Aethlon Medical Inc Q4 2023 Earnings Call
Good day and welcome to the Atlas Medical fiscal year end 2022 earnings and corporate update conference call.
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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 ASLAN Medical's fiscal year end.
Oh my.
My name is Jim Frakes, and I'm Epsilon Chief Financial Officer.
415 P M eastern time today.
Has one medical released financial results for its fiscal year ended March 31 2023.
If you have not seen or received Athlon medical's earnings release.
Please visit the investors page at Www Dot Athlon medical Dot com.
Following this introduction and the reading of our forward looking statement.
As long as Chief Medical Officer, Dr. Steven The Rosa will provide an overview of athlon strategy and recent developments.
I will then make some brief remarks on avalon's financials. We will then open up the call for the Q&A session.
Now before I hand, the call over to Dr. La Russa. Please note that the news release today and this call contain forward looking statements in the meaning of the securities After 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 statement.
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.
And under the caption risk factors in the company's annual report on Form 10-K for the fiscal year ended March 31 2023.
Our most recent report on Form 10-Q and in the Companys 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. Stephen The Rosa Athlons Chief Medical Officer.
Thank you Jim and thank all of you for dialing in this as people arose at the Chief Medical Officer at Athlon Medical.
That's one medical is continuing the research and clinical development of our Hemopurifier.
Therapeutic blood filtration system that can bind and remove harmful exit homes and life threatening boxes from the blood.
This action has potential applications in cancer, where cancer associated eggs as arms may promote immune suppression and metastasis.
And in life threatening infectious diseases.
The company's ongoing COVID-19 trial in India for patients in the intent to intensive care unit at Madame <unk> City Hospital remains open for enrollment with one patient treated to date.
In May 2023, a second clinical site Moana Izod Medical College, and then M. A M C.
<unk> ethics board approval to participate in the trial and site activation activities are currently underway.
<unk> is a COVID-19 infection that require hospitalization continue to occur in India.
The addition of N and M. A C is a second high quality clinical site may improve the enrollment of patients who go on to require ICU care for their severe COVID-19 infection.
In the oncology indication Athlon medical continues to work attract research organization naphtha.
Initiate a clinical trial in Australia.
This new clinical trials in oncology is planned to be a safety feasibility and dose finding trial in solid tumors failing anti PD one antibodies.
Management of Athlon medical believes that the data from this trial will help inform the design of future efficacy trials of the company's hemopurifier in oncology.
Current activities underway for this trial would include site identification and qualification.
Finalization of the necessary documents for ethics board submission at the clinical sites case.
Case report form development and selection of a data safety monitoring board.
On June 21, 2023, Athlon announced that it is investigating the use of its hemopurifier organ transplant market.
Specifically the company is conducting translational studies with the objective of determining if the hemopurifier when incorporated into a machine perfusion organ preservation circuit kimrey.
Can remove harmful viruses and exit homes from harvested organs.
The company has previously demonstrated the removal of multiple viruses and eggs as arms from buffers functions in vitro using a scaled down version of the Hemopurifier.
This process may potentially reduce complications following transplantation of our harvested, oregon, including viral infection delayed graft function and rejection.
The company believes that this new approach could be additive to existing therapies that are currently in place to increase the number of viable organs for transplant.
According to precedence research the size of the global organ transplantation market is projected to hit approximately $33 $7 billion by 2032 compared to $15.1 billion in 2022.
Further precedent research estimates that the global organ transplantation market is.
Poised to expand at a compounded average growth rate of 8.36% during the forecast period of 2023 through 2032.
Additionally, according to precedents research rising demand for organ transplantation to treat organ failure.
And novel tissue transplantation products is the prime factor that is driving this market growth.
In the United States All organ transplant program is supposed to be located in hospitals that have a Medicare provider agreement.
The ultimate goal of Athlons Medical research in the organ transplantation area is to position the hemopurifier as a beneficial potentially transformative accessory element to existing or future, Oregon perfusion systems keep harvested organs and transplantable condition.
Now with that I will turn it over to Jim for the financial discussion and then open up for questions.
Thanks, Steve and good afternoon again, everyone.
As of March 31, 2023, Athlon medical had a cash balance of approximately $14 $5 million.
Yes.
Our consolidated operating expenses for the fiscal year ended March 31 2023.
Were approximately $12 $4 $7 million compared to $10 $71 million for the fiscal year ended March 31 2022.
This was an increase of approximately $1 $76 million.
And that $1 6 million increase was due to increases in administrative expense of $1.3 million and in professional fees of approximately $910000.
Our G&A or general and administrative expense for the fiscal year ended March 31, 2023 was $4 $4 $8 million compared to $3 $4 million to $5 million for the fiscal year ended March 31 2022.
