Q4 2022 Aethlon Medical Inc Earnings Call
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Good afternoon and welcome to the afflon medical fourth quarter fiscal 2022 earnings and corporate update conference call. All participants will be in listen-only mode. Should you need assistance, Please signal a conference specialist by pressing the starkey, followed by zero.
Speaker 1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star than one on your telephone Keypad.
To withdraw your question. Please press star, then two.
Please note, this event is being recorded.
Speaker 1: Would now like to turn the conference over to Jim Frank,'s Chief Financial Officer. Please go aheadi.
Thank you operator, and good afternoon everyone.
Welcome to AON medical's fiscal year-end earnings conference call. My name is Jim frakes and IM maplon's Chief Financial Officer.
At flo' 15 PM Eastern time. Today we released financial results for our fiscal year ended March. thirty-first twent thousand and twenty-two.
If you have not seen or received Aton medical's earnings release, please visit the Investors page at W apon medical com.
Following this introduction and the reading of our forward-looking statement, applon CEO , DR chuckfischher and our Chief Medical Officer, DR Stephen lroso, will provide an overview of aplplan's strategy and recent developments.
I will then make some brief remarks on alon's financials.
We will then open up the call for the QA session.
Before I hand the call over to DR Fisher, Please note that the news releaseed today and this call contain forward-looking statements within the meaning of the Securities Act of 1934 as amended and the Securities Exchange Act of 1934 as amended.
The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement.
Speaker 2: These statements are based on expectations and assumptions as of the date of this conference call.
Speaker 2: 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.
Factors that could cause results to differ materially from those anticipated in forward-looking statements.
Can be found under the caption Risk Factors in the company's annual report on Form 10-K for the fiscal year ended March 31. twent thousand and twenty-two.
Our most recent report on Form 10 -q and in the company's other filings with the Securities and Exchange Commission.
Except as may be required by law. The company does not intend, 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 Chuck fischher, asthone's Chief Financial Officer.
six Executive.
Executive officers.
Step up for.
Thanks Jim, and thank all of you for joining guialing in today.
This is Chuck tricsuer and I'll make a few open comments.
It has been a busy four months since our last investor conference call in February fourteenth 2022 before I hand the call over to DR Steve and morrosa.
Our Chief Medical Officer, who will provide an update of our clinical trials and aftexas diseases. I would like to make some brief remarks about the current monkey X outbreak, as we received new misinquiries about that outbreak from investors and reporters.
We previously commissioned the TE Memorial Institute in 2008 to run a monkeypox virus.
mpv in vto study using a miniature version of our chemopurifier.
This study demonstrated that high concentrations of monkey pox virus.
Approximately 35 thousand GP per aills.
Were rapidly depleted from cell culture fluids when circulated through the heme of par.
The study indicated that the hingle per fire removed 44% of infectious monlypox virus in the first dollar testing.
82% after six hours and 98% after 20 hours.
The studies were conducted in triplicant.
And data verification was provided by real-time a pcrgiven the recent outbreaks of monkeypox virus.
We continue to monitor the case load into thesease severity.
We've had recent communications with the FDA to discuss what process.
Would be? Should we be reached out to by a hospital requesting a single patient?
Emergency use per ourchemo jurile.
Monkey prox has not yet been declared an emergency by the.
The Department of health and Human services Secretary and, as such, there is not an emergency use authorization process in place.
However the world health organization as describedthe outbreak as quote- unusual and quote: and said that the virus's continuing spread was worryring enough to convene its expert committee on Thursday, June twenty-third.
Speaker 3: 2022 to decide whether the disease should be declared a public health emergency of international concern.
The international health regulations emergency committee met on 23 June of this year regarding the multicountry monkeypox outbreak.
To advise the wfo Director general on whether it should be constituted a public health emercy of international concern or so-called CX.
The committee advised that who, Director general, that the outbreak should not constitute a public health international emergency concern at event at this.
Present time however the committee acknowledged that immeres a nature of the event and then controlling through the future. Spread of this outbreak requires intense.
Response efforts.
