Q2 2025 Aethlon Medical Inc Earnings Call
Speaker Change: Hyperman Michael Miller Steven Larosa Anything but superhuman Michael Miller director & Screenplay Michael Miller
Speaker Change: Good day and welcome to the Athlon Medical Fiscal Second Quarter 2025 Earnings and Corporate Update. 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.
Speaker Change: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, and then 2.
Speaker Change: Please note this event is being recorded. I would now like to turn the conference over to Michael Miller with RX Communications. Please go ahead.
Michael Miller: Thank you, Operator, and good afternoon, everyone. Welcome to Athlon Medical's Fiscal Second Quarter 2025 Earnings Conference Call. My name is Michael Miller with Rx Communications.
Michael Miller: At 4.15 p.m. Eastern Time today, Athlon Medical released financial results for its fiscal second quarter ended September 30th, 2024.
Michael Miller: If you have not seen or received Athlon Medical's earnings release, please visit the investors page at www.athlonmedical.com to view it.
Speaker Change: Following this introduction and the reading of the company's forward-looking statement disclaimer, Athlon's Chief Executive Officer and Chief Financial Officer, James Frakes, and Athlon's Chief Medical Officer, Dr. Steven Larosa, will provide an overview of Athlon's strategy and recent developments.
Speaker Change: Mr. Frakes will then make some brief remarks on Athlon's financials. We will then open up the call for the Q&A session.
Speaker Change: Before I hand the call over to Mr. Frakes, please note that the news released 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.
Speaker Change: 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.
Speaker Change: Factors that could cause the 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 31st, 2024, the company's most recent quarterly report on Form 10-Q, and in the company's other filings with the Securities and Exchange Commission.
Speaker Change: Accept as may be required by law, the company does not intend to, nor does it undertake any duty to update this information to reflect future events or circumstances.
Speaker Change: With that, I'll now turn the call over to Mr. James Frakes, Athlon's Chief Executive Officer and Chief Financial Officer. Jim?
James Frakes: Thank you, Mike. And I would like to thank all of you for dialing in.
This is Jim Frakes.
In October, as reported,
James Frakes: Athlon's Board of Directors appointed me to serve as the company's permanent Chief Executive Officer.
James Frakes: I have served as interim CEO since November 2023 and I look forward to continuing my role on a permanent basis.
James Frakes: As you know, Aflon Medical is continuing the research and clinical development of its hemopurifier, a blood-
James Frakes: A therapeutic blood filtration system designed to bind and remove harmful exosomes and life-threatening viruses from blood and other biological fluids.
These qualities of the hemopurifier have important...
James Frakes: potential applications in oncology, where cancer-associated exosomes may promote immune suppression and metastasis.
in Life-Threatening Infectious Diseases and in Organ Transplantation.
Thank you.
Speaker Change: As a reminder, the two goals that I stated were our key objectives when I was appointed interim CEO were to move the company forward in oncology and to reduce our expenses in order to streamline operations.
Speaker Change: As you will hear shortly, and as I'm happy to note, we made measurable progress on both of these fronts during the latest quarter and into the current period.
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Speaker Change: And I'm very pleased to say that we advanced our oncology trial efforts in Australia during the latest quarter and into the current period.
Speaker Change: I am gratified by this progress and expect that our shareholders will ultimately be rewarded by our efforts.
Thank you.
Speaker Change: I will now turn the call over to Dr. Larosa, who will give you an update on our oncology program to date, including one important milestone that we recently achieved.
Speaker Change: and on other potential upcoming milestones we expect to report later this calendar year.
Steve?
Steve: Thank you, Jim. First, I will discuss our Australian Oncology Study.
Steve: As most of you have hopefully seen, earlier this week we announced that the first patient was enrolled at the Royal Adelaide Hospital in Adelaide, Australia. We are excited to update that now with the enrollment of a second patient from the same hospital.
Steve: This marks a critical milestone for our oncology program and also constitutes great progress in the six months since we announced that we had preclinical data to support going forward with the clinical trial.
Steve: Additionally, Pindara Private Hospital in Gold Coast, Australia is now open for patient enrollment and is actively screening for eligible subjects.
Steve: Going forward, we expect to continue to enroll patients in this safety, feasibility, and dose-finding trial of the hemopurifier in patients with solid tumors who fail treatment with anti-PD-1 antibodies.
Steve: Two observations would support this. One is we're seeing active pre-screening logs from our sites.
