On August 9, 2022 Aethlon Medical, Inc. (Nasdaq: AEMD), a medical therapeutic company focused on developing products to diagnose and treat cancer and life threatening infectious diseases, reported financial results for its first quarter ended June 30, 2022 and provided an update on recent developments (Press release, Aethlon Medical, AUG 9, 2022, View Source [SID1234617969]).
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Company Updates
Aethlon Medical is continuing the research and clinical development of its Hemopurifier, a therapeutic blood filtration system that can bind and remove life-threatening viruses and harmful exosomes from blood. This action has potential applications in cancer, where cancer associated exosomes may promote immune suppression and metastasis, and in life-threatening infectious diseases, including removal of COVID-19 virus, associated variants, and related exosomes.
We recently published a peer-reviewed manuscript demonstrating that Aethlon’s proprietary GNA affinity resin, a key component of the Hemopurifier, was able to bind seven clinically relevant SARS-CoV-2 variants in vitro, including the Delta and Omicron variants. Viral capture efficiency with the GNA affinity resin ranged from 53% to 89% for all variants tested. The findings from this paper suggest that the Hemopurifier should be able to bind any future SARS-CoV-2 variants that may potentially arise. The manuscript is titled "Removal of Clinically Relevant SARS-CoV-2 Variants by An Affinity Resin Containing Galanthus Nivalis Agglutinin" and was published in PLOS ONE on July 28, 2022.
We continue to advance our severe COVID-19 clinical trial for the Hemopurifier under our open Investigational Device Exemption (IDE) 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 (CRO), PPD, Inc. On July 6, 2022, the U.S. Food and Drug Administration (FDA) approved a supplement to our COVID-19 trial. The newly approved protocol supplement eliminates the inclusion criteria that patients must have a dialysis catheter in place and have tolerated dialysis at the time of screening. This change should improve the feasibility of enrolling new patients into our study. The active sites are currently submitting this supplement to their IRBs, and we expect to have their approvals in August and September 2022.
Medanta Medicity Hospital, a multi-specialty hospital in Delhi NCR, India, has enrolled one patient in our COVID-19 trial in India and continues to actively screen patients. Our CRO, Qualtran LLC, has identified 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 accepted by the FDA, this change would increase the eligible population for the study. We are currently drafting a protocol for a new clinical trial to allow us to examine the effects of the Hemopurifier in multiple tumor types where the cancer has progressed, following a two-month period of checkpoint inhibitor therapy.
Given the ongoing outbreak of monkeypox virus (MPXV), Aethlon is commissioning a new in vitro binding experiment to confirm that the Hemopurifier effectively captures the current strain of that virus. In 2008, we conducted an in vitro study that demonstrated that the Hemopurifier effectively bound and removed MPXV. We believe that the Hemopurifier’s ability to bind the current MPXV strain should not be affected because the mutations present in this strain do not change the mannose sugar in the viral envelope, which is recognized by the GNA within the Hemopurifier resin.
For more context regarding the 2008 study, we commissioned Battelle Memorial Institute to run an MPXV in vitro study using a miniature version of our Hemopurifier. This study demonstrated that high concentrations of MPXV, approximately 35,000s GPUs per mil, were rapidly depleted from cell culture fluids when circulated through the Hemopurifier. The study indicated that the Hemopurifier removed 44% of monkeypox virus in the first hour of testing, 82% after six hours, and 98% after 20 hours. The studies were conducted in triplicate and data verification was provided by real time polymerase chain reaction (PCR).
We continue to monitor MPXV caseload and disease severity. We have contacted the FDA and confirmed the process by which we could provide the Hemopurifier to requesting physicians for single patient emergency use. On August 4, 2022, the U.S. Department of Health and Human Services (DHHS) officially declared Monkeypox a health emergency. An Emergency Use Authorization (EUA) declaration has not yet been made. We plan to submit a pre-EUA package to the FDA so as to be prepared in the event this declaration occurs.
Financial Results for the First Quarter Ended June 30, 2022
As of June 30, 2022, Aethlon Medical had a cash balance of approximately $14.9 million.
Consolidated operating expenses for the three months ended June 30, 2022, were approximately $2.91 million, compared to $2.23 million for the three months ended June 30, 2021. This increase of approximately $680,000, or 30%, in the 2022 period was due to increases in our general and administrative expenses of approximately $402,000, in our professional fees of approximately $261,000 and in our payroll and related expenses of approximately $13,000.
The $402,000 increase in our general and administrative expenses in the June 30, 2022, quarter was primarily due to the combination of a $161,000 increase in our clinical trial expenses, a $97,000 increase in supplies, a $91,000 increase in our rent expense and a $27,000 increase in our insurance expense.
The $261,000 increase in our professional fees was primarily due to the combination of a $154,000 increase in our contract labor expense associated with product development and analytical services and a $95,000 increase in professional fees associated with regulatory strategy services
The $13,000 increase in our payroll and related expenses was due to an increase in our stock-based compensation expense of $95,000. Our cash-based compensation expense decreased by $82,000 because our CEO received a $215,000 bonus in the June 2021 period for achieving certain contractual milestones in his employment agreement and there were no bonuses paid out in the June 2022 period.
Aethlon did not record any revenue related to our government contracts with the NIH in the three months ended June 30, 2022, compared to approximately $132,000 in the three months ended June 30, 2021. As of June 30, 2022, the Company had approximately $459,000 of deferred revenue related to those contracts as a result of not achieving certain milestones in those contracts.
As a result of the changes in revenues and expenses noted above, Aethlon’s net loss before noncontrolling interests increased to approximately $2.9 million for the three months ended June 30, 2022, from approximately $2.1 million for the three months ended June 30, 2021.
During the three months ended June 30, 2022, the Company raised approximately $619,000 in net proceeds under our ATM agreement with H.C. Wainwright & Co., pursuant to sales of our common stock. In July and August 2022 to date, the Company raised approximately $8.3 million under our ATM agreement through sales of our common stock.
The unaudited condensed consolidated balance sheet for June 30, 2022, and the unaudited condensed consolidated statements of operations for the three months ended June 30, 2022 and 2021 follow at the end of this release.
Conference Call
The Company will hold a conference call today, Tuesday, Aug. 9, 2022, at 4:30 p.m. EDT to review financial results and recent corporate developments. Following management’s formal remarks, there will be a question-and-answer session.
Interested parties can register for the conference by navigating to View Source
Please note that registered participants will receive their dial in number upon registration.
A replay of the call will be available approximately one hour after the end of the call through July 28, 2022. The replay can be accessed via Aethlon Medical’s website or by dialing 1-877-344-7529 (domestic) or 1-412-317-0088 (international) or Canada Toll Free at 1-855-669-9658. The replay conference ID number is 2740523.