Altamira Therapeutics Ltd (CYTO) 2020 Q4 法說會逐字稿

Good day, and thank you for standing by. And welcome to the Auris Medical to Provide Business Updates on AM-301 Program Call. (Operator Instructions) I must advise you that this call is being recorded today, Tuesday, the 13th of April 2021. (Operator Instructions)

And earlier today, Auris Medical issued a news release announcing preclinical and clinical outcomes with AM-301 and detailing plans for market launch. The release is available on the company's website aurismedical.com and filed with the SEC.

During today's call, Auris Medical 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 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 cause -- that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements. These risks are -- these risks and uncertainties include but are not limited to the timing and conduct of the company's clinical trials, the clinical utility of its products and product candidates, the timing or likelihood of regularity (sic) [regulatory] filings and approvals, the company's intellectual property position and its financial position as well as those described in the Risk Factors section in the company's annual report on Form 20-F and future filings with the Securities and Exchange Commission.

In addition, any forward-looking statements represent Auris Medical's views only as of today and should not be relied upon as representing the company's views as of any subsequent date. While the company may elect to update these forward-looking statements at same point in the future, it specifically disclaims any obligation to do so even if its views change.

With that, I would like to hand the call over to Thomas Meyer. Please go ahead, sir.

Thank you, operator. Hello, everyone, and thank you for taking the time to join our business update call which is dedicated to the AM-301 program. We are very excited and proud about this program, which was concocted during the first COVID-19 lockdown and launched nearly 7 months ago. Since then, we have made great progress on our way towards the launch of a safe, effective and affordable nasal spray for protection against airborne viruses and allergens. With our highly dedicated team at Auris Medical and in close collaboration with great external service providers, we have been going at full speed. Half jokingly, I have called it our own Operation Warp Speed.

During this call, I will first provide a brief description of AM-301 before moving on to discussing the new preclinical and clinical data in allergy and viral infection. Following that, I will talk about our plans for the commercialization of AM-301 and the market potential for the product. Finally, we will open the call for any questions.

Moving to Slide 4, I will now present AM-301 a bit more in detail. Every day, you breathe in just over 2,000 gallons of air, a huge amount. About 90% of the air that you inhale enters the body through your nose, which makes it the main gate to your respiratory system. Apart from regulating the temperature and humidifying the air that you breathe before it enters the lungs, your nose has also the key function of cleaning it. There is a lot of undesired particle matter that you want to keep out: dust, animal dander, bacteria, viruses, fungi. The COVID-19 pandemic has provided us a painful reminder of the dangers that are floating in the air as inhalation of SARS coronavirus 2 has been identified as one of the major transmission routes.

Fortunately, your nose is equipped with some powerful defense mechanisms ranging from anatomical features, the nasal mucosa and mucus release down to the sneezing reflex. The mucosa acts as the protective barrier against particles. It secretes mucus which traps those particles. Thanks to the movement of tiny hairs, so-called cilia, the mucus, including particles, is cleared from the nasal cavities into the throat and eliminated by the digestive tract. A cross-section of the nasal mucosa is depicted on the slide underneath the nose picture.

Unfortunately, however, the mucosa's protective function may be compromised by injury, nasal dryness or irritation, for example, during winter time due to low air humidity or due to the use of certain nasal sprays. Also, it may be overwhelmed by the quantity or pathogenicity of inhaled particles. If a body is allergic to particles such as pollen and these particles are abundant to the point that mucus clearance is not enough, you may experience some allergic reaction and suffer from allergic rhinitis or hay fever or you may catch a viral infection such as influenza or COVID-19.

On to Slide 5. With the AM-301 nasal spray, we aim to complement and reinforce the body's natural defense to help mitigate the risks from exposure to airborne allergen and virus particles. AM-301 is based on a triple protective effect. By applying a thin protective layer on the nasal mucosa, a physical barrier is established that prevents inhaled particles from contacting the nasal epithelium by trapping inhaled particles through electrostatic effects, which are then cleared naturally with mucus from the nasal cavities into the throat and eliminated via the digestive track and by humidifying the nasal mucosa and thus aiding its functionality.

On to Slide 6. We have been developing AM-301 as a means for safe, effective and affordable self-protection in the face of risks from airborne viruses and allergens. We believe that AM-301 has several attractive features. First of all, it is more than just a physical barrier. Thanks to AM-301's electrostatic effects, it actively traps particles. A priori, any charged particle, whether virus, allergen or dirt, can be trapped in this way. The particles are then naturally removed together with the mucus.