Steve: And we are heartened by the fact that patients, as indicated by the two we've enrolled, have thought the study interesting enough and important enough to go ahead and sign and form consent to be in the trial.
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Steve: We are awaiting full ethics board approval from a third Australian hospital located in Sydney.
Steve: The Athlon team recently visited Australia between the 9th of October and the 16th of October of this year. On October 10th, we had a site visit with the lab of Professor George Grau at the University of Sydney.
Steve: who will be performing the Central Lab Extracellular Vesicle and T-cell studies on samples from patients enrolled in the study.
Steve: On October 11th, we had a highly interactive investigator meeting with members of all three Australian sites clinical research teams.
Steve: This was then followed by individual site visits to all three clinical sites for training on the use of the Athlon Hemopurifier.
Steve: Also in the second quarter, we received Ethics Committee approval from Medanta MediCity Hospital in India for a similar 9 to 18 patient safety, feasibility, and dose finding trial of the Hemopurifier.
Steve: We've secured a clinical trial agreement with this site as well. And enrollment can proceed once we have regulatory approval for importing of the devices by the Central Drugs Standard Control Organization, known as the CDSCO.
Steve: As a reminder, the primary endpoint of the approximate 9 to 18 patient safety, feasibility, and dose finding trial is safety.
Steve: The trials will monitor adverse events and clinically significant changes in lab tests of hemopurified treated patients with solid tumors
Steve: with stable or progressive disease at different treatment intervals after a two-month run-in period of the anti-PD-1 therapy, either Keytruda or Abdevo monotherapy.
and Steven Larosa. Thank you. We appreciate it.
Speaker Change: Patients who don't respond to the NTPD1 antibody therapy will be eligible to enter the hemopurifier phase of the study, where sequential cohorts will receive either one, two, or three hemopurifier treatments during a one-week period.
Speaker Change: In addition to monitoring for safety, the study is designed to examine the number of hemopurifier treatments needed to decrease the concentration of extracellular vesicles
Speaker Change: And if those changes in EV concentrations improve the body's own natural ability to attack tumor cells.
Speaker Change: These exploratory central laboratory analyses are expected to inform the design of a subsequent efficacy and safety trial, including a pre-market approval known as a PMA study required by the FDA and other regulatory agencies.
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Speaker Change: Please note that currently only approximately 30-40% of patients who receive the anti-PD-1 therapies Pembrolizumab or Novolumab will have a lasting clinical response to these agents.
Thank you.
Speaker Change: EVs produced by tumors have been implicated in the spread of cancers and the resistance of those agents to those agents, the anti-PD-1 therapies.
Speaker Change: The Athlon Hemopurifier has been designed to bind or remove these EVs from the bloodstream, which may improve these therapeutic response rates to anti-PD-1 antibodies.
Speaker Change: Attendee, James Frakes, Michael Miller, Steven Larosa Attendee, James Frakes, Michael Miller, Steven Larosa
Speaker Change: In the preclinical studies I mentioned, the hemopurifier has been shown to reduce the number of EVs in cancer patient plasma samples.
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Speaker Change: The company also continues to explore opportunities to expand the use of the hemopurifier as a treatment for life-threatening viral infections.
Speaker Change: In vitro, it has shown effectiveness in binding a large library of envelope viruses.
including those of recent
concern both domestically and internationally, including Marburg virus.
Lassa virus, dengue, SARS-CoV-2, and H5N1 bird flu.
Speaker Change: That said, we believe that we stand poised to respond in the event of an epidemic or outbreak involving an enveloped virus.
Speaker Change: With that, I'll turn the call back over to Jim for the financial discussion and he will then open it up for questions.
Thanks, Steve, and good afternoon again, everyone.
Jim: I will try to keep our financial overview brief with a focus on key points.
Jim: For a more detailed analysis, you can refer to the financial statements attached to our earnings release that just hit the wire, or in our soon-to-be-filed quarterly report on Form 10-Q.
Jim: As of September 30, 2024, Athlon Medical held a cash balance of approximately $6.9 million.
Jim: For the fiscal quarter ended September 30, 2024, our consolidated operating expenses were approximately $2.9 million.
Jim: which was a decrease from 3.2 million dollars in the same period of 2023.
Jim: This decrease of approximately $300,000 or 9% in the 2024 period was primarily driven by a decrease of approximately $600,000 in professional fees.
Jim: That was partially offset by an increase of approximately $200,000 in payroll and related expenses.
and approximately $100,000 increase in general and administrative expenses.
Jim: Approximate $600,000 reduction in professional fees was mainly attributed to several factors.
