Zacks Small Cap Analysis – OTC Markets Hosts Digital Investor Presentation with Jim Frakes, Interim CEO & CFO, and Steven LaRosa, MD, Chief Medical Officer, of Aethlon Medical Inc., with Marla Marin, Senior Analyst at Zacks SCR – Cyber Tech

NASDAQ:AEMD

Anthony Krause: Hiya and welcome to Digital Investor Conferences. My identify is Anthony Krause, and on behalf of OTC Markets and our co-host, Zacks Small Cap Analysis, we’re more than happy you will have joined us for our subsequent dwell presentation from Aethlon Medical. Their session might be moderated by Marla Marin, senior Analyst at Zacks Small Cap Analysis. Please observe that you may submit questions for the presenter within the field to the left of the slides. You may as well view an organization’s availability for one-on-one conferences by the Schedule Conferences tab on the convention platform. At this level, I am more than happy to welcome Jim Frakes, interim CEO and CFO, and Steven LaRosa, MD, Chief Medical Officer of Aethlon Medical Inc., Which trades on NASDAQ beneath the image AEMD. Welcome, Jim, Steven, and Marla.

Marla Marin: Thanks. Hello, Jim. Hello, Steve. Thanks for making time for this. Let’s begin by getting a bit of little bit of details about the fundamentals. What’s the Hemopurifier?

Steven LaRosa: Hello, Marla. The Hemopurifier is displayed. You’ll be able to see it earlier than you. It is an extracorporeal medical system. It is an investigational system meant to be inserted inside a veno-venous circulation by way of a blood pump. It’s actually composed of three facets. It separates plasma, measurement excludes molecules lower than 200 to 500 nanometers, and it affinity binds. The way in which it is displayed in entrance of you exhibits it has two ports on the finish. That is the place the blood enters and exits. The blood enters the system and goes into the lumen inside these fibers, the white materials you may see. Then, it has pores of roughly 200 to 500 nanometers. Molecules and plasma flow into by these pores to the realm round it. You’ll be able to see within the image. The surface of these fibers is our proprietary affinity resin, which consists of medical-grade diatomaceous earth covalently certain to a plant lectin generally known as GNA.

SL: That is the particular sauce of the system. Because the plasmas traverse the surface of these fibers, they encounter the resin buildings with a sugar known as mannose on their surfaces, seen in envelope viruses and extracellular vesicles certain by the GNA and faraway from the plasma. The plasma, because it comes throughout the system, then will reenter the lumen of the system to rejoin the mobile components, the purple blood cells, white cells, and platelets, after which return to the affected person in order that no nothing is misplaced, no plasma needs to be administered to the affected person. It has breakthrough system designation in each life-threatening viral infections and oncology.

MM: Thanks. And I do know you have accomplished plenty of preclinical analysis on the efficacy of the Hemopurifier. What does your preclinical database seem like?

SL: Certain. We’ve each a preclinical and a scientific database. On the scientific facet, we’ve got a security database involving 38 sufferers who’ve been handled and 164 distinctive Hemopurifier periods. The system has been broadly tolerated fairly properly. To reply your query in regards to the preclinical facet of issues, there are two facets to preclinical testing. One is security, and we have gone by all the usual preclinical testing, which incorporates genotoxicity, biocompatibility, and hemocompatibility. We’ve that database. The opposite a part of preclinical knowledge is the nonclinical efficiency of the system. I am going to communicate briefly about three areas, focusing lastly on oncology, the corporate’s principal focus. The primary is in virology. As I mentioned, we’re in life-threatening viral infections. Most enveloped viruses are coated in a sugar substance, together with mannose, which is the goal for our system.

