Yahoo Finance Aethlon Medical, Inc. (NASDAQ:AEMD) Q4 2024 Earnings Call Transcript
Aethlon Medical, Inc. (NASDAQ:AEMD) Q4 2024 Earnings Call Transcript June 27, 2024
Aethlon Medical, Inc. beats earnings expectations. Reported EPS is $-0.91, expectations were $-1.18.
Operator: Good day and welcome to the Aethlon Medical Fiscal Year End of 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions]. 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 sir.
Michael Miller: Thank you, operator and good afternoon everyone. Welcome to Aethlon Medical’s fiscal year end 2024 earnings conference call. My name is Michael Miller with Rx Communications. At 4:15 p.m. Eastern Time today, Aethlon Medical released financial results for its fiscal year end March 31, 2024. If you have not seen or received Aethlon Medical’s earnings release, please visit the Investors page at www.aethlonmedical.com. Following this introduction and the reading of the company’s forward-looking statement, Aethlon’s Interim Chief Executive Officer and Chief Financial Officer, James Frakes; and Aethlon’s Chief Medical Officer, Dr. Steven LaRosa, will provide an overview of Aethlon’s strategy and recent developments.
Mr. Frakes will then make some brief remarks on Aethlon’s financials. We will then open up the call for the Q&A session. Before I hand the call over to Mr. Frakes, 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 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 can be found under the caption Risk Factors in the company’s annual report on Form 10-K for the fiscal year end March 31, 2023, and the company’s most recent quarterly report on Form 10-Q and in the company’s other filings with the Securities and Exchange Commission, except as maybe required by law, the company does not intend nor to undertake any duty to update this information to reflect future events or circumstances. With that, I’ll now turn the call over to Mr. James Frakes, Aethlon’s Interim Chief Executive Officer and Chief Financial Officer.
James Frakes: Thank you, Mike. And I would like to thank all of you for dialing in. This is Jim Frakes. Aethlon Medical is continuing the research and clinical development of its Hemopurifier, 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 potential applications in oncology, where cancer-associated exosomes may promote immune suppression and metastases, and in life-threatening and infectious diseases. Aethlon is also investigating the use of the Hemopurifier in the organ transplant setting, initially focusing on the potential removal of viruses and exosomes with harmful cargo from recovered kidneys.
Dr. Steven LaRosa will give you an update on our efforts to date on the oncology front and on potential milestones that we hope to achieve later on this year. However, before I turn the call over to Dr. LaRosa, I want to note that we've received multiple inquiries regarding the current multi-state outbreak of H5N1 Avian Influenza virus in dairy cattle. While the Hemopurifier has demonstrated the ability to capture prior iterations of the H5N1 bird flu virus in in-vitro experiments, we have not tested the Hemopurifier against the current strain, nor have there been many cases of the current strain infecting humans. The company will continue to monitor the situation and provide any potential updates as needed. It's also worth noting that in April 2024, the U.S. Food and Drug Administration approved our internal manufacturing facility under our virology IDE.
With that, I will now turn the call over to Dr. Steven LaRosa, Aethlon's Chief Medical Officer.
Steven LaRosa: Thank you, Jim. As announced on June 18, 2024, the Human Research Ethics Committee of the Central Adelaide Local Health Network granted full ethics approval for Aethlon's safety, feasibility, and dose-finding clinical trials of the Hemopurifier in cancer patients with solid tumors who have stable or progressive disease during anti-PD-1 monotherapy treatment, such as Keytruda, pembrolizumab, or Opdivo, nivolumab, which is known as the AEMD-2022-06 Hemopurifier study. The approval is valid for three years until June 13, 2027. The trial will be conducted by Professor Michael Brown and his staff at the Cancer Clinical Trials Unit, Central Adelaide Local Health Network, Royal Adelaide Hospital located in Adelaide, Australia.