The advice that the B should be closely monitored and reviewed after a few weeks.
When additional information about the current unknowns, for instance incubation period, world sexual transmission, et cetera, become available to determine significant changes have occurred that may warrant a reconsideration of their advice.
It is worth noting that the mpr wrote a piece expressing concern regarding the.
Inadequate testing on 25 June 2: 20.022 thousand adequate testing: four marketbox fires.
Additionally nature medadison.
medadicine.
It made the observation that there are far more mutations and would be expected in this particular outbreak, with double stranded DNA mutation rates being significantly elevated.
Now let me turn the call over to Stephen losa.
Now let me turn the call over to Stephen losesa, our Chief Medical oxen.
Hello everyone and thanks for listening to our presentation. I am DR Steph en lrosa, the Chief Medical Officer and outlaw.
First I would like to give you an update on our? U's clinical trial investigating the emoeuifier for the treatment of patients with severe SARS, COVID-19 two or covidt, known as COVID-19 infection.
This trial, conducted under the open investigational device, exemption or IDE.
Speaker 4: For the hemo purifiyer and life-threatening infections.
The trial of, designed to allow from to 40 patients to be treated under an early feasibility study protocol at up to 20 clinical sites in the United States.
As you may recall, we entered into an agreement of PPD, a leading global contract research organization, or co.
To oversee our? U's clinical studies investigating the hemo purifier for critically illcovid 19 patients.
We continued to make progress in our severe COVID-19 trial during the March 2022 quarter under our open investigational device exemption.
For the hemo purifier for life-threatening viral infections.
We now have nine hospitals activated for patient enrollment and they are actively screening patients for the trial.
These hospitals include lsu shreport valy Baptist Medical Center in Texas.
looma Linda Medical Center.
Co gvine and Newport Beach in Southern California.
University of California, Davis.
University and Miami Medical Center.
Cooper medical and Thomas jefferson medical.
We are in sybassite activation process with additional U's medical centers as well.
In June 2022, lsu strereeport enrolled the first patient in the clinical trial.
The patient completed the hemoturiffire treatment phase of the study and is now in the 28 -day follow-up period.
The patient tolerated all the emopurifier treatment patients.
All the mocied treatments without adverse events.
Also on the COVID-19 front. During our recent early earnings call, I noted that we had recently obtained epthics review Board approval and entered into a clinical trial agreement.
What madana med City hospital.
A multi-specialty hospital in Delhi India, for a COVID-19 trial. COVID-19 clinical trial at that location.
We have previously conducted multiple clinical trials with the principal investigator, as well as a previous clinical trial, monana medicid hospital, in hepatitis C patients.
Our goal with this trial in India is to help COVID-19 patients there and also generate supporting patient data that we expect will be submitted to the FDA along with our U's clinical trial data.
This site in India is now open Form enrollment and has treated one patient and is actively screening for additional glovid 19 patients.
We are also in the process of selecting additional clinical sites for this study.
Now let me turn the call back over to Chuck Fisher.
Thanks Steve.
I'd also like to give an update on our head and net cancer trial.
We've enrolled two patitients on the trial to date.
The team at the University of Pittsburgh Medical Center has continued to actively screen for additional patients for this trial.
We are in the. We are in the process of creating a protocol supplement.
Speaker 3: To potentially increase the pool of subjects for the study.
We are also in discussions with additional sites and are designing a basketquote trial to examine the effect of our he purifi on exisonal removal in multiple tumor types.
We have an active preclinical research program where we are conducting experiments on additional targets for our heme purifier, as well as the ones to further define exerone bindings.
With Don. I'll turn it back over to Jim for the financial discussion and then open us for questions.
Thanks Chuck's, and good afternoon again everyone.
On March 31, twent thousand and 22, we had a cash balance of approximately $17.1 million.
Our current cash position sets us up very well for conducting our planned clinical trials, as Steve lerosa just noted.
And for the manufacturing of our hemourifier for those trials.
During the fiscal year ended March 31- 2022, we raised approximately $17.5 million.
