Hernan Levett – Chief Financial Officer Thomas Meyer – Chairman and Chief Executive Officer.

Juan Serrate – Edison.

Good day, and welcome to the Auris Medical Second Quarter 2018 Financial Results and Business Update Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to CFO, Hernan Levett. Please go ahead, sir..

Thank you, operator, and thanks to everyone on the call, for joining. I am Hernan Levett, Chief Financial Officer of Auris Medical. With me today on today’s call is Thomas Meyer, Auris Medical’s Chairman and Chief Executive Officer. Earlier today, Auris Medical issued a news release with the second quarter 2018 financial results and a business update.

The release is available on the company’s website, aurismedical.com and filed with the SEC. 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, our strategy 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 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 our clinical trials, the clinical utility of our product candidates, the timing or likelihood of regulatory filing and approvals, 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, 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 would like to hand the call over to Thomas..

Dr. Nir Barak, the Founder and former Chief Scientific Officer of Obecure, the company I just mentioned. He did groundbreaking work with oral betahistine in olanzapine-induced weight gain. Further, Dr. Christoph Correll is a Professor of Child and Adolescent Psychiatry in Berlin.

He is a specialist in pediatric antipsychotic use, where weight gain is even more pronounced than in adults. Dr. John Kane, Professor and Chairman of Psychiatry at The Donald and Barbara Zucker School of Medicine at Hofstra/Northwell, New York. Dr.

Kane has also published extensively on the topic and has been involved in many drug development projects before. And last but not least, Dr. John Newcomer, Professor of Integrated Medical Science at the Charles E. Schmidt College of Medicine, Florida Atlantic University in Boca Raton, Florida. Dr.

Newcomer has been a pioneer in researching the cardio-metabolic risk of antipsychotic drugs. As a reminder, we also have a dedicated Scientific Advisory Board for our AM-125 program. Let me turn now to our AM-111 program. As a reminder, we are developing this intracellular peptide for the treatment of acute sensorineural hearing loss.

We received orphan drug designation for AM-111 in the U.S. and in Europe and also obtained Fast Track designation from the FDA. In November 2017, we had the readout from the HEALOS Phase III trial, where we saw a clinically meaningful and nominally significant improvement in the subpopulation of patients with profound acute sudden deafness.

These patients are the worst affected and have a high risk of no hearing improvement at all, so they remain deaf or essentially deaf.

We also learned from the trial that it takes a high severity of acute inner ear injury to trigger the JNK stress kinase, which is the target for AM-111 since lesser effect to patients did not seem to benefit from the treatment.

Earlier this year, we presented the HEALOS data to the EMA together with our development plan in order to obtain feedback through a scientific advice procedure.

In May, the EMA informed us that they endorsed the proposed design for a single pivotal trial with AM-111 0.4 milligram ml in patients sufferings from acute profound hearing loss, which is very encouraging. A few weeks ago, we requested feedback also from the FDA via Type C meeting.

We look forward to receiving the agency’s comments and guidance by around the end of this month. Meanwhile, we have started the process of engaging with various parties in discussions about the potential partnering of AM-111 to take the project to the finish line.

AM-111 has the potential to become the first approved drug for the treatment of acute hearing loss. The compound’s strong and persisting protective effects have been demonstrated in various models of acute inner ear injury and clinically in patients with the greatest therapeutic needs.

With this, I will now like to turn the call over to Hernan Levett for the financial update..

Thank you, Thomas. Before reviewing our financial results for the second quarter of 2018, I would like to note that the financial statements are presented in Swiss francs. To help you with interpreting the financials, please note that the U.S. dollar and the Swiss franc are currently trading essentially at a rate of 1:1.

The company’s net loss decreased from 4 point – CHF5.4 million or CHF1.22 per share in the second quarter of 2017 to CHF3.1 million or $0.50 per share in the second quarter of 2018. Our research and development expenses decreased from CHF4.7 million in the second quarter of 2017 to CHF2 million in the second quarter of 2018.

The reduction in research and development expenses was mainly driven by the completion of several of our Keyzilen and AM-111 trials, lower employee-related expenses and lower expenses related to drug manufacturing and regulatory affair activities.