SL: We have examined a wide selection of enveloped viruses in opposition to our system, using a miniature model of the Hemopurifier you see there. We’ve seen a broad-spectrum removing of envelope viruses, together with some well timed vital viruses that persons are involved about, similar to dengue and different Flaviviruses and chicken flu, which has been within the information recently. H5N1 has been eliminated in vitro. Dengue, which we’re seeing circumstances domestically acquired within the US, has additionally been eliminated. SARS-CoV-2, each the spike protein and the numerous variants, has been eliminated. We’ve a broad panel of enveloped viruses. That is vital as a result of it is possible that if there’s going to be one other outbreak or pandemic, it is in all probability going to be with an enveloped virus. We might stand poised to check this new virus in vitro after which go to the following step of scientific trials if the preclinical knowledge bore that out.

SL: That is vital. I am going to briefly point out our preclinical work in transplant organs. After they’re recovered from a affected person from donors, they’re usually placed on a machine perfusion circuit earlier than going into recipients to keep up their viability. What’s been famous is that extracellular vesicles are launched from these organs and play a task in delayed graft operate within the recipient. With that in thoughts, we did some in vitro work with perfusates following machine perfusion of organs, ran them over our Hemopurifier in our lab, and confirmed a discount in each extracellular vesicles and their cargo microRNAs implicated in poor operate. We simply posted that on the preprint server bioRxiv. That is virology and transplant. Our focus is on oncology. I need to speak about preclinical knowledge in oncology.

SL: Three principal knowledge sources have supported the scientific trials, which I am positive we’ll speak about. One is we’ve got an experiment the place we obtained preclinical samples from sufferers on numerous totally different tumor varieties, together with breast, esophageal, head, and neck most cancers. We took these samples, remoted the extracellular vesicles out of the samples, put them in a buffered answer, and ran them over a miniature model of our Hemopurifier. Whatever the tumor sort, we noticed between 92 and 99% removing of the extracellular vesicles throughout that circuit. That knowledge was offered in 2020 on the AACR assembly. We adopted that up extra just lately. We thought it was vital to display that we’re eradicating extracellular vesicles instantly from plasma since that is essentially the most related to a scientific trial.

SL: We obtained plasma from a affected person with non-small cell lung most cancers, ran it over a miniature model, and confirmed that we are able to instantly take away the EVs from plasma itself, not EVs in plasma. The third piece of knowledge that helps help our trial is we did compassionate, use emergency use; we did eight remedies on a affected person with extreme COVID. Now, this affected person did not have malignancy, however what was vital in that is that we have been truly capable of measure extracellular vesicle ranges in that affected person all through the eight remedies and confirmed reliably that all through the eight remedies, the extracellular vesicle focus went down in addition to microRNAs that have been concerned in organ operate. Our first demonstration was that we may take away extracellular vesicles within the in vivo setting. With these three items of knowledge, we have been glad that we had good preclinical knowledge to help going into the clinic.

Jim Frakes: Steve, we should always outline EVs and exosomes a bit.

SL: Nice, nice level. So, extracellular vesicles are small. They’ve a bilayer lipid construction. They’re launched from the obvious cell. They’re launched from all cell varieties. They’re significantly launched in giant quantities from tumor cells, and people EVs are likely to have extra mannose on them. EVs are concerned in cell-to-cell communication. They carry cargo and a payload, if you’ll, with quite a lot of buildings, together with microRNAs, that give a sign to the receiving cells. So why that is vital in malignancy is that the cargo within the EVs from the tumor cells contributes to metastasis or unfold of the tumor, development of recent blood vessels feeding the tumor, and microRNAs that suppress the physique’s immune system. The speculation is that in cancers for those who take away or debulk the physique of these EVs from the tumor cells, you may enhance responses to most cancers remedy.

MM: Obtained it. That is the suitable method for us to consider it. These EVs might be dangerous, and also you consider the system might help take away them. Let’s speak in regards to the scientific trial you are about to embark on. If you wish to give us some details about the trial, about the way it’s designed, that will be very useful to the listeners.