In net proceeds from the issuance of common stock and a combination of a registered direct financing and ATM sales.
We recorded approximately $294 thousand of revenue related to our N government contracts with the NIH in the fiscal year ended March 31- 2020 -two.
Speaker 2: Compared to approximately $659 thousand in the fiscal year ended March. thirty-first, twent thousand and twenty-one.
On March 31- 2022, we had approximately $345 thousand of deferred revenue related to those contracts.
As a result of not achieving certain milestones in those contracts.
Our consolidated operating expenses for the fiscal year ended March 31, twent thousand and 22 were approximately $10.72 million.
Compared to approximately $8.55 million for the fiscal year ended March thirty-first 2021.
An increase of approximately $2.17 million.
Speaker 2: In fiscal in the fiscal year ended March thirty-first 2020 -two.
The $2.17 million increase in the 2022 period was due to increases in payroll and related expenses of approximately $1.17 million and, in general and administrative expenses of approximately $1 million.
Which were partially offset by a decrease of approximately $4 thousand in our professional piece.
The $1.17 million increase in the fiscal year ended March thirty-first 2022 in payroll and related expenses.
Was due to an increase in cash-based compensation of approximately $1.2 million.
Which was partially offset by a decrease in stock-based compensation of approximately $29 thousand.
The $1.2 million increase in cash-based compensation was primarily due to an increases of approximately $826 thousand and $721 thousand in GNA payroll and an RND payroll respectively.
The $1.2 million increase in cash based compensation was primarily due to an increases of approximately $826 thousand and $721 thousand in GNA payroll and in R D payroll respectively, due to headcount increases.
And approximately $203 thousand in relocation-related compensation.
To suit to two senior executives that relocated to San Diego, California.
As a condition of their employment.
Those increases were partially offset by the combination of a $452 thousand accrual in the 2021 period.
Speaker 2: Related to the separation agreement with our former CEO , with no comparable expense in the y-two thousand and 22 period.
And a net decrease of approximately $135 thousand in cash bonuses.
The $1 million increase in the fiscal year ended March thirty-first 2022 in GNA. Expenses primarily arose from.
Increases of $453 thousand in clinical trial expenses.
Speaker 2: $209 thousand in rent expense and $195 thousand in insurance expenses.
As a result of the changes in revenues and expenses I just described, our net loss before noncontrolling interests increased to approximately $10.4 million for the fiscal year-ended march- thirty-first 2022, from approximately $7.9 million for the fiscal year-ended march- thirty-first 2021.
We included these earnings results and related commentary in the press release issued earlier this afternoon.
Speaker 2: That release included the balance sheet from March thirty-first twent thousand and 22 and the statements of operations for the fiscal years ended March thirty-first twent thousand and 22 and 2021.
We will file our annual report on Form 10-K following this call.
Our next earnings call for the fiscal first quarter ending June thirtieth, 20 and twenty-two.
We'll coincide with the filing of our quarterly report on Form 10 -q in early August .
And now Chuck Steve and I would be happy to take any questions that you may have.
Operator please open the call for questions.
We will now begin the question and answer session.
To ask a question. You may press star, then one your telephone key pad.
If you are using a speaker phone, Please pick up your handset before pressing the keys.
To withdraw your question. Please press star, then two.
At this time. We will pause momentarily to assemble our roster.
The first question is from Marla meron. Was Zack, Please go ahead.
butyou some So.
You've done a lot of- nor outside of the ongoing clinical trials that you're conducting now- a lot of work on researching the impact of the hemo purifyer. Can you?
Give us any color on how that ENT into some of your conversations or interactions with the regulators as you try to move forward.
mo this is a even the rose. Thank you for your question. So we are. We have a breakthrough designation in COVID-19 and viral infections with the FDA and are in close contact with them in terms of our in our current clinical trials. We know that we enrolled our first patients so that data will be forthcoming. We don't have that currently, but we've had conversations with them about potential ways to adjust the study to So that we can continue the trial and in a and enroll more patients.
mo this is a even the rose. Thank you for your question. So we are. We have a breakthrough designation in COVID-19 and viral infections with the FDA and are in close contact with them in terms of our in our current clinical trials. We know that we enrolled our first patients so that data we will be forthcoming. We don't have that currently, but we've had conversations with them about potential ways to adjust the study to So that we can continue the trial and in a and enroll more patients. I don't know if that answers your question.