A second key feature is the absence of any active pharmaceutical ingredient. AM-301 is drug-free. It has no pharmacological, metabolic or immunologic activity. Its effects are purely physical in nature. This is why it can be considered a medical device.

A third key feature is the absence of preservatives in the formulation. Preserving the health of the nasal mucosa is an important objective, especially for persons who are sensitive to airborne particle challenges. Commonly used preservatives and nasal sprays are well known to harm mucosal membranes and may provoke a stinging or burning sensation. We are using a special preservative-free nasal spray pump and employing a specific manufacturing process in line with our guiding principle of safety by design.

The fourth key feature is that AM-301 can help protect for at least 3 hours, which we consider as quite convenient. Even the best nasal spray is not of much help if it gets cleared rapidly from the nose and needs to be reapplied frequently. As mentioned, you have a very powerful cleaning mechanism inside your nose. We designed our formulation for extended nasal residence time. This is a gel emulsion that needs to be briefly shaken prior to use, making it liquid and suitable for spraying. Once it is applied into the nose, the liquid turns into a gel again.

We have filed 3 provisional patent applications to date. We will reveal more about the actual composition of AM-301 and its mode of action in due course. We have received quite a few inquiries about these things. I hope you understand that here, we cannot disclose everything at this early stage.

With that, we move on to Slide 7. Following the presentation of AM-301, I will now turn on to some fresh data that we have generated with the product and which we announced this morning. We recently completed the treatment phase of the first clinical trial with AM-301. Now this was an open-label, randomized, crossover study which enrolled 36 patients with allergic rhinitis to grass pollen. They received a single dose of AM-301 nasal spray or of a comparative product prior to entering a so-called allergen challenge chamber. In the chamber, they were exposed to controlled quantities of grass pollen in the air for 4 hours. The challenge was repeated with the alternate treatment following a washout period.

Study participants self-reported common symptoms of allergic rhinitis on the Total Nasal Symptom Score questionnaire or TNSS. I'm very pleased to report that preliminary analysis of the study outcomes show that AM-301 met the primary endpoint of non-inferiority in the TNSS relative to the comparator. In addition, the treatment was well tolerated. These results are key elements for obtaining market clearance. For example, for the planned 510(k) submission to the U.S. Food and Drug Administration, FDA, we will need to demonstrate substantial equivalents to a previously cleared similar device.

Furthermore, the study demonstrated a rapid onset and long durability of AM-301's protective effect as measured by a clinically relevant 1 point reduction in the TNSS to unprotected pollen exposure. On average, the protective effect was maintained for at least 3 hours. These clinical observations are in line with the results from a new in vitro study. We used the barrier diffusion model to evaluate for how long AM-301 could act as a barrier to grass pollen. The experiment was performed at 35 degree Celsius and 90% relative humidity to mimic conditions within the nasal cavity. The assay showed that a thin layer of AM-301 blocked grass pollen for up to 6 hours, the maximum duration of the experiment.

On to Slide 8 and turning to the use of AM-301 in viral infections. In early [December], we announced the remarkable results from a study in a model of human nasal epithelium cells infected with SARS coronavirus 2. This model allows for testing the of airborne infection and mitigation strategies under highly relevant conditions. The cell culture is based on live reconstituted tissues from human donors, physiologically relevant and even produces mucus.

Actually, the testing conditions are more challenging than in the human nose since there is no support available from the immune system and from the natural mucociliary clearance removing the particles into what normally would be the digestive tract. Yet, we could show in that model that AM-301 was highly effective in reducing the infectious viral titer when daily treatment was started right before inoculation of the cells with the virus. 72 and 96 hours post infection, average viral titers were over 99% lower than in controls.

Obviously, prevention is best especially when facing such a highly infectious and dangerous virus like SARS coronavirus 2. However, we were also interested in testing AM-301 when the infection was already running its course. We therefore repeated the experiment in the human nasal epithelium cell model but initiated daily treatment only 24, 30 hours past inoculation. Saline and vehicle-treated and untreated cell cultures served as controls. As expected, SARS coronavirus 2 replicated efficiently in control cultures over 4 days, resulting in a rapid increase in viral titer.