A $200,000 drop in contract labor expenses.
Jim: Following the completion of projects with contract manufacturing organizations and R&D consultants,
and an $81,000 decline in accounting fees.
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Jim: related to severance agreements following the termination of an executive and a workforce reduction.
Jim: However, this increase was partially offset by a $200,000 reduction in ongoing payroll expenses and a $100,000 decrease in stock-based compensation.
Jim: Due to completed vesting and expiration of options associated with our reduced headcount.
Speaker Change: General and administrative expenses increased by $100,000, mainly due to a $163,000 increase in costs related to our ongoing oncology clinical trial that Steve just discussed.
Speaker Change: That increase was partially offset by a $33,000 reduction in supply expense following the completion of R&D projects.
Speaker Change: along with a combined $20,000 decrease related to conference and insurance expenses.
Speaker Change: As a result of the factors I just noted, our net loss decreased to approximately $2.8 million in the fiscal quarter ended September 30, 2024, from approximately $3 million in the same quarter of 2023.
Now I would like to note and emphasize
Speaker Change: that if we exclude the $500,000 provision related to an employee termination.
are operating expenses decreased by approximately $700,000.
Speaker Change: Thank you for watching. Please subscribe to our channel. If you like our content, please click the like button. You can also follow us on Twitter, Facebook, Instagram, and Google+.
Speaker Change: We included these earnings results and related commentary in our press release issued this afternoon.
Speaker Change: The release also included the balance sheet for September 30, 2024, and the statements of operations for the three- and six-month periods ended September 30, 2024, and 2023.
Speaker Change: We will file our quarterly report on Form 10-Q following this call.
Speaker Change: Our next earnings call for the fiscal third quarter ending December 31, 2024.
Speaker Change: will coincide with the filing of our quarterly report on Form 10-Q in February 2025.
Speaker Change: And now, Steve and I would be happy to take any questions that you may have. Operator, please open the call for questions.
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star, then 1 on a touch-tone phone. If you are 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 and then 2.
Speaker Change: Our first question comes from Marla Morin with Zax. Please go ahead.
Thank you.
Hi.
Speaker Change: So, I have a few questions, if that's okay. I wanted to follow up on the, you know, launching, initiating patient enrollment in the study in Australia, which is, you know, obviously really exciting now.
Speaker Change: in terms of moving forward. Okay, so since this is designed to be a basket study, are the first two patients who've enrolled in the study representative of different solid tumor types?
Speaker Change: Yeah, hi Marla. Yeah, we're excited as well I'm glad to hear you're excited. Yes, so both of the patients have two of the tumor types that were described in the inclusion criteria I don't want for the for the sake of patient privacy. I don't want to divulge
Speaker Change: A lot of clinical information about the patients, but yeah, they had two representative tumors for people who are treated with NTPD-1. So different tumors. Two different tumor types, yeah.
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Got it. Okay. And then, so...
Speaker Change: The staff and the people who will be involved at the third location in Australia made sense to do because, you know, you were visiting Australia anyhow. But is it reasonable to think that, you know, given that you put the time and effort into that training process?
Speaker Change: that the company is highly confident that it will receive ethics committee approval at some point in your term.
Speaker Change: Yeah, the third site actually was able to piggyback on a prior ethics approval from another site since it's a Central Ethics Committee board in Bellbury.
Speaker Change: So we already actually have a contingent ethics board approval. We have to add on the radiation assessment. So that's how much, that's what's kind of.
Attendee, James Frakes, Michael Miller, Steven Larosa
Speaker Change: Again, the nice thing is they've been trained. We actually went to the site and trained the nephrologist and we were actually on a Zoom training call again last evening with the nephrologist. So we think they'll come up pretty quickly. Can you explain to Marla and the shareholders?
Speaker Change: What I mean by the radiation assessment is you have to get, what ethics boards want to know is how many x-rays do you need just for the sole purpose.
Speaker Change: of being in the study, and for this it's actually literally just a chest x-ray to confirm that your central venous catheter is in the right spot. So it's actually very minimal radiation that you receive for radiology just to be in this study. But again, it's a box that the ethics committees have to check.
Speaker Change: Right, okay, got it. So it sounds like it's really just pretty pro-form at this point. Yes, yeah, yeah. So we think we're getting there with that third site. And again, they're gonna be ready to hit the ground running because they've been trained.