SL: Certain. When desirous about going into, and once more, that is our first foray into oncology, desirous about methods to construction an intervention. That is an extracorporeal circuit, so it entails placing a vascular catheter in and placing any person’s circulation over a tool. You need to go initially right into a inhabitants that is not going simply to be handled adequately with an oral drug or an IV drug. There needs to be some potential extra profit to the affected person. With that in thoughts, we selected to enter a inhabitants receiving a checkpoint inhibitor agent. The medication that you simply’re in all probability most acquainted with are Keytruda and OPDIVO. These immune checkpoint inhibitors block anti-PD-1, a suppressing molecule in most cancers. These medication have been revolutionary.

SL: There are lots of most cancers varieties for which individuals would have their illness would’ve progressed, and so they’ve died however at the moment are residing. The issue is that solely about 30 to 40% of sufferers who obtain these medication have a long-lasting scientific response. This implies there’s an unlucky 60 to 70% which are going to go on to salvage therapies of unproven efficacy and have plenty of toxicity. After we considered structuring a trial, we mentioned, let’s choose a inhabitants for which they will get their commonplace of care with their anti-PD-1 remedy, both Keytruda or OPDIVO. They will get it as they usually would by their physician for the primary two months. We’ll measure extracellular vesicles. We’ll measure their physique’s T-cell means to struggle tumors whereas they’re getting that. Then, they will get checked at two months as a part of the usual of care.

SL: If they don’t seem to be bettering, we’d put them on the Hemopurifier after which see what occurs to their extracellular vesicular ranges of their physique’s T cell tumor-fighting means. That is the best way it is structured. It is structured as a security and feasibility examine. The primary vital factor is whether or not this affected person inhabitants tolerates this remedy. That is the primary focus. However constructed into the examine can also be, once more, what’s the system doing to the extracellular vesicle concentrations, the T-cell combating means, and the way usually do it’s a must to administer such a remedy to have lasting responses on these two components. The Hemopurifier part of the examine is finished in three sequential cohorts. The primary cohort will get a single Hemopurifier remedy throughout a given week. The second cohort will get two weekly Hemopurifier remedies, so, say, Monday and Friday.

SL: Within the third cohort, they’d get it thrice every week, say, Monday, Wednesday, and Friday. There will be a cease after every of these cohorts, the place the information security monitoring board will look to make sure there is not any dose toxicity. Nevertheless, we will even get readouts from our central lab on these extracellular vesicles and T-cells so we are able to begin making some selections. We’ll observe these labs out for eight weeks after the Hemopurifier remedy. We’ll additionally observe the sufferers out for a 12 months to see their scientific efficiency. Nevertheless, the trial is a small security examine. It will not give us the final word willpower of scientific efficacy. Nonetheless, it should give us the organic sign and the security to justify if we need to go on to a real efficacy trial.

MM: Obtained it. The speculation is that the Hemopurifier, at the side of Keytruda and different checkpoint inhibitors, can transfer the needle on that 60 to 70% of the inhabitants that doesn’t reply long-term to the remedy.

SL: Yeah. To broaden on that, you’re eradicating extracellular vesicles that can possible play a task in resistance. I am going to use the time period resistance to these therapies and say that by eradicating these, you may resuscitate the response to these therapies. So, transfer the needle from 30-40% to one thing significantly better.

MM: Obtained it. Nice. What stage are you in? You’ve got had plenty of information movement just lately. What stage are you at relating to the scientific trial, together with right now’s information, which I do not know if everybody had an opportunity to see?

SL: Yeah, we have been very busy, which is sweet within the scientific trial and biotech. We’re having an analogous trial being accomplished in two international locations. One is in Australia, and one is in India. In Australia, we’ve got recognized three websites which are extremely expert at such trials and who we’re concerned with. We have already got one website that has gone by all the course of and being open and energetic for enrollment. They may display screen sufferers right now and tomorrow, and once they discover an eligible affected person, they will enroll. That is at Royal Adelaide, the scientific trials unit with an extended historical past of doing glorious work on this house. They’re open. That is the examine open for enrollment in that nation with that website. On the heels of that, a second website, Pindara Hospital in Queensland, has additionally accomplished the entire ethics approval and governance course of.