I'm very pleased to report that daily treatment with AM-301 even with the late start after 24, 30 hours resulted in an important and statistically significant deceleration of the viral titer growth compared to controls. The equivalent of the p-value was smaller than 0.01 in a linear mixed effects model. At day 4 of the experiment, viral titers were 73.7% to 94.5% times lower compared to controls.

On to Slide 9. As we are advancing with the development program, it was about time to give AM-301 finally a proper name. With this, I'm very pleased to introduce Bentrio to you today. We are convinced that Bentrio as a brand name conveys well our key message, a nasal spray that will do good by offering a means for self-protection. The trio on the name refers to the product's triple protective effects: barrier, trapping and humidification.

On to Slide 10. We look forward to bringing Bentrio to the market and making it available to consumers. With the ongoing progress in the development and testing, we are on track to meet in the coming weeks all essential requirements for marketing Bentrio in Europe under the so-called CE mark. CE marking indicates that a product has been assessed by the manufacturer and deemed to meet those essential European requirements.

We intend to launch the commercialization in selected European countries starting in June 2021, so that's fairly soon, employing various on- and off-line distribution channels. We expect to expand market coverage rapidly during the second half of 2021, including collaborations with future licensing partners. The expansion will be supported by significant scalable contract manufacturing capacity.

Once we will be ready for CE mark conformity, we expect to be ready also for the submission of the 510(k) application to the FDA. With this, we will request regulatory clearance for Bentrio in intended use in allergy. Regarding the intended use in viral infection, we continue to be engaged in a dialogue with the FDA on the applicable regulatory pathway. Last but not least, we are evaluating other countries and world regions as potential markets for Bentrio.

With this, let's move to Slide 11. With Bentrio, we are addressing frequent conditions and globally large markets. I think the numbers shown on this slide speak for themselves. Let's take allergies. About 8% of the U.S. adult population have hay fever. There are bit more than 11 million visits annually to physician offices with the primary diagnosis of allergic rhinitis. The market size for over-the-counter allergy medicines in the U.S. was about $4 billion in 2020.

For viral infections, the numbers are even higher. The human rhinovirus is the most common cause of upper respiratory tract infections. Revenues for cold and cough remedies in the U.S. are expected to exceed $12 billion in 2021.

Influenza has not been a big issue in this winter season, but this was very exceptional. Based on data from the U.S. Centers for Disease Control and Prevention, influenza resulted in 9 million to 45 million illnesses, 140,000 to 810,000 hospitalizations and 12,000 to 61,000 deaths annually since 2010.

And last but not least, there is the COVID-19 pandemic which has taken a massive toll. As of today, there have been more than 136 million cases and almost 3 million deaths very sadly. We believe that the key strengths of Bentrio is the versatility of its mode of action.

We have masks, we have social distancing, we have vaccinations. All these measures work and have their utility. All have their pros and cons. With Bentrio, we aim to provide an additional means that shall help us deal with all those particles in the air. There is increasing evidence about an important relationship between air pollution or pollen exposure and patterns of infection rates, which shows that clean air and a strong defense at the level of the nose matter a lot.

With that, I would...

(technical difficulty)

Okay. So somehow, I dropped out of the line. My apologies. So I guess -- well, you heard the end here of the presentation, and we could now open the line for questions. My apologies here for this interruption.

(Operator Instructions) Our first question comes from the line of Peter Wright from Intro-act.

Thomas, congratulations for the fantastic news.

Thank you, Peter.

My first question is what are the other prophylactics that high-risk patients are taking now to reduce the risk of COVID? And in light of that, is there a way that you're going to be able to fast track the 510(k) application? And then I have a follow-up on the back of that.

Yes. So we believe that Bentrio here is a complement for actually every day, day for day. I mean in the morning before you leave your flat or your house on your way to work, you may apply it in a preventative fashion, and we see this primarily as a preventive measure.

Now we see a potential based on the most recent data here that even when an infection already got started that we can have an impact here on the course of the infection. Obviously, that would need to be further confirmed, these data, but we see here a nice combination of prevention and potentially also therapeutic effect. So that's how we position this.

Now there are, of course, a lot of other treatments or approaches, methods available, and I think all of them have some type of utility. And we have such a problem here with the pandemic, so therefore, it's very important that we have a lot of tools, a lot of instruments actually at hand.