Speaker Change: Okay, and then lastly, can you just remind us of, and Jim, I think this is probably more for you, but can you please remind us of what the whole rebate procedure is in Australia or maybe it's not referred to as a rebate, the 43% tax benefits that you're anticipating. Can you remind us of how the process works and what the timing on that will be? Sure, sure.
Speaker Change: And that is an important financial factor, besides the very good medicine and excellent hospitals and principal investigators we're working with. So to spur the development of their life science industry.
Australia has a 43 percent.
Speaker Change: I believe they call it a tax credit, but it's actually paid in cash, not as a tax credit as we would call it here in America. So, it's currently 43 cents on the dollar. So, any dollars spent in Australia
One time a year.
We can submit.
Michael Miller, Steven Larosa,
Speaker Change: to submit because we were just getting going, but that should be important in future years. And the central lab we're using is in Australia too, so we can apply that cost to that credit.
Speaker Change: Oh, that's interesting. Okay. Okay. Thanks very much. Thank you, Marla.
Speaker Change: And the next question comes from Jeremy Perlman with Maxim Group. Please go ahead.
Speaker Change: Hi, good afternoon. Thank you for taking my question. I'm actually on the line for Anthony Venditti. Just two quick questions. Number one,
I always thought in the past that the...
Speaker Change: The trial for India was actually just going to be part of this trial in Australia, just a separate branch. But now it seems, you know, reading the press release and on the call, it's a totally separate trial, but has the same, you know, safety endpoint. So just could you maybe explain a little why the, why you felt it necessary to hold a whole two trials with the same endpoint?
Speaker Change: So, when it comes to tumors, as well as EV measurements in the population, there are differences in the genetics, as well as in the
Speaker Change: the comorbid illnesses between, say, a population in Australia and in India. So we thought it was important to keep those as two discrete
Speaker Change: and not co-mingle them where there could be some confounding if there are differences in patient populations. But the designs, as you say, are the same. But we thought it was important to keep the patient population data sets distinct.
Speaker Change: Okay, understood and then going back to the trial in Australia, so you have you have two sites
Speaker Change: that are enrolling patients. And it seems like a third is really just around the corner. And now you have, you announced the first patient enrollment in just a couple days ago, and now a second. Do you have any more, a better visibility into when you think you'll conclude enrollment and when we could expect any sort of data from the trial? Right. So, in terms of, remember this is,
It's designed as a sequential.
Speaker Change: Escalating Cohort Study, where the first cohort gets one hemopurifier treatment, the second cohort gets two.
Speaker Change: and the third cohort gets three. There's supposed to be at least three completers.
Speaker Change: in those three cohorts, but to at least give you a sense of where we are right now. So as you said, we've enrolled two patients. They've gone through their screening activities. There's a number of tests that are done just to confirm that they're eligible after they sign consent and they have. So they're in what's called the run-in period.
Speaker Change: and they're getting EV measurements, extracellular vesicle measurements, and T-cell activity measurements.
and at the end of those two months...
Speaker Change: If their imaging reveals that their tumor is not improving, if it's stable or progressive disease, then they would get the hemopurifier treatment. So based on the two patients that we have currently, those people would presumably, if they have stable or progressive disease, get dosed.
Speaker Change: with the Hemopurifier in January. Now, that's when we get our first data in terms of safety, which again is the primary endpoint.
That would be followed once the whole cohort is done.
Speaker Change: in this month and next month. When we're done with the whole cohort.
Speaker Change: Three months after that, we would actually have our first tranche of EV data and T cell data.
Speaker Change: So that would probably bring you out sometime into the summer.
Speaker Change: We will report after we get the data for each cohort, Jeremy.
Wait until the end, the true end of the study.
Speaker Change: All right, understood. So is it also safe to say that because you have the two-month run-in period where you have to see if the patient responds to the anti-PD-1 treatment, so you might actually enroll more patients and then...
Speaker Change: to play it safe and because you know hopefully some of them will respond and then for those who don't so you'll have a larger pool to pull from.
Speaker Change: That's right, right, so we're going to keep it for each cohort We're going to keep enrolling until we have sufficient numbers to complete those treatment cohorts with hemopurifier So you're right to know if you if you estimate 70% of people don't improve You're going to have to enroll a few probably a few more patients just to fill the cohort
Speaker Change: Thank you for taking my questions. I'll hop back in. Thank you, Jeremy.
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Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to Jim Frakes for any closing remarks.
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Jim Frakes: Thank you again for joining us today to discuss our fiscal second quarter results.
Jim Frakes: We look forward to keeping you up to date on future calls.
Goodbye.
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