Q1 2021 Aethlon Medical Inc Earnings Call

Good day and welcome to the plus another call first quarter fiscal 2021, the earnings corporate update conference call all participants will be in listen only mode.

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After today's presentation, there will be an opportunity to ask questions asked a question that press Star then one on your touched.

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So that's being recorded I would now like to turn the conference over to Jim Frakes, Chief Financial Officer. Please go ahead.

Thank you operator, and good afternoon, everyone.

Welcome to Alan Medicals first quarter 2021 earnings conference call My.

My name is Jim Frakes, Lime Alphonse Chief Financial Officer.

[music] at Fourq 15 PM Eastern time today.

That's one medical released financial results for its quarter ending June 30 2020.

If you have not seen or received Athlon medical's earnings release.

Leaves visit the Investor is page.

Www Dot Athlon medical Dot com.

Following this introduction and the reading of our forward looking statement.

That's one CEO Dr. Tim Rodale.

We'll provide an overview about one strategy and recent developments.

I will then make some brief remarks on Alphonse financials.

Well then open up the called for the Q a nice session.

Before I hand, the call over Dr. Rudelle. Please note that the news release today and this call contain forward looking statements within the meaning of the federal Securities active 1933.

And the Securities Exchange Act like in 34.

The company cautions you that any statement, but it's not a statement of historical fact is a forward looking statements.

These statements are based on expectations and assumptions as of the data This conference call.

Such forward looking statements are subject to significant risks and uncertainties and actual results may differ materially from the results anticipated in the forward looking statements.

Doctors that could cause results to differ materially from those anticipated and forward looking statements can be found under the caption risk factors and the company's annual report on form 10-K.

Fiscal year ended March 31, 2020.

And then the company's other filings with the Securities and Exchange Commission.

Except as may be required by law. The company does not in town nor does it undertake any duty to update this information to reflect future events or circumstances.

With that I will now turn the call over to Dr., Tim Rodela Aethlon medical CEO.

Thanks, Jim and thank you all for dialing yet.

I'd like to lead off with oncology and so first of all we're continuing to process of opening the clinical trial in head and neck cancer.

At the University of Pittsburgh as we noted in our last call. We have wire be approval you P.M.C. and the details of the trial as opposed to on clinical trials talk girls for those of you would like more information.

The last steps to open for patient accrual or in process right now and we hope to be enrolling patients. So I'm sure.

This initial early feasibility study, which is a device equivalent phase one study.

It's only the first step towards the evaluation of the Hemopurifier in head and neck cancer and also another cancer, specifically solid tumors.

And we're now building.

The later stage development plan as well as the quality of the manufacturing plants to support later stage development and ultimate commercialization if the hemopurifier.

Success, one clinical trials.

As we previously noted we have breakthrough designations both for oncology I'm in for life threatening viral infection. So these designations.

Vitesse with a clear and focus communication pathway with the FDA to expedite this process, assuming favorable favorable safety and efficacy data. So this is really sort of ongoing dialogue with the FDA.

And we can that our plans for future development going forward.

On a related from the company announced last week that we've received in collaboration with the University of Pittsburgh and other academic institutions.

Five year, approximately three and a half million dollar grant.

The National Institutes upheld.

Entitled Depleting Exosomes to improve responses to immune therapy in head and neck squamous cell carcinoma.

This grant on which Teresa White side, one of the world's foremost authorities on exosomes in cancer and Dr. enough Marlow, our senior director of research or co principal investigators and it will provide support for both bench studies on Exosomes in head and neck cancer using samples from our current clinical trial.

And they also provide some support for a follow on clinical trial. Upon successful completion of the current early feasibility study.

Now to move on to infectious disease as we previously disclosed the FDA has approved to supplement to our existing bar <unk> or investigational device exemption to allow for the treatment with the Hemopurifier booked 40 patients with Sars koby to cobot 19 disease.

Now up to 20 centers in the United States.