Now to your second question about the 510(k). So the 510(k) is -- as you know, it's already an abbreviated regulatory pathway where you can basically benefit from the fact that a similar device has -- was cleared some time ago. And what you need to demonstrate here is basically that you have a similar efficacy and also safety profile as this cleared device. And that process at a minimum will take 90 days. Now based on data that was published, on average, a 510(k) clearance takes about 5 to 6 months, something like that. So of course, we hope to go fast with that. Now this will be for allergy.

Now for the virus indication, since this is something quite new, there is actually no precedent with the FDA, and this is why we have engaged here with the agency in a dialogue here to find the appropriate path forward, what is the best way forward. Now as you know, there is also the emergency use authorization pathway that could potentially be available. So this is something that, of course, is also here a part of the picture.

For us, the main objective has been, well, to get ready here with the technical dossier with the submission documentation and all the data so that we can actually go for the CE mark in Europe and go for the submission in the U.S. So we have been going extremely fast, and of course, we want to really go fast also to the market here. And hopefully, we can have a good process, a very efficient process.

We are quite confident the product has a very good safety profile. Its components are all quite well characterized, that they have been around for some time. It's essentially the combination of formulation work that is the innovation that we have done here. So we very much look forward to going through that process with the FDA.

Wonderful. And then looking at it from the other side. My follow-up is your conversations with contract manufacturers. Are you approaching that differently in the U.S. and Europe? Are they separate providers you're working with? If you could explain the strategy there somewhat.

And then also, if you could comment on volume. How quick do you think you can ramp this to satisfy the market need?

Yes. So for the contract manufacturing, we are working here with a partner that is capable of supplying to the U.S. and to the European market. We have some additional capacity plans. Now the capacity can be ramped up quite quickly. We are talking here about very meaningful quantities that we can actually supply to the market.

So at this point, well, we prefer not to provide detailed capacity numbers. But -- well, as I can tell you, it's pretty significant, and we expect to ramp up here over the first couple of months in a very significant fashion.

Wonderful. I'll try and sneak one last one in, if I could. Any comments on pricing yet for this or still too early in the 2 markets?

Well, it's -- well, I mentioned it should be affordable, and I mean it by that. So it is something that is affordable for the public. This is going to be an over-the-counter product. So typically, this has to be paid out of pocket by consumers.

Now there are other products on the market. We believe that we have actually some nice features that would very well support here some premium pricing. We have not decided on the final pricing yet, but we really want to make it a success and affordable and accessible here to the bigger public.

Congratulations. Fantastic news, and the speed is amazing.

Okay. Thank you very much.

Our next question comes from the line of [Mark Holscher] from [Miller Street].

Good work on your progress so far. I do have one question. This would regard to more the allergy and the usage type of inhalants rather than viruses. But have you ever got any comparisons to nasal saline flushes as a baseline? They're not well tolerated obviously, and I'm sure your product would be much more tolerable. So do you have any contrast or any comments about the nasal saline flush method of removing antigens?

Yes. So this saline flushes, this irrigation, they definitely have -- they serve a purpose. However, I mean, what they do is very simple. I mean basically, you just try to get those particles washed out.

Now we have a different approach here because this is not to wash out. This is not very convenient, obviously. But rather, you have -- if you have a nose that is working properly, the nose is dealing with these particles, the cleaning around the clock. I mean it takes 15, 20 minutes, and then material is actually discharged and is gone.

Now what we are doing here is we are helping with this process. And we are not only protecting, covering the mucus -- the mucosa, but we are also trapping those particles. And I mean that's a key difference here to the saline irrigation, which is essentially just by force dilution, pushing in liquid and then bringing this out.

No, this is a more physiological way, if you like, more convenient. So it just helps you to remove these things in a way that -- how it goes normally, and that is you have this wonderful cleaning mechanism. We are helping with that. I hope this answers your question.

Yes, it does. Very good. Good luck in the future and just to hear more.

Okay. Thank you very much.

No further questions at this time. Please continue.

Okay. Thank you, operator, and thanks to everyone for joining this call. And my apologies about the interruption towards the end. So we are very excited about this program. We look forward to reporting further news.

And well, usually, I conclude by saying, well, take care of your ears. Well, of course, you should always take care of your ears. But please take care also of your nose, very important, especially in these times here in the pandemic. Thank you very much, and goodbye.

That does conclude today's conference. Thank you to everyone who has participated in today's call. You may now all disconnect.