SL: Within the subsequent few weeks, there will be a website initiation go to and formal coaching on the protocol procedures. We anticipate that that website will even be open for enrollment earlier than the top of this month. Then, we’ve got a 3rd website in Sydney that can undergo the identical ethics committee as Pindara that I simply talked about, which is submitted to be added to the ethics committee approval for Pindara. That is occurring proper now. That can then be adopted by governance. Proper now, there’s one open website, and there’ll quickly be two open websites by the top of the month. Enrollment and screening can now happen in Australia.

SL: The opposite trial is in India. It is Medanta Medicity Hospital, which we’ll in all probability speak about extra, but it surely has a storied historical past in scientific trials and this house. At present, we introduced that their ethics committee had permitted the examine. We are going to observe up shortly with finishing our scientific trial settlement, budgeting, and the import and export licenses wanted to ship samples and units. We anticipate they will even come on-line earlier than the top of the 12 months. There was plenty of exercise within the final couple of months. It’s extremely thrilling.

MM: Proper. Sure. A whole lot of exercise. You’re speaking particularly about doing most of this exercise in Australia and India. Why did you conduct the preliminary scientific trials in these two markets? Are you able to give us some colour on that?

JF: Australia has an extended historical past of doing vital early-stage scientific trial work in medication, medical units, and world-class medical hospitals and physicians. In addition they have a really fascinating and useful life science tax credit score association for all times science work as a result of they need to construct their trade in Australia. We’re collaborating in that program. We will rise up to 43 cents on the greenback again of {dollars} we spend in Australia on this scientific trial. That is not a tax credit score; it is money we’d get again every year. That is very useful in protecting the prices down. These hospitals that Steve simply talked about are glorious.

JF: They’ve accomplished plenty of scientific trials, and that is why we began there. That specific hospital, Medanta Medicity, can also be a world-class establishment in India. The physicians there are world-class as properly. That group of nephrologists at Medanta Medicity has in all probability accomplished 120 human remedies with the Hemopurifier. They’re the world’s consultants in utilizing our units. They’re large supporters, and we’re supporters of theirs. It simply made sense to work with that group as soon as once more. That is why we give attention to these two international locations internationally first, after which we’ll flip to the US afterward.

MM: Okay. Understood. All the things is shifting alongside in a short time towards scientific analysis very shortly. Are there different firms you recognize within the total medical system house that at present produce other units or cartridges beneath improvement? If you’re conscious, are you able to inform us the way you see these competitively versus what you attempt to do?

JF: Certain. A number of smaller publicly held medical system firms have extracorporeal cartridges like ours. None of them are targeted on most cancers. Nevertheless, the businesses usually talked about by our traders and potential traders that observe are CytoSorbents Company are their tickers, CTSO, whose market cap is about 66 million. SeaStar Medical has about 21 million in market cap, and Spectral Medical is a Canadian firm with about 142 million in market cap. They’re largely targeted on irritation discount and sepsis. We’re not conscious of any work they’re doing in oncology. There are a number of different small, privately held firms. By way of the general public potential comps, despite the fact that they don’t seem to be comps as a result of their mechanism of motion differs from ours, these three firms are Cytosorbents, SeaStar, and Spectral Medical.

MM: Primarily based on what you simply mentioned, it is honest to say that nothing on the market would instantly compete with the Hemopurifier.

JF: There are not any publicly held firms that do it. We’re conscious of 1 privately held firm that is, once more, the product’s totally different than ours. It has a unique mechanism of motion however we all know of 1 personal firm which may be venturing into the oncology house. However we’re not conscious of a lot of a aggressive subject.

MM: Obtained it. Now that you simply’re ramping up your R&D actions with the pending launch of those scientific trials, are you able to speak a bit of bit about what your place is when it comes to your provide of the system, your provide of Hemopurifiers, your entry to Hemopurifiers, manufacturing of them and is that if that is one thing we ought to be taking a look at?