We're now identifying and recruiting these centers.

It was I think I noted during our last call the distribution of the pandemic, it's not static and we do not expect to open all 20 centers at once we're concentrating on the areas with large numbers of affected patients as you probably have read the northeast particular, New York's, particularly New York City in New Jersey.

Which along with Pacific Northwest Revpas fingers, initially and that quite a bit on but most severely affected areas now include Florida, Southern California, or corporate home turf.

In addition, the central United States now beginning to be affected so we're moving away from some of the coastal population centers and the the pandemic has now affecting centre is really all over the country.

Well identifying clinical trial centers and obtaining ever be approval and opening for patient accrual takes a bit of time.

There's another much faster pathway to treat individual patient tiny patients in an emergency situation, which is known as a single patient emergency use pathway, which formerly used to be known as compassionate use and it allows heat treating physician.

Request, an investigational product for patient who has essentially no other bible treatment options.

Under this pathway, we've recently treated one patient that stuff isn't tending position several daily Hemopurifier treatments and while we cannot say anything about efficacy based on a single case the treatment has been uneventful to date.

So I'll stop there and turn it back over to Jim for the financial discussion and then we'll open up for questions Jim.

Thanks, Tim and good afternoon again, everyone.

At June 30, 2020, we had a cash balance of approximately $15.7 million.

Our operating expenses for the three months ended June 30, 2020 were approximately $1.4 million.

Her to approximately $1.6 million for three months ended June 30 2019.

This decrease of approximately $200000 or 12%.

In the 2020 period.

Let's do a decrease in payroll and related expenses or approximately $170000 and then professional fees of approximately $43000.

Which were partially offset by an increase in general and administrative expenses of approximately $27000.

The 170000 dollar decrease in payroll and related expenses was due to the combination of a 242000 dollar production and stock based compensation expense.

And 73000 dollar increase and our cash based compensation expense.

The cash based compensation increase was in turn due to additions to our head count and to salary increases.

The 43000 dollar decrease in our professional fees was primarily due to a 22000 dollar decrease and our legal fees and a 22000 dollar decrease in our accounting fees.

The 27000 dollar increase in general and administrative expenses was primarily due to a 26000 dollar increase in our clinical trial expenses as we prepare for our plan chronic clinical trials.

Other expense during the three months ended June 30, 2020 consisted of interest expense and during the three months ended June 32019 consisted of interest expense and a loss on debt extinguishment.

Other expense for the three months ended June 30, 2020 were approximately $1000 compared to other expense of approximately $501000 for the three months ended June 30 2019.

The decrease in the 2020 period was the result of the payment in full in July 2019 of our then outstanding promissory notes.

As a result of the changes in revenues and expenses that I just noted our net loss, but before non controlling non controlling interest decreased to approximately $1.4 million.

The three months ended June 32020, or 15 cents per share from approximately $2.1 million for the three months ended June 32019, or one dollar and 63 cents per share.

In the month of June 2020, we raised additional cash through the sale of approximately 2.7 shares couple of common stock under our ATM facility.

On an average price of $2.70 per share of net proceeds.

We did not issue any warrants in this financing.

The aggregate net proceeds to us were approximately $7.3 million.

We were awarded a 1.9 million dollar phase two and see I contract last fall.

And as Dr. Bodell recently noted.

We are one of together with the University of Pittsburgh Medical Center.

A graph for studies I hadn't that cash cancer with a national Institute for tend to like Crane official research part of the NIH. We do intend to continue to apply for additional government graphs on contracts as sources of non dilutive funding.

We included these earnings results and related commentary in a press release issued earlier this afternoon.

That release included the balance sheet for June 32020.

On the statements of operations for the three months periods.

Ended June 32020 and 2019.

We will file our quarterly report on form 10-Q, following this call.

Our next earnings call will coincide with the filing of our quarterly report on form 10-Q in November.

I'll now, Tim and I would be happy to take any questions that you might have.

