEALOS trial a clinically and statistically significant improvement in hearing in the well defined subpopulation of patients with profound acute hearing loss. That is in those patients with the greatest need for protective treatment.

Further, we have seen again the 0.4 milligram ML dose perform best and we have seen maintenance of the treatment effect after one month. In addition, we gathered further insights into the natural history of sudden deafness. The analysis of the HEALOS results are still ongoing as we digest a wealth of data.

At this point, I would like to sincerely thank all patients, investigators and study side stuff participating in HEALOS for their dedicated contribution to the trial.

In a next step, we plan to review the data from the AM-111 program and in particular also HEALOS outcomes with regulatory agencies and discuss the next steps on our path to bringing AM-111 to patients.

As highlighted by the orphan drug designations or the fast track designation, acute inner ear hearing loss represents a serious condition and an important unmet medical need.

With regards to ASSENT, the currently ongoing sister trial to HEALOS, we will terminate this study early since the protocol appears no longer adequate based on the new outcomes from HEALOS. With this, I will now turn the call over to Thomas Jung for an update on the ongoing development programs..

Thank you, Thomas. As I already reported a few weeks ago, we achieved a major milestone with AM-111 and that our second phase 3 trial is now fully enrolled. We recruited a total of 741 patients, of which 373 patients suffered from acute inner ear tinnitus, meaning in the first three months from tinnitus onset.

368 patients suffered from post acute tinnitus that is they joined the trial 3 to 12 months from the onset. We look forward to seeing the top line results from this trial, which are currently expected for February 2018.

We are also pleased to report that the safety data from the previous TACTT2 trial have been published in Otolaryngology-Head and Neck Surgery, one of the leading peer reviewed medical journals in our field. Let me briefly summarize the status of AM-125.

We have completed the transaction with Otifex Therapeutics, which includes the acquisition of non-clinical and clinical assets, formulation and intellectual property rights. We have also obtained additional data from an undisclosed third party to complement our package of non-clinical and clinical data.

We recently presented the therapeutic concept at the annual AAO meeting in Chicago, which was well received. We have completed our regulatory interactions with the FDA and two EU agencies, providing input for our development program.

As a result, we will initiate a second Phase 1 trial in the first quarter of next year, aiming to determine the maximum tolerated dose with single and repeated dose administration as to fully explore the PK profile of betahistine and its medical rights. I will now turn the call over to Hernan for the financial update..

Thank you, Thomas. Before reviewing our financial results for the third quarter of 2017, I would like to note that our financial statements are presented in Swiss francs. The company’s net loss decreased from CHF7.9 million or CHF0.23 per share in the third quarter of 2016 to CHF6 million or CHF0.14 per share in the third quarter of 2017.

Our research and development expenses decreased from CHF6.3 million in the third quarter of 2016 to CHF4.2 million in the third quarter of 2017.

The reduction in research and development expenses was mainly driven by the completion of several Keyzilen trials, lower employee related expenses and lower expenses related to drug manufacturing and regulatory affair activities.

General and administrative expenses increased from CHF1.2 million in the third quarter of 2016 to CHF1.3 million in the third quarter of 2017. The increase was due to higher administration costs, partly offset by lower employee benefit related expenses.

Last but not least, I would like to highlight that we expect our operating expenses in 2017 to be lower than our previous guidance of CHF28 million to CHF32 million. And that existing cash and cash equivalents will enable the funding of operations in to the second quarter of 2018.

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

Thank you, Hernan. Before coming to the conclusions, I want to update you on an upcoming change in the leadership team. Thomas Jung, our Chief Development Officer who is also on the call here has decided to leave the company by the end of the year to pursue a new career opportunity.

We would like to thank Thomas for his great contributions to Auris Medical and wish him well in his future endeavors. We have several important milestones flying ahead of us. In the first quarter 2018, we will announce the top line results from the TACTT3 trial with Keyzilen.

This drug has the potential to become the first treatment for acute inner ear tinnitus. During that quarter, we will also initiate the second Phase 1 trial with AM-125, our intranasal betahistine program. In the second quarter 2018, we expect to have discussions with the major regulatory health agencies on the regulatory pathway for AM-111.

The AM-125 Phase 1 trial is expected to read out during the quarter and we expect to file an IND for AM-125 at around that time. A Phase 2 trial with AM-125 is currently expected to start in fall 2018.

In closing, I'm pleased to say that we continue to make good progress on our way towards bringing therapeutic options to patients suffering from major neuro otologic disorders such as tinnitus, hearing loss and vertigo.

