AEMD: Cancer Gaining More Traction As Target for Hemopurifier

Zacks Small Cap Research

By Brian Marckx, CFA

OBB:AEMD

We have updated our report on Aethlon Medical (AEMD) for several recent developments.  See below for access to our full report on the company. 

DaVita Agreement for Pilot Study Finalized

Earlier this month AEMD announced that they entered into a definitive agreement with DaVita Clinical Research (DCR), the CRO arm of dialysis services giant DaVita Healthcare, to provide clinical management services for Aethlon's recently approved 10-patient feasibility study.  As a reminder, Aethlon first announced in February that they reached a preliminary agreement with DCR to manage the study - which was a change of course as AEMD had previously disclosed the study was expected to be conducted by the Renal Research Institute, a partnership between Fresenius Medical Care (FMS) and Beth Israel Medical Center in NYC.  The pivot towards DCR was driven by the potential to leverage DCR's dialysis-related clinical trial experience, their large clinical site network and the expertise of Dr. Stephen Fadem, who will be leading the study.  

The feasibility safety study, which will enroll 10 ESRD patients with HCV, will be conducted at the DaVita MedCenter Dialysis clinic in Houston, TX - one of the largest dialysis centers in the U.S. - which could presumably support future, larger HCV studies as well.  AEMD hopes to obtain IRB approval and commence enrollment by this summer.  We note that DaVita MedCenter is also in close proximity to MD Anderson Cancer Center - which potentially opens up the possibility to collaborate with DCR and Dr. Fadem on future cancer-related studies as well.       

Potential Application in Cancer Gaining More Traction

Aethlon has in the past alluded to the possibility of pursuing further development of Hemopurifier for indications other than just HCV - including potentially for treatment of certain cancers.  Cancer, which until recently was considered somewhat of a backburner application, has since evolved into an area that Aethlon expects to pursue more aggressively.  The company now hopes to file an IDE this year for treatment of cancer.  AEMD has not disclosed what or which cancer types it expects to initially pursue in clinical studies, although as we note below, Hemopurifier could potentially have utility in various cancers.     

A potential application in cancer received arguably additional support in an article titled, "Extracellular Vesicles: Emerging Target for Cancer Therapy" published in the April 2014 issue of the journal, Trends in Molecular Medicine. The article, written by researchers at Harvard Medical School, Massachusetts General Hospital and University of Oxford explores evidence that extracellular vesicles (i.e. - exosomes) play a key role in cancer development and progression and suppression of immune response.  As such, extracellular vesicles (EVs) have increasingly become targets for anticancer therapy.  This coincides with AEMD's cancer research and how Hemopurifier, via the removal of circulating cancer-secreted exosomes, could have utility in the treatment of cancer. 

The authors also believe that EVs may also increase the body's resistance to cancer drugs and hinder their effectiveness.  They further note that, while early evidence suggests that inhibition of EV biogenesis may have beneficial effects in the treatment of cancer, that a challenge has been to find therapies that can specifically target cancer related EVs without affecting normal cell function.  The researchers specifically reference Hemopurifier as a potential therapy to overcome these challenges, noting that with the use of Hemopurifier "it might be possible to specifically capture tumour cell-derived EVs on an antibody-coated matrix during extracorporeal dialysis.  For example, in human epidermal growth factor receptor-2 (HER-2) overexpressing breast cancer, where HER-2-expressing EVs have been shown to interfere with therapy and are associated with tumour aggressiveness, anti-HER-2 antibodies could be used to remove HER-2-expressing EVs from circulation with the aim of improving therapeutic outcome. In principal, this approach could be tailored for other tumour types, as long as the tumour cell-derived EVs are enriched for tumour-specific proteins. However, whether the level and duration of EV depletion after ADAPT (i.e. - Hemopurifier) therapy would be sufficient to achieve a clinically relevant outcome remains to be determined."

The authors note that their current understanding of EVs role in cancer development and progression is still in the relatively early stages and is based on data from in vitro experiments.  Their acknowledgement of Hemopurifier as potentially having utility in the treatment of cancer is also largely based on the supposition that removal of circulating EVs may be beneficial in interrupting the development and spread of tumors - which is still just a theory at this point.  Nonetheless, we think this research does add meaningful credibility to Hemopurifier's potential role in cancer suppression and adds additional support to AEMD's research which indicates the same.

Cancer-related studies could potentially be on the near-to-mid term calendar.  As noted, AEMD expects to file an IDE this year for cancer.  And the relationship with DaVita Clinical Research and Dr. Fadem could potentially expand beyond just HCV.  The DaVita MedCenter is in close proximity to MD Anderson Cancer Center which could provide convenient logistics for developing cancer-related studies with Hemopurifier. 

AEMD has presented data from preclinical studies at industry conferences that have shown Hemopurifier can capture exosomes of various cancers including breast, melanoma, ovarian and colorectal.  Specific to melanoma, a study led by Cornell University found that exosomes released by melanoma cancer cells facilitated the spread of the disease throughout the body and to other organs and bones. There was also a predictive relationship between exosome levels and severity of cancer with late-stage (IV) patients presenting with much greater exosomes levels compared to earlier stage patients. This indicates that removal of exosomes from circulation could reduce progression of the deleterious effects of melanoma to other parts of the body and potentially improve patient outcomes.

ESI Investigating Brain-Specific Biomarkers

In September 2013 AEMD announced the launch of Exosome Sciences (ESI), a subsidiary that the company had previously formed to pursue other exosome-related applications for their technology.  ESI was revived and charged with investigating exosomes' role in the progression of cancer and infectious and other diseases.

In March AEMD announced that ESI has been investigating certain brain-specific biomarkers and whether they can be identified in circulating exosomes.  ESI has isolated the brain-specific biomarkers tau, beta-amyloid, glycoprotein A2B5 and S100B in the circulatory system - previously only identified in cerebrospinal fluid.  These biomarkers have been shown to be associated with Alzheimer's Disease (beta-amyloid), Chronic Traumatic Encephalopathy (tau) and traumatic brain injury.  There is currently no cure for these disorders and identifying their presence is often not possibly until either well into their progression or, in the case of Chronic Traumatic Encephalopathy (CTE), until an autopsy is done.  CTE has received significant mainstream media attention of late as it been associated with head injuries of NFL players and been implicated as a cause for severe depression and some resultant suicides.

AEMD notes that ESI scientists have successfully isolated these brain-derived biomarkers in circulation - while no specifics were provided, we expect to hear more about this in the future.  This could provide another potential opportunity for the Hemopurifier in targeting removal of specific circulating exosomes.  

As we have noted in the past, while we do not model a contribution from the Exosome Sciences business, we do view this has possessing potential upside to AEMD's core business, particularly over the longer-term.  We will update our model to incorporate a contribution from Exosome Sciences depending on its progression and when there's more insight into likelihood and timing of revenue generation.  Targeting of brain-specific biomarkers is one more shot on goal for ESI.  

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