Q1 2023 Aethlon Medical Inc Earnings Call

Hello, and welcome to the offline first quarter fiscal 2023 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 star key followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone.

So withdraw your question. Please press Star then two please note. This event is being recorded.

I would now like to turn the conference over to Jim Frakes C. E. C. F. L. Please go ahead.

Thank you operator, and good afternoon, everyone.

Welcome to <unk> Medical's first quarter earnings conference call.

My name is Jim Frakes, and I am Athlons Chief Financial Officer.

At 415 P. M. Eastern time today has one medical released financial results for its first quarter ended June 32022.

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

Visit the investors page at Www Dot Athlon medical Dot com.

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

That's one CEO Dr. Chuck Fisher.

And our Chief Medical and Chief Science Officer, Dr. Steven The Rosa.

We will provide an overview of our strategy and recent developments.

I will then make some brief remarks on Epsilon financials.

We will then open up the call for the Q&A session.

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

These statements are based on expectations and assumptions as of the date of 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.

Factors that could cause results to differ materially from those anticipated in forward looking statements.

It can be found under the caption risk factors in the Companys annual report on Form 10-K for the fiscal year ended March 31 2022.

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 have undertaken any duty to update this information to reflect future events or circumstances.

With that I will now turn the call over to Dr. Chuck Fisher Athlons Chief Executive Officer.

Thank you Jim.

Thank all of you for joining.

Yes.

My name is Chuck Fisher and I'm, the CEO of asphalt.

Since our last call it's been a busy six weeks.

Since our last call on June 28.

Six weeks.

Before I hand, the call over to Dr. Stephen Hill erosion.

Athlons, Chief Medical and Chief Scientific Officer.

Who will provide an update on our clinical trials and infectious diseases and oncology.

To make some brief remarks about our recent developments and COVID-19 infection.

Monkey pox.

We recently published a peer reviewed manuscript demonstrating.

Athlons proprietary G&A affinity RASM.

Key component of the Hemopurifier.

We're able to bind seven clinically relevant.

Ours currently two variants in vitro, including the Delta I don't know.

Alright.

Viral capturing efficiency, what's the G&A affinity.

Affinity RASM range from 53% to 89% for all variance tested.

The findings from this paper suggests.

The hemopurifier and should be able to find it.

Any future Sars Covid two variants.

Potentially arise.

The manuscript titled.

Removal of clinically relevant Sars COVID-19 two variants.

Any resin containing atlanta's Dallas, a gluten and.

In this coalition.

Plus one on July 28.

2022.

Yeah.

Given the ongoing outbreak.

Monkey pox virus.

We are commissioning a new in vitro binding experiment to confirm the hemopurifier effectively captures the current strain.

The current virus.

In 2008, we conducted an in vitro studies that demonstrated that the hemopurifier effectively about and removed.

The pox virus.

We believe that the Hemopurifier has the ability to buy in the current market box strain should not be affected because of the mutations present in the strain do not change the mannose sugars and the viral.

Okay.

Okay.

Envelope, which is recognized by the G&A.

And the Hemopurifier.

For more context regarding the 2008 study.

With Commission Battelle Memorial Institute.

Run a monkey pox in vitro study using a miniature version of our Hemopurifier.

This study demonstrated high concentrations of Monkey pox virus approximately 75000 Gpus.

For mill.

We're rapidly depleted from cell culture truly when circulated through the hemopurifier.

The study indicated that the hemopurifier around 44% of the monkey pox virus in the first hour okay.

Yes, Jim.

82% after six hours of testing and 98% after 20 hours of testing.

These studies were conducted in triplicate and data verification that is provided by real time polymerase chain reaction or Pcr.

We continue to monitor and watch.

Virus caseload and disease severity.

We have contacted the FDA and confirm the process by which we could provide.

Hemopurifier to requesting physician.

<unk> patient emergency use.

Similar to what we've done in the past.

Sars Covid two.

On August four 2022.

U S Department of health and human services.

HHS officially declared monkey pox, a health emergency.

An emergency use declaration has not yet been made we plan to submit a pre emergency use authorization package to the FDA so as to be prepared in the event. This declaration desert.

Yeah.

Now, let me turn up the Cogs, Steven erosion, MD, our Chief Medical Officer, and Chief Scientific Officer, Steve.

Hi, everyone and thanks for listening into our presentation.

Dr. Steven Rosenberg, Chief Medical and Chief Scientific Officer and Paul.

We continue to advance our severe COVID-19 clinical trial, so the hemopurifier under our open investigational device exemption known as an <unk> for life threatening viral infections.

Since our last update the first patient has completed the study.

Our active sites continue to actively screen patients along with our contract research organization PPD.

On July six 2022 U S food and drug administration.

Please just supplement to our COVID-19 clinical trial protocol.

This newly approved protocol supplement eliminated the inclusion criteria that patients must have a dialysis catheter in place and have previously tolerated dialysis at the time of screening.

This change should improve the feasibility of enrolling new patients in our study.

Sites are currently submitting the supplement to their institutional review boards Arby's and we expect to have approvals in August and September of this year.

Yeah.

And India Magenta meta City hospital, a multi specialty hospital in Delhi has enrolled one patient in our COVID-19 trial in India and continues to actively screening patients.

Our CFO Paul trend LLC.