The $1.3 million increase was due an increase in manufacturing and research and development supplies of approximately $400000.
Related to the manufacturer of Hemopurifier devices.
And various research and development activities.
Other increases included approximately $147000 and subcontract expense.
Yeah.
Related to revenue recognized from contact tracks and grants with the NIH.
Approximately $155000 associated with the closeout of the COVID-19 clinical trial.
Approximately $104000 associated with our launch of our Australian subsidiary and the oncology clinical trial in Australia that Steve mentioned.
Yeah.
And approximately $118000 in rent expense related to the addition.
Okay.
<unk> suites in this past fiscal year, and our fourth full year of rent for our office and laboratory space.
Approximately $117000 in depreciation and amortization expense.
You'll see it in with leasehold improvements to the manufacturing space.
And approximately $94000 in D&O and medical insurance.
We also had an increase in utility expense approximately $32000 largely as a result of the increased space under lease.
These increases were offset by decreases in outside services of approximately $65000 laboratory fees of approximately $61000.
Decreases in office supplies and equipment of approximately $32000.
Our professional fees for the fiscal year ended March 31, 2023, we're $354 million compared with six $3 million.
The prior fiscal year.
This.
$910000 increase was primarily due to increases of approximately $291000 in legal expenses.
Approximately $335000 in contract labor associated with product development and scientific analytical services.
Approximately $176000 in regular regulatory consulting.
Approximately 40% of Investor Relations.
Sure.
Okay.
Accrued expenses and approximately $16000 in director's fees.
Which were partially offset by a decrease.
Ease of approximately $17000.
Papillon Nichols National Cancer Institute or NCI Award contract ended on September 15, 2022.
And we subsequently presented the required final report to NCI.
As the NCI completed this closeout review of the contract we recorded a total group revenue.
Revenue of approximately $574000 in the fiscal year ended March 31, 2023 <unk>.
Compared to approximately $294000 in the fiscal year ended March 31 2022.
As a result of the above mentioned factors the companys net loss before non controlling interests increased to $12 million for the fiscal year ended March 31, 2023 from $10 $4 million for the fiscal year ended March 31 2022.
During the fiscal year ended March 31, 2023, we raised approximately $8 9 million in net proceeds under our at the market offering agreement.
Because of our common stock.
And subsequent to March 31, we raised net proceeds of approximately $1 $1 million under the aftermarket offering agreement.
We included these earnings results and related commentary in our press release issued earlier this afternoon.
That release included the balance sheet for March 31, 2023, and the statements of operations for the fiscal years ended March 31, 2023 and 2022.
We will file our annual report on Form 10-K, following this call.
Our next earnings call for the fiscal first quarter ending June 32023.
Will coincide with the filing of our quarterly report on Form 10-Q in August 2023.
And now Steve and 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.
Star then one on your Touchtone phone.
Speakerphone, please pick up your handset before pressing.
Hello, Jonathan the question queue. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from while online.
Please go ahead.
Thank you.
So I have a couple of questions first of all.
There's a lot going on how do you feel in terms of the level of the inventory you have.
Hemopurifier devices in order to support the various clinical studies that youre looking at.
Okay.
Hi, Mario this is Jim.
We completed a manufacturing run recently.
And we're poised to.
Do another run in our new manufacturing space.
That will be the first run in our new space. So we're excited about that.
And.
We're.
Close we believe to having.
Gone through all the processes required by the FDA for our new.
Second source of G&A G&A lectern.
<unk>.
So I don't think.
Everything else being equal.
Okay great.
Can you give us a little bit more color on this.
Thank you.
Got it.
In terms of looking at how you know.
How the device does it.
The Oregon trials.
Space.
Just to make sure I understand.
Yeah.
For King.
No.
I'll work would be.
Separate from.
The actual.
France plant.
The Oregon.
The head of that to make sure that the.
Or again is.
Yes.
Side of any kind of excess Tom's just I just wanted to understand exactly what we're talking about.
Sure. So great question model or it's a steep erosion, so and the transplant.
Base, you can imagine that the the things that the recipient is at risk for our infections, often infections that they get from the donor and those are often viral infections, including CMV EBV.
Hepatitis viruses as a variety of viruses that we've previously been shown to remove in vitro. So there is there is that.
There is that concern for transplant patients there is a rejection.
And Theres papers now that eggs as arms actually from the donor can contribute to the development of rejection and the and the recipient.
Likewise, there are also exited homes released from Oregon's as they are being handled and transported basically stressed organs are releasing exosomes that can lead to downstream complications and the recipient so the.
Hi, Potthast this and again, we're working on translational studies to support this is that if you incorporate the hemopurifier to what now is standard for harvested Oregon's where theyre put on a a machine perfusion circuit. If you could remove viruses that could potentially infect the donor excuse.