Operator, please open the call for questions.

Well now begin the question answer session Tester question that press Star then one on their touched shows hub.

Ladies and speakerphone, please pick up the headset before passing the kids. So withdraw your question. Please press Star then chip.

At this time, we'll pause momentarily so somebody else Sir.

Our first question will come from being pickled research. Please go ahead.

Hi, guys how are you.

Good I do.

Good.

So the.

Jim I Kinda I joined I didn't hear you were kind of referring to on the compassionate use cases, you said that the outcome is.

She said.

I think that's term I use yeah.

Okay, Okay, so I assume that there.

As a person.

Hi, I ask that question.

No I can't really give you any more detail about at what I can say because it's pretty much what I said first of all let me point out that under the federal regulations, the kinds of patients who are eligible.

For this type of emergency use or the sickest patients out there what I can say is that we've completed a number of hemopurifier treatments of the patient and you know I doubt it really doesn't make sense for me to go much beyond that what I will say however is that you know.

This gives us.

Obviously, the critical data for us to get or from the controlled trial and get exportable sites open but what this does do is give us an opportunity number one hopefully help somebody who is very sick and secondly of it gives us good experience with that Hemopurifier in this particular.

Patient population and to look at whether it can be safely deployed but beyond that it wouldn't be appropriate for me to comment any further.

Okay. So can you can you just describe a little bit or maybe you don't know the answer this I guess specifically, but.

Can you describe how the how kind of roll out of.

The trials will no I mean is are you going a little bit.

Most of these people be treated in a relatively short period of time do you said you.

I think or will it be steelbrick sort of an extended period of time or you'll get a couple of people here and a couple of people that he already even really knows the answer to that.

Well, it's early for me to say, what I will say is that in the places where.

Just a buyer is active and it was true in New York as you know early on it was true in Seattle and it was true I'm in a in other areas.

These patients really slowed the I'd say use and so some of the senators <unk>.

That we're talking too.

On some of these are not large hospitals that are taking care of the majority of patients. They just happened to be in the way of the t. endemic and many of them have completely devoted there I see you to covert 19 patients. Many of them have opened secondary I see use in other area.

Yes, I'm. So I think once we get open in a couple of these busy areas and again, we're in a position to open multiple sites on depending on where the pandemic goes they're gonna be unfortunately, a lot of available patients for off for treatment. So.

You know I guess, the easiest to answer it again, it's hard to predict until rope and isn't there was gonna be no shortage of patients I'm in the areas that are most heavily affected Dame some of those for you, but you know, Florida clearly has been it has been getting hammered Unfortunately, southern California, our home turf is also very.

Very heavily affected many patients are coming into the area from the Imperial valley from the agricultural workers there and some of these hospitals are literally getting overwhelmed. So you know again I think once we get open its not going to be a trickle of patients I think it'll probably be.

Central numbers, but again, we're gonna have to get open and see how that plays out.

Yes. There is there any can you give us any sense sort of the protocol of this this because I guess, what I'm wondering is.

No as I I've sort of always felt like on this side on the infectious disease. I cited this that that might be more did benefit derived to somebody who are maybe isn't sick. Obviously, if you did reduce oh load before they get sicker and sicker and second circuit, they're more maybe more Ben.

But well this generally and this particular trial be focused largely on people who are already that are admitted to the I see you or well when you do you ever well, they maybe potentially ever use this on somebody who's a little bit earlier in the process.

It's a great question and the short answer is that the current trial that's been approved by the FDA under viral I'd be is restricted to patients who are in the I see you and pretty sick most of them will be on ventilators on many of them, we'll have acute kidney injury.

So initially will be focused on the sicker population, but I think you're absolutely right that the largest benefit could be very easily in the patients who are a bit earlier on acquiring large amounts of supplemental oxygen on but who may have larger off the circulating viral.

So you know I think ideally we would want to get a cross section, but initially were being pretty conservative, but as you can imagine the FDA has also been conservative.