Dennis side additional potential sites for the trial in India and is currently assessing feasibility.

In addition to our work with COVID-19, we continue to screen patients for our IDE.

Clinical trial in head and neck cancer.

We have submitted a protocol supplement to the FDA to request the inclusion of patients.

Who have failed platinum chemotherapy in the trial.

If this change is accepted by the FDA It would increase the eligible population for the study.

We are also currently drafting a new protocol for a clinical trial that would allow us to examine the effects of the hemopurifier in multiple tumor types.

The cancer has progressed despite a two month period of previous checkpoint inhibitor therapy.

I will now turn the call back over to Jim Frakes.

Thanks, Steve and good afternoon again, everyone.

At June 32022.

Cash balance of approximately $14 $9 million.

Our consolidated operating.

Operating expenses for the three months ended June 32022.

Approximately $2 $91 million.

Compared to $2 million to $3 million for the three months ended June 32021.

This increase of approximately $680000 or 30%.

And the 2022 period was due to increases in our general and administrative expenses of approximately $402000.

In our professional fees of approximately $261000.

In our payroll and related expenses of approximately $13000.

The 400 in $2000 increase in our general and administrative expenses in the June 32022 quarter was primarily due to the combination of a $161000 increase in our clinical trial expenses.

The $97000 increase in supplies.

Our $91000 increase in our rent expense and the $27000 increase in our insurance expense.

The $261000 increase in our professional fees was primarily due to the combination of a $154000 increase in our contract labor expense associated with product development.

Analytical services and a $95000 increase in professional fees associated with regulatory strategy services.

Sure.

The $13000 increase in our payroll and related expenses was due to an increase in our stock based compensation expense of $95000.

Our cash based compensation expense decreased by $82000.

Primarily because our CEO received a $215000 bonus in the June 2021 period.

For achieving certain contractual milestones and his employment agreement.

And there were no bonuses paid out in the June 2022 period.

We did not record any revenue related to our government contracts with the NIH in the three months ended June 32022.

Compared to approximately $132000 in the three months ended June 32021.

And at June 32022, we had approximately $459000 of deferred revenue related to those contracts.

As a result of not achieving certain milestones on those contracts. However, we did receive the payments.

And those amounts from the government.

As a result of the changes in the revenues and expenses I just noted.

Our net loss before non controlling interests.

Increased to approximately $2 9 million for the three months ended June 32022.

From approximately $2 1 million for the three months ended June 32021.

During the three months ended June 32022, we raised approximately $619000.

Net proceeds under our ATM agreement with HC Wainwright Mccullough.

Pursuant to sales of our common stock.

In July and August 2022 to date.

Raised approximately $8 $3 million under our ATM agreement through sales of our common stock.

Our current cash position sets us up very well for conducting our planned clinical files have Steve Alrosa just noted.

For the manufacturing of our Hemopurifier for those trials.

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

That release included the balance sheet for June 32022, and the statements of operations for the three months ended June 32022 and 2021.

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

Our next earnings call for the fiscal second quarter ending September 32022.

Will coincide with the filing of our quarterly report on Form 10-Q in early November.

And now Chuck Stephen I would be happy to take any questions that you may have operator, please open the call for questions.

Thank you.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

If youre using a speakerphone please pick up your handset before pressing the keys.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Our first question today comes from Marla Marin of Zacks. Please go ahead.

Thank you.

I have two questions.

One is on the.

Monkey pox virus.

Given where we are right now and given how I think that.

People, including the regulators the CDC how probably.

Leaning towards being more cautious than not given what we've experienced over the past in Europe .

Have you had any kind of informal incoming inquiries regarding the hemopurifier that you can share with us.

Yes, hi, Thanks, Barbara we have we have not received specific inquiries from specific physicians about the hemopurifier per monkey products to date.

Okay.

Okay, but but you.

Going back to the 2008.

<unk>.

You're confident about the.

Advocacy of the Hemopurifier in terms of trade.

Treatment.

Gordon.

Fireeye.

Well, what we know is that.

In in vitro system, which uses a small version of our Hemopurifier. So the same affinity RASM.

Monkey pox is effectively removed.

Very rapidly and completely in that system.

We can't extrapolate that data to to the effects in humans at that at this point, we don't have data in humans to date.

Okay, and then I have one other question this is for Jim.

Can you.

Talk about any potential upward pressure that.

Might be worth all club inflationary pressures on wage inflation.

That might impact.

How long your current cash balance.

We'll be able to continue.

Damon.

Research studies before.

Before we start thinking about other alternatives.

I don't think we.

Felt the impact of the inflation inflationary pressure.

Some various supplies have gone up slightly but our.

Okay.

Alright.

I would assume.

Employee costs May go up.

I don't see any of that is materially impacting our.

Our cash runway Marla.

Okay. Thank you.

In a significant way.

Obviously every little incremental little bit.

Good afternoon.

Overall, it is not mature.

Okay, great. Thank you.

Thanks Mark.

This.

Just a question and answer session.

I'd now like to turn the conference back over to Chuck Fisher CEO for closing remarks.

Yeah.

Thank you all again for joining us today to discuss our first quarter results.

We look forward to keeping you up to date on future calls and thank you for calling in.

Okay.

The conference has now concluded. Thank you for your participation you may now disconnect.