Also, general and administrative expenses decreased from CHF1.2 million in the second quarter of 2017 to CHF1.1 million in the second quarter of 2018. Over the past few quarters, we have managed to reduce the level of our operating expenses significantly and aligned it with our strategy on focusing on the intranasal betahistine projects.

We expect that our operating expenses in 2018 continue to be in line with our previous guidance of CHF10 million to CHF12 million for the year. Our cash and cash equivalents at the end of the second quarter of 2018 were CHF4.4 million.

In April, we made an early repayment of $5 million under our loan facility with Hercules, which significantly lower the amount of the outstanding debt and will result in a reduction of interest payments of more than $0.5 million per year.

On July 17, 2018, we completed public offering of 17.9 million common shares with 60% warrant coverage for gross proceeds of $7 million. Senior management participated in the offering with an investment of $2 million. The net proceeds to us for this offering were approximately $6.2 million.

We believe that the addition of the net proceeds of the offering to our existing cash position will enable the funding of operations well into second quarter of 2019. With that, I would like to return the call back to Thomas, who will conclude our presentation and open the line for questions..

the Phase II trial with 125 in vertigo and the Phase I trial with 201 in olanzapine-induced weight gain. For both of these studies, we expect to have the first subjects enrolled in the first quarter of 2019.

The Phase I trial with 201 should then read out during the second quarter of next year, while the Phase II trial will continue through the end of the year. In conclusion, we feel that we made great progress with the repositioning and restructuring of our company.

We are very excited about the potential for both of our intranasal betahistine programs and are very encouraged by the warm reception that both AM-125 and AM-201 have been given so far by the medical community. We believe that these therapeutics will offer great therapeutic benefits to patients.

As for AM-111, we feel that we have a unique asset here and look forward to our further partnering discussions with the ultimate goal of making this potent drug available to patients who are at risk of permanent complete hearing loss following acute injury to their inner ear.

With this, I would now like to turn the call back to the operator, who will open the line for questions..

Thank you. [Operator Instructions]. We will take your first question from Juan Serrate from Edison. Please go ahead. Your line is open..

Hello guys. Good afternoon, from London. Thanks for taking my questions. So, my first question is on the AM-125 product. So you mentioned you – you’re expecting the scientific advice from the EMA during the fall.

I wanted to know, I mean, what’s your kind of potential design of this Phase II trial?.

Okay. Hi, Juan. The design that we have planned consists of two parts. So the first part of that Phase II will consist of dose – ranging dose escalation part.

So we will test five different doses against the placebo, determine the dose response, then look at the data and decide then which two doses, together with placebo, will be taken into the second part, which will then test the three doses that is high, low and placebo in parallel. And the patients, yes….

No, no. Sorry. Go ahead please..

Okay. So, the patients that we are going to enroll are patients who underwent surgery for the removal of a tumor behind the inner ear, which is called vestibular schwannoma. So as a consequence, as a result of this surgery, they’re losing their vestibular function.

And so they are, first, in the intensive care unit and so they are unable to stand or walk. And afterwards, there is some vestibular compensation recovery, and that will take months up to one year or even longer.

We have data that show, well, both in preclinical models and also some early data from clinical, smaller clinical study that betahistine here has actually achieved a very nice acceleration of that vestibular recovery in this setting of surgery..

All right.

How long will it take the entire trial to complete, more or less?.

Yes. So, patients will be treated for four weeks and then followed for another two weeks. So, in total, those are six weeks and while we expect to have the first patient in the first quarter and then to complete and have the last patient out by the end of the year..

Okay. Thank you very much. And then second kind of similar question on AM-111.

So according to your interactions with EMA, what would be the potential design size, endpoint, et cetera, of this pivotal trial?.

Well, the pivotal trial would look very, very similar to the HEALOS trial, where we had the readout last November. There will be only small changes. Well, we would enroll, obviously, only patients suffering from profound acute hearing loss. And we would treat them with 0.4 or placebo. We estimate that we would enroll approximately 140 patients..

140, all right. So, that’s all. Thank you very much guys..

Okay. You’re welcome. Thanks..

[Operator Instructions]. It appears there are no further questions at this time. I would like to turn the conference back to you for any additional or closing remarks..

Okay. Thank you very much, operator and thanks to everyone for joining the call today and your interest in our company. I wish you a great day and as always, take care of your ears. Thank you, and goodbye..