But the kind of data that we get.

From that trial and also from occasional I'm emergency use I think that's going to help to make that kind of argument.

It will there be instances, where I wanted ask.

Well, let me ask your question on the oncology side.

Sort of move forward and as you're sort of designing maybe additional clinical trials around this.

Is it is.

Our next sort of comes back to the same question I guess to me.

Well, we'll further clinical trials me kind of focused on kind of when you apply.

Process, if somebody's east I mean that I could envision for instance, where seems to me that that.

Ecology side, you know, maybe maybe not but maybe the best time for them to.

I guess that's the question is is the best time, no before before they have somebody's other tree, whereas maybe even things App you have some of these treatments and.

Yes is the clinical trial process likely to focus on sort of when this is applied or is it going to be.

Number of different things I guess, well, it's a good question in and the answer is its an iterative process.

I think that you know when we talk about the oncology trial that that is starting up right now one of the things one of the most important characteristics of that is that because of the approval of keytruda in the frontline setting.

As standard of care and that's the combination that we're doing that is.

Treating patients we're going to be started on keytruda with the hemopurifier prior to the administration. So that we can clear the immunosuppressive exosomes and hopefully increase the percentage of patients who respond.

This particular disease and headed in that cancer patients who have already failed several lines of therapy are very sick and have a very low life expectancy and so we're comfortable and actually delighted that were in the patient population were in in terms of exactly what the time right time.

Is to treat with the hemopurifier or timelines because it maybe that'll make sense to do it more than once that's what we expect to learn and from this initial early feasibility study. So we'll be designing later stage studies based on what we've learned what I will say is as we pointed out.

I'm in the earnings release, and as I mentioned <unk> a minute ago. Some of this large grant that was just awarded to US in combination with Pittsburgh is actually intended for a follow on trial and so the F D or not the FDA I'm sorry, the of the NIH.

He looked at this and reviewed it but we will be essentially refining the design of that trial as we learn from the ongoing early feasibility study.

Okay. So just so I understand though it in terms of.

This being something that maybe more applicable as a sort of systemic sort of therapy.

Is it.

Is it wrong for me to think that maybe someday.

You will conduct trials and it might be that that that maybe the best use and this might be for somebody who has already gone through some of these things in there on some sort of cancer maintenance thing that the you know.

Come in and get a check up every six months or whatever but maybe someday this could be something where every six months when they come in the Czech have the checkup. They also plug them onto the <unk> hemopurifier too.

Extract any excess zones that are.

Yeah.

That's it's a ways off but it's a great question and I think.

We'll be looking at different patient populations in different solid tumors.

And you know there are situations, where patients have essentially received definitive therapy and are simply being observed sort of what you. Just described and we know that there's a subset of those patients. This is particularly true.

In colorectal cancer in patients with advanced stage, two and three disease. There was a sub population of those patients who.

Gotten definitive therapy and are under observation and we actually knew when they were at markers.

Oh that predict which are those patients are gonna relapse and which patients are not this is part of what we're looking at our collaboration with hope in Newport Beach is whether there are exercisable markers essentially accessible liquid biopsy markers that we'll let us predict which are those patients are likely to relapse and if we.

Can predict which ones are going to relapse or it could very easily make sense to do exactly what you said to treat them essentially prophylactically with hemopurifier to see if we can delay or prevent that relapse, but again, that's a couple of steps down the road.

That's all right. Thank you appreciate it.

Thank you.

This will conclude our question and answer session all back to turn the conference back over to Dr., Tim Rudelle for any closing remarks.

Okay. Thank you operator, and thank you all for dialing in we appreciate your continuing to follow the story. We are we remain very excited about what we're doing both on the oncology side and on the infectious disease side its good to get in.

To the gain in cold in 18, and we sincerely hope I'm that will be in a position to help some of these patients.

So again, thank you all for dialing in and stay safe.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.