Currently, only approximately 30% of patients who receive pembrolizumab or nivolumab will have a lasting clinical response to these agents. Extracellular vesicles produced by tumors have been implicated in the spread of cancers, as well as resistance to these anti-PD-1 therapies. The Aethlon Hemopurifier has been designed to bind and remove these extracellular vesicles from the bloodstream, which may improve therapeutic response rates to anti-PD-1 antibodies. In preclinical studies, the Hemopurifier has been shown to reduce the number of exosomes from the plasma of cancer patient samples. During the fourth quarter and subsequent period, we have continued to make significant progress advancing towards our planned, safety, feasibility, and dose finding oncology trials in Australia and India, punctuated by the recent approval from the Human Research Ethics Committee at Central Adelaide Local Health Network.
Upon submission to the Therapeutic Goods Administration, which is the National Health Regulatory Agency of Australia, obtaining approval from the Central Adelaide Local Health Research Governance Committee, and conducting a site initiation visit, we expect that we will be able to enroll and treat the first patient either in the September quarter or in the December quarter. We anticipate 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 2024, after which we expect to be able to enroll patients at these additional sites by the end of 2024.
As a reminder, the primary end point of the approximate 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 with progressive or stable disease after a two-month run-in period of anti-PD-1 antibodies, Keytruda, or Opdivo. Patients who do not respond to the PD-1 antibody therapy will be eligible to enter the Hemopurifier period of the study, where sequential cohorts will receive one, two, or three Hemopurifier treatments during a one-week period. In addition to monitoring safety, the study is designed to examine the number of Hemopurifier treatments needed to decrease the concentration of 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 noted as a PMA study required by the FDA and other regulatory agencies. The company 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. There are two participating sites for this trial, Medanta Medicity Hospital and Maulana Azad Medical College. 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.
With that, I'll turn the call back over to Jim for the financial discussion, and then open up for questions.
James Frakes: Thank you, Steve, and good afternoon again to everyone. Before I turn to the financial matters, I just want to say after being in this position for about six months. I'm very pleased and excited that we are moving forward now with this clinical trial and we're excited. On to the finances. As of March 31, 2024, Aethlon Medical had a cash balance of approximately $5.4 million. And as of June 25, 2024, we had a cash balance of approximately $9.1 million. And as I've been previously encouraged not to cover our expenses on such a granular basis, like I had done previously, I'll try to keep my remarks at a higher level this quarter. You'll find detailed expense information on the financial statements attached to our earnings release that just hit the wire, or in our soon-to-be-filed report on Form 10-K.
Our 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. This increase in the fiscal year ended March 31, 2024, was due to an increase in payroll and related expenses of approximately $763,000, partially offset by decreases in G&A expenses of approximately $578,000, and in professional fees of approximately $21,000. The approximate $763,000 increase in payroll and related expenses was primarily due to separation expenses for the company's former Chief Executive Officer of $862,000. And we had an increase of $127,000 associated with an increase in average headcount, and those were partially offset by a decrease in stock-based comp of $226,000.
The approximate $578,000 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 associated with a former remote employee, and a decrease of $22,000 in expenses related to various other general office and operating expenses. These decreases were partially offset by an increase of $405,000 in manufacturing and R&D supplies related to manufacturing Hemopurifier devices and various R&D activities.
And the approximate $21,000 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 a result of the factors I just mentioned, Aethlon's net loss increased to $12.2 million for the fiscal year ended March 31, 2024, from $12.0 million for the fiscal year ended March 31, 2023. We included these earnings results and related commentary in a press release issued earlier this afternoon.
That release included the balance sheet for March 31, 2024, and the statements of operations for the fiscal years ended March 31, 2024 and 2023. We will file our annual report on Form 10-K following this call. Our next earnings call for the fiscal first quarter ending June 30, 2024, will coincide with the filing of our quarterly report on Form 10-Q in August 2024. And now, Steve and I would be happy to take any questions that you may have. Operator, please open the call for questions.
While we acknowledge the potential of AEMD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
To continue reading the Q&A session, please click here.