To me the recipient before the Oregon gets placed bye bye this perfusion circuit with the Hemopurifier and if you could take out those donor eggs as homes.
Or the exit homes that are being released because they already been stress you may actually improve the outcome from the Oregon gets placed so you're absolutely right it would be upstream.
The actual transplant itself it would be in the in the space between harvesting the organs and placement of the organs in the in the perfusion circuit.
Okay. Thank you for that and it also sounds like so we know that.
Hi.
Thanks, Joe.
You know the process it sounds like what you would be doing would be concurrent with other standard practices that are currently employed tomorrow.
No that's correct model. So so it's pretty much standard to take harvested organs and put them on one of these machine perfusion circuit and we would be testing whether the incorporation of the hemopurifier into that circuit would have added benefits beyond the standard machine perfusion alone.
Okay. So it would be done concurrently yes.
Thank you.
Yes.
Our next question comes from Anthony.
Anthony with Maxim Group. Please go home.
Hi, Good afternoon. This is actually Jeremy prominent on the line for Anthony I'd ask first of all actually I wanted to thank you for participating in our Maxim Health Care Conference last week is I think it's really a great couple of questions from US first one relating to the oncology trial. There's any you know any more information you can provide regarding a timeline I know you said that they are in.
<unk> is performing some.
Activity is currently excited densification, but what does it do you have any more clarity on the time frame for this trial. When you could think you could start enrolling patients.
Right. So as you as you would imagine there's a number of active activation steps to actually initiating a clinical trial. Some of the most important are actually identifying sites that are interested in having them go through the site qualification visits and we're actually involved in those right now the other big step just so you understand the process.
In Australia since it's somewhat opposite of what occurs in the United States and in Australia. The site's submit for approval to do the trial from their hospitals Ethics Board and then notify the regulatory agency. So it's important in Australia that you have all the documents in order.
To maximize the chance that the export is going to approve your study so we're actually getting all of those.
Documents in their best shape for submission. So we're doing that the hope is that we and the goal I should say is to have this process go forward such that we could enroll someone by the end of the calendar year.
Okay, Great. So end of 2023, okay great.
And then just jumping to the to this new organ transplantation market.
You're investigating.
How would you compare that opportunity Sudan apology, which one now do you view as your nearest term potential commercial opportunity.
Well, the I say in fairness, the oncology where.
Headed towards actually enrolling patients in a clinical trial for <unk> for the translation transplantation indication. We do have a number of trends translational studies and likely preclinical safety studies that would have to be done and anticipation of a clinical trial clinical trial. So these now.
These translational studies can be done very quickly because they are they are there.
Theyre Laboratory studies, so they can go as fast as we as we go but it's likely that a patient being enrolled in an oncology trial before the transplant patient trials.
Okay and then.
As Jim Jeremy also.
Yeah.
There will be steps in an oncology trial do we have the initial safety trial, and then we tweak it and have a larger efficacy trial.
Not sure what how many steps we need to take with the organ transplantation.
A project of all the preliminary work that Steve was just mentioning is on Oregon's of dead people. So the FDA would not be involved on that they would be involved when the oregon's are actually transplant it into patients of course.
So.
We can do a lot of work without the F D a help.
And then.
How many.
Whether we need more than one do we need to say if you're traveling in an efficacy trial I do not know.
It's unclear.
The path to market, while we are starting later than the cancer trial, who knows it could be.
It'll be faster to market.
Understood. Okay, and then just one last question is there any reason to think otherwise why the hemopurifier would not be able to remove safely and that's if the cases, where I mean I guess, if there's just an Oregon I don't know if the safety, but to be able to remove these exosomes and and viruses from the Oregon's blood without cause.
Historically, it's clear and indicated for many studies and that the Hemopurifier can safely and ethically and application sleep clear. These exosomes and viruses from humans is there any reason to believe that there should be do you see it would be otherwise when it comes to the organs.
So youre right R&D, our past in vitro studies, which suggest that there is a high likelihood that we'll be able to remove viruses and exits.
We simply have not done the studies yet on removing those from the FERC Perfused solutions does that have been used that are being used in those circuits and that is a necessary step, but yes. We have high we think it's highly likely that those those translational studies will bear out that we can remove the viruses and exit.
The <unk> solution.
Yeah, Okay, great. That's that's it into an exciting new market opportunity potential. So thank you for taking my questions and I'll hop back in the queue.
Okay. Thank you.
This concludes our question and answer session I would like to turn the conference back over to Jim Frakes for any closing remarks.
Thank you everyone for joining us today to discuss our fiscal year end results and we look forward to keeping you up to date on future calls thanks again goodbye.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.