Aethlon Medical, Inc. (NASDAQ:AEMD) is a medical therapeutic company focused on developing the Hemopurifier, a clinical-stage immunotherapeutic device designed to combat cancer and life-threatening viral infections. The company has made significant progress in advancing its oncology trials for the Hemopurifier, with recent approvals from ethics committees in Australia and India paving the way for patient enrollment.
Business Overview
Aethlon's lead product, the Hemopurifier, is a therapeutic blood filtration system that can bind and remove harmful particles from blood, including cancer-associated exosomes and life-threatening viruses. In cancer, the Hemopurifier is designed to deplete the presence of circulating tumor-derived exosomes that promote immune suppression, seed the spread of metastasis, and inhibit the benefit of leading cancer therapies. The FDA has designated the Hemopurifier as a "Breakthrough Device" for two independent indications: the treatment of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy, and the treatment of life-threatening viruses that are not addressed with approved therapies.
Oncology Trials Progressing
Aethlon has received approval from the Human Research Ethics Committee of the Central Adelaide Local Health Network in Australia for a safety, feasibility, and dose-finding clinical trial of the Hemopurifier in cancer patients with solid tumors who have stable or progressive disease during anti-PD-1 monotherapy treatment, such as Keytruda or Opdivo. This is a significant milestone, as the company can now submit to the Therapeutic Goods Administration, the National Health Regulatory Agency of Australia, and obtain approval from the Central Adelaide Local Health Research Governance Committee to begin enrolling patients.
The company anticipates several upcoming potential value-creating milestones, including submission to the ethics committees at two additional sites in Australia and one in India, with the expectation of possibly receiving approval from one or more of those three hospitals in the September quarter of 2024. Once these approvals are obtained, Aethlon expects to be able to enroll patients at these additional sites by the end of 2024.
The primary endpoint of the approximately 18-patient safety, feasibility, and dose-finding trial is safety. The trial will monitor any adverse events and clinically significant changes in lab tests of Hemopurifier-treated patients with solid tumors and progressive or stable disease after a two-month run-in period of anti-PD-1 antibody therapy. In addition to monitoring safety, the study is designed to examine the number of Hemopurifier treatments needed to decrease the concentration of extracellular vesicles (EVs), and if these changes in EV concentration improve the body's own natural ability to attack tumor cells. These exploratory central laboratory analyses are expected to inform the design of a subsequent efficacy and safety trial, including a pre-market approval (PMA) study required by the FDA and other regulatory agencies.
Viral Infection Trials Ongoing
Aethlon is also maintaining a position in the use of its Hemopurifier as a treatment against life-threatening viral infections through its COVID-19 trial in India. The company has two participating sites for this trial, Medanta Medicity Hospital and Maulana Azad Medical College, and one patient has been treated thus far. However, the company has been informed by its contract research organization that a new COVID-19 subvariant was recently detected in India. The COVID-19 trial in India remains open in the event that there are COVID-19 admissions to the intensive care unit at these two participating sites.
Financials
For the fiscal year ended March 31, 2024, Aethlon Medical reported a net loss of $12.2 million, compared to a net loss of $12.0 million in the prior fiscal year. The company's consolidated operating expenses for the fiscal year ended March 31, 2024, were approximately $12.6 million, compared to approximately $12.5 million for the fiscal year ended March 31, 2023, an increase of approximately $164,000.
The increase in operating expenses was primarily due to an increase in payroll and related expenses of approximately $763,000, partially offset by decreases in general and administrative expenses of approximately $578,000 and professional fees of approximately $21,000. The increase in payroll and related expenses was primarily due to separation expenses for the company's former Chief Executive Officer of $862,000, an increase of $127,000 associated with an increase in average headcount, partially offset by a decrease in stock-based compensation of $226,000.
The decrease in general and administrative expenses was primarily driven by a decrease of $819,000 in clinical trial expenses related to the closed U.S. COVID-19 clinical trial, a decrease of $280,000 in subcontract expense related to contracts and grants with the National Institutes of Health, a $99,000 decrease in rent expense associated with a mobile clean room leased in the prior year, a decrease of $30,000 in travel-related expenses, and a decrease of $22,000 in various other general office and operating expenses. These decreases were partially offset by an increase of $405,000 in manufacturing and R&D supplies.
The decrease in professional fees was primarily due to a decrease in outside scientific product research and regulatory services of $303,000, a decrease of $60,000 in recruiting fees, and a $33,000 decrease in legal fees. These decreases were partially offset by increases in investor relations of $151,000, accounting fees of $137,000, and board of director fees of $34,000, and outside operational and administrative expenses of $53,000.
As of March 31, 2024, Aethlon Medical had a cash balance of approximately $5.4 million. As of June 25, 2024, the company had a cash balance of approximately $9.1 million, providing it with the necessary resources to continue advancing its clinical trials and research and development efforts.
Outlook
Aethlon is focused on advancing its oncology trials for the Hemopurifier, with the recent approval from the Human Research Ethics Committee of the Central Adelaide Local Health Network in Australia being a significant milestone. The company anticipates several upcoming potential value-creating milestones, including submission to the ethics committees at two additional sites in Australia and one in India, with the expectation of possibly receiving approval from one or more of those three hospitals in the September quarter of 2024.
Once these approvals are obtained, Aethlon expects to be able to enroll patients at these additional sites by the end of 2024. The primary endpoint of the approximately 18-patient safety, feasibility, and dose-finding trial is safety, but the study is also designed to examine the number of Hemopurifier treatments needed to decrease the concentration of extracellular vesicles and if these changes improve the body's own natural ability to attack tumor cells.
In addition to the oncology trials, Aethlon is maintaining a position in the use of its Hemopurifier as a treatment against life-threatening viral infections through its COVID-19 trial in India. The company remains open to enrolling patients at the two participating sites in the event of COVID-19 admissions to the intensive care unit.
Risks and Challenges
Aethlon faces several risks and challenges, including the need for additional financing to sustain its operations and achieve its business objectives, the company's limited experience in identifying and working with large-scale contracts with medical device manufacturers, and the potential for delays or interruptions in the supply of important materials for the Hemopurifier. Additionally, the company's Hemopurifier technology may become obsolete, and it must comply with extensive regulations of U.S. and foreign regulatory agencies to commercialize its products.
Conclusion
Aethlon Medical is making significant progress in advancing its oncology trials for the Hemopurifier, with recent approvals from ethics committees in Australia and India paving the way for patient enrollment. The company's focus on exploring the Hemopurifier's potential in multiple cancer types, as well as its ongoing efforts in viral infection trials, demonstrate the broad applicability of its technology. While the company faces several risks and challenges, its strong cash position and the promising data from its preclinical studies suggest that Aethlon may be well-positioned to capitalize on the growing demand for innovative cancer and infectious disease treatments.