JF: We consider we’ve got enough stock for these trials. I ought to point out that the trials are designed to be between 9 and 18 sufferers in each international locations, partially as a result of they’ve totally different requirements of care in these international locations—totally different regimens durations of time between OPDIVO and Keytruda doses. The folks’s demographics and backgrounds may additionally be totally different. As we recruit sufferers and begin to deal with that, that is vital info, and we’ll make that recognized by way of press releases and/or AKs. Down the highway, we’ll begin getting knowledge units from every of those tranches of sufferers that Steve talked about.

JF: As soon as that evaluation is finished by the lab doing all of this work for us, we’ll make that public. Many individuals, together with us, are fairly concerned with that knowledge. We see a sequence of milestones over the following 12 months plus, and we did not focus on the market measurement. We all know everyone is aware of many individuals, sadly, with most cancers. I do know my sister died of it just a few years in the past. It is a big market. We have accomplished some analysis on it. If we could, Marla, can we contact on that?

MM: Please do.

JF: Steve, do you need to cowl that?

SL: Yeah. As I discussed, immunotherapy brokers and these checkpoint inhibitors have been recreation changers. One current piece of knowledge is that of all cancers, about 40% of persons are eligible for an immune checkpoint inhibitor. Let’s take one of many two brokers I discussed that might be within the scientific trial, Keytruda from Merck. Primarily based on their very own firm’s knowledge, they estimate that by 2024 this 12 months, 2 million sufferers might be on Keytruda. In case you use the data I gave you, solely 30 to 40% could have a long-lasting response, which suggests about 1.2 to 1.4 million sufferers do not need a long-lasting response. That is simply with that agent alone. That is a really giant inhabitants. Then you definitely, Nivolumab, have a smaller market share, OPDIVO, however once more, it’s nonetheless a really giant inhabitants with an analogous response charge.

JF: The variety of tumor varieties being permitted is near 30 now for Keytruda. These are very profitable medication despite the fact that they solely, ultimately, assist 30 to 40% of most cancers sufferers. We’ll have achieved our dream if we are able to enhance that by 30 to 40%.

MM: Primarily based on what you simply mentioned, Jim, about a number of totally different tumor varieties, your trial is designed to take a look at a spread of various tumor varieties. Is that appropriate?

SL: Yeah, I ought to have talked about that. It is known as a basket trial. We’re agnostic. We’re not taking a look at one particular tumor sort. We’re in search of not less than a. I consider we’ve got eight or 9 totally different tumor varieties with quite common tumors, together with non-small cell lung most cancers, which is among the commonest cancers that folks sadly undergo from. Melanoma, once more, is an enormous drawback. Mesotheliomas are included. Gastrointestinal tumors each on the higher GI tract in addition to the colon, in addition to urothelial cancers, bladder, and renal most cancers. It’s a basket trial. In a somewhat small trial, we’ll have the ability to glean what our organic sign is in varied tumors. We hope exosome removing ends in an analogous response whatever the tumor sort. We’re casting a large internet.

MM: To verify I understood one factor you simply mentioned, every affected person will mainly be his or her management group. Will you be monitoring the affected person’s exosome and EV stage versus pretreatment with the Hemopurifier?

SL: Yeah. The way in which it was designed is that this run-in interval. These persons are getting these medication as their commonplace of care, however they’re consenting once they are available to have blood attracts throughout their two months of anti-PD-1 remedy alone. We will see their extracellular vesicle, exosome ranges, and T-cells’ means to struggle tumors earlier than they fail. We’ll have a profile of the EVs and T-cells seem like earlier than the drug’s failure. Then does the Hemopurifier change that? They’re their very own management of the earlier than and after Hemopurifier.

MM: Proper. Thanks very a lot. This was very fascinating and informative, and if anybody’s concerned with following up, please attain out on to the corporate, OTC markets, or us at Zacks. Thanks, everybody, for collaborating. This ends our presentation. Thanks.

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