Well I was thinking about some of the data that you're getting outside of the trial themselves something.
Yes the data we have Marla outside the trial is data that our front patients we've treated as single patient emergency use criteria. These were published in appearing view Journal in Frontiers in medicine, the. The data is very interesting in that in one patient who was not B aymic, we were able to show the removal of exoomes and ex's Al microRNAs that are implicated in quagiloathy and acute lung injury, and those.
exisoma microras decrease with hemo purifier treatment. At the same time, the patient's oxygenation and quagulopathy were improving. In a second patient, who was in fact by reic with COVID-19, we re able to show for the first time in vivo that the hemo purifier decreased the COVID-19 viral load by 58% during the first six hour a Hemopurifier treatment.
And when you, when you speak to our, interact with be FDA, does any of that come into pipe, given that it's not actually the outcome of a nongoing clinical trial?
And when you when you speak to our interact with the FDA does any of that come into pike given that you know. It's not actually the outcome of a nongoing clinical trial big.
They are aware of this data but.
They want to see obviously, safety and efficacy data and a larger number of patients enrolled in the clinical trial. Ok, Thank.
The next question is from Vernon bernardina with HC Wainwright. Please go ahead.
I Jim and steve- thanks for taking my question- and good afternooni- was wondering. We still have over one thousand- at least a seven day average- cases of COVID-19 recorded daily, but a lot of them are not severe cases anymore. Just wondering: what are the key challenges you think you've been are? What have you identified are the key challenges for enrolling patients in the study and?
And perhaps a little differently. What have your clerical sites are activated hospitals? Think may be the challenges or ways that they could perhaps enroll patients more quicklythank you.
So as I think you've picked up on, there are still a number of fairly large number of COVID-19 cases. But what we've noted, as others have noted, as the vaccines have been quite good at preventing severe infection. So what we're seeing is, although the cases are up, the number of B sites are telling us the number of hospitalizations and ICU admissions is is still relatively low, although it has increased recently, is the feedback we've received from hospitals. So we still feel.
That the story is not over with COT and that there will likely still be cases that are eligible. The other interesting. The challenge is to get into our TAR trial. You have to be on renno replacement therapy and that has decreased. B E perrenno replacement due to COT is decreased during the pandemic. So we're also trying to work with the, the regulators, to see if we can increase the potential pool of patients that would be eligible for the study. Now part me if I don't remember this, But as far as the the patient.
Just wondering if the length of the treatment is still the same as originally designed.
rightso. The design is that a patient will receive a four to six hour hemo purifier session once daily before consecutive days, during which time there would be blood drawn for both coed viral load measurements in the blood to see if themo purifier decreases viral load, as well as biomarkers of inflammation and coagulation throughout at the whole aisle, whole 28 day study period. We'd also be monitoring see if the patients's organ failures improve and what their're.
Clinical outcome is at the end of that time period, So that our design has stayed the same throughout the trial. We're not going to, we don't plan on making changes to that.
To that follow-up period or treatment period going forward.
Okay and startedorry to jump back to the first question: what the 40 patients? Can you either describe or provide some kind of insight as to what, if they thinks as to the number of patients that you plan to enroll inspeensions, and are they open to a lower number of patients, such that this study could be completed in a time in which perhaps the humor purefire could be considered?
Sooner rather than later as a treatment option for severe COT ients. So to ask to your question, they gave us approval to treat up to 40 patients as part of this approval. A typical safety and feasiability study however, typically is on the order- 10 to 15 patients. So we would have the ability, where this is an open label study, to review our data as it comes in, both safety and efficacy and then revisit the time point, revisit that data with the F da, especially given the breakthrough designation.
At any time. So it's not a situation where we have to enroll 40 patients. There is the latitude to examine the data as it comes in and then discussed with the FDA.
