The European Medicines Agency has validated Auris Medical’s design for a new phase 3 trial, mapping out an approval pathway for its acute hearing loss treatment, AM-111, and giving the company hopeful news after the drug failed in a clinical study late last year.

Auris requested protocol assistance and scientific advice after the HEALOS trial—which, while missing its primary endpoint of improving hearing in 28 days compared to placebo, did show gains with a lower dose in a post hoc subgroup of about 100 patients with profound, acute deafness.

These patients were initially nearly or completely deaf, and normally would have poor prognoses for recovery, Auris said in a statement. The EMA endorsed Auris’ proposed protocol, endpoints and statistical methodology, and the agency’s Committee for Medicinal Products for Human Use provided additional guidance on maintaining the drug’s orphan designation.

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Auris plans to request a similar meeting with the FDA very soon, according to founder and CEO Thomas Meyer, and the company has scheduled a development update May 15, alongside its first-quarter earnings report. The FDA previously granted AM-111 fast-track status.

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The news follows additional phase 3 failures of Auris’ tinnitus candidate Keyzilen, which failed its second trial earlier this year. The company’s stock dropped 37% after attempts to salvage the development program and is currently trading at under $2.

HEALOS did meet its primary safety endpoint—but based on the lacking efficacy findings, Auris halted a separate, ongoing phase 3 study, named ASSENT, in November to avoid the need for protocol amendments. HEALOS had randomized 256 patients, suffering from severe to profound sudden deafness within 72 hours from onset, to receive AM-111 at 0.4 mg/mL, 0.8 mg/mL or placebo.

The Switzerland-based company said the subgroup findings in HEALOS are mostly in line with the same subpopulation in a previous phase 2 trial, and the pooled data demonstrates statistically significant improvements in hearing at 28 and 91 days compared to placebo. In addition, Auris expects data from 31 patients in the ASSENT trial to supplement its findings.

AM-111 (brimapitide) is a single-dose gel delivered to the middle ear that aims to inhibit the JNK stress kinase, which is activated following various types of cochlear injury, such as overexposure to noise, bacterial or viral infections, that can cause acute, inner-ear hearing loss.