The HEALOS data showing significant benefits in profound acute hearing loss are a great milestone and illustrate the potential for our novel targeted compounds. We look forward to making further great steps forward. With that, I would now like to turn the call back to the operator who will open the line for questions..

[Operator Instructions] We will now take our first question today which comes from Serge Belanger calling from Needham and Company..

A couple of questions on these HEALOS results, Thomas, can you talk about maybe the path forward from here.

Do you go back to Phase 2 and what additional changes to the protocol do you envision in the next future trials for this program?.

Well, as I mentioned, the plan is to complete the analysis here of the data from HEALOS and together with all the other data that we have, also from the Phase 2, the great number of non-clinical studies, plus additional data from the ASSENT trial has accrued to now and to discuss the program and these results with the regulatory agencies, the EMA and also the FDA.

When we look at the program, I think we have here very clear series of outcomes. So in the Phase 2, we could show in the severe to profound hearing loss group a very nice effect with a 0.4.

In the current trial, we could not show for the total population, the same thing, but we could show actually a more pronounced effect even for the profound population. So as it turned out here, we have more of a placebo increase than previously seen in Phase 2 and we understand now from the additional data that this is one of the key drivers.

So here, we have a very well defined patient population. We have clear outcomes, objective outcomes. We have a clear biology behind all of that.

We have a safe drug and we have a very clear unmet medical need and I mean those patients, when you talk with clinicians, they will tell you that, well, these are exactly those patients who are most in need of this product.

So we can, at this point, of course not speak for regulatory agencies, what the actual requirements, further requirements may be. We believe that we have already accumulated very substantial body of evidence that AM-111 is not only safe, but also efficacious.

And we plan to present this to make the case here for AM-111 and have discussion with the agencies on how to bring this to patients..

And then are you still comfortable with bringing the two doses that we’re evaluating in HEALOS and maybe can you talk about the impact of the reserve therapy, prednisolone that was administered after day 7 I believe..

Yes. So for us the 0.4 milligram per ML, those years, that’s the second time that we saw this coming out best. So we feel this is the right dose.

We have already done some analysis here on the reserve therapy to what we have seen so far does not suggest that the reserve therapy has any impact on outcomes as previously seen in the Phase 2 and as also reported in the literature..

[Operator Instructions] The next question today will come from [indiscernible]..

I just have a question about, it's a multi-part question. Can you guys elaborate on AM-125 with regard to when the trials are starting? I think you mentioned sometime next year.

And also where you obtained subjects for the trial and if you can provide some detail to what the numbers might look like in terms of potential revenues for the Vertigo related balance and maybe vestibular disorders around the world? I don't know if anybody on the call really understands how widespread that this order is. Thank you..

So I will have Thomas Jung provide some information on the development program. The numbers, I will take care of those..

Yes. So very briefly, so we expect to start the Phase 1 trial directly in March, March or April.

This should be actually a very small trial that can be conducted relatively quickly and based upon those data in particular, the pharmacokinetic data, we expect that we can initiate the Phase 2 trial then later this year and probably in quarter four of 2018.

The second trial is expected to enroll in roughly 80 to 100 patients and we’ll test a number of different dosings in this trial and most likely we will conduct the trial predominantly in Europe..

Okay. And with regards to the numbers, well, we can relate here to several indicators, obviously. So betahistine, which is the active substance here widely used around the world here in about 115 countries from the treatment of Vertigo to date probably more than 150 million patients have been treated with this.

The product is not officially available or approved in the US. It’s currently available only through compounding pharmacies or from Canada. We know that there are large numbers of Meniere’s patients, more than 600,000 in the US. There are more than 1 million emergency room visits here for dizziness or vertigo per year in the US.

So vertigo is a very, very common problem and I mean you probably know that innovation here has been very minimal over the last few decades and we believe here with betahistine, that is widely popular around the world but actually suffering from one major shortcoming and that is low viability.

Here with the nasal route, we can actually achieve much better therapeutic concentrations or plasma exposure.

So the Phase 1 that is planned now will actually provide us with important additional information that will be key essential here for dose selection, for Phase 2 and so we think we have here also based on the input from the regulators, we have now a very clear understanding on what to do with this program..

[Operator Instructions] At this time, there are no questions in the telephone queue. [Operator Instructions] And there are no questions over the telephone. I have no further questions on the telephone line. I would like to turn the call back to the speakers for any additional remarks..

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