Thank you but end last question for me, and sorry to keep on and on and on. Do you test? Are the patients tested for, for example, like PCR, the type of variant that they have? For example, if B 4, five is now comprising 50% of the patients, is that some kind of data that you'd be able to collect?
Yes we will have multiple viral measurements in the blolog from every patient and have the ability then to determine exactly which vies to this.
yesso, if I think you ve taking my questions and looking forward to more data?
And berrennon. I think it's worth noting that to date we also have demonstrated a binding of most known variants and we anticipate that that will continue.
Speaker 5: No exactly, and that's why I asked a question, looking forward to more of that kind of data. Thank you.
True.
The next question is from Anthony V deby, with Maxim group. Please go ahead.
Yes thanks. So I just following up on the key-truded trial.
So you have two patients so far, if I remember from the last call Chuck, you mentioned about.
Increasing the number of sites to try to try to increase that rolement to get up to 10 to 12. have you been successful in recruiting physicians and patients at these other sizes? Just taken longer to sign up, or what? Can you give us an update on the additional?
To try to try to increase that rollment to get up to 10 to 12. have you been successful in recruiting physicians and patients at these other sizes? Is just taken longer to sign up, or what? Can you give us an update on the additional sitees?
Sure a good question. Thanks for calling.
The obviously first biing went very smoothly but that was at a time when the hospital is not hit by covida. Subsequently were hit by COT pretty badly, including running over to the cancer hospital, and that embarrowed use of patients, having patients which come in that could get the our treatment for COVID-19 subsequently. Where we are now is the as the thing tapered off a bit. They're not as severe, which Steve mentioned earlier, and less in the ice. Who knew's starting we had net patients areour.
Hard to come by at present and there's been a lot of screen. So what we're working with the University of Pittsburgh as well is thinking more broaderly than them to be adding other hospital sites with other physicians that specialize and head to increase numbers in in those trials.
Speaker 6: Yes I would just comment that one of the challenges and head and neck is having patients who have enough reserved enough strength to tolerate the hemo purifier. So there may be people who are who were eligible by their disease but because of their functional status. That is that's been a challenge as well as with kovid. But we've had some recent discussions with the PI about some attempts that we can make any protocol supplement to broaden the inclusion criteria and we're going to pursue those additionally. As Chuck said we're also.
Currently drafting a protocol for an additional trial, which is more of a basket trial, where you're looking at the effect of the hemo purureaofire upfront before ktruda in a number of different tumor types. That that we keytruud is indicated. So where where're rapidly pursuing getting that protocol draft written So that we could.
Get that trial going.
Right because conttruders news for a number of different cancers. What do you think would be the logical next.
Cancer to look at afterhead and ne with ktruda.
Well there there's a whole hopes that we, in a basket trial we would include a number of a number of different tumor types, and what we would particularly be interested in looking at is: can we restore responsiveness to keytra and people who've had a run-in period and are showing signs that they're failing, because that is actually 70% of the people who get keytrud to ultimately do on to fail. So if we can actually restore their responsiveness and a number of tumor types, that would be the next strategy.
Okay that makes sense. Just Chuck's point that some patients are not strong enough to withstand the Thin of purifier. How do you, how do you measure that? How do you determine? Is it a number of factors, But of course there is specific determinant.
Yes there's a number of grading and scoring sales scales that describe someone's functional status and you include those in your inclusion criteria to make sure that you have somebody who is not severely debilitated from their cancer.
To our standard. Suing com speak to great dB.
So our standard: So great SPE to great okay okay, Thank you very much, I appreciate.
That was helpful.
This concludes our question-and-answer session. I would like to turn the conference back over to DR Chuck Fisher for any closing remarks.
We'd like to thank everybody for joining us on this call today to discuss our fourth quarter results. We look forward to keeping up keeping it up to date on future calls and thank you very much for joining and have a good day.
Thank everybody for joining us on this call today to discuss our fourth quarter results. We look forward to keeping up keeping you up to date on future calls and thank you very much for joining and have a good day, goodbye.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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