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AEMD 2012 Revenue Guidance In-Line With Our Model

Zacks Equity Research

AEMD 2012 Revenue Guidance In-Line With Our Model

Brian Marckx, CFA
Fiscal 2012 Revenue Guidance
On May 3rd Aethlon Medical (AEMD) announced revenue guidance for fiscal year 2012 ending March 31, 2012.  Revenue related to the DARPA contract is expected to be approximately $1.35 million (including the $958k booked in Q3), which is exactly what we had modeled.  There will also be a very small contribution from sale of their diagnostic products - in the Q3 10-Q Aethlon had noted that subsequent to 12/31/2011 (i.e. - during Q4), they had recorded the first commercial sale of one of their diagnostic products for $1.4k.

 Initial Virus Capture Data
As we noted in our blog on April 24th… In a press release on 4/24 Aethlon announced preliminary data related to the capture of HCV virus in the Hemopurifier cartridge.  As a reminder, in a July 2011 meeting with the FDA to discuss what the agency might be looking for in an eventual Investigational Device Exemption (IDE) application, the agency inquired about the ability of the Hemopurifier to measure the quantity of HCV virus captured.  Based on the FDA's comments, Aethlon decided to include this data point into the study protocol for the Extract-1 study - which, assuming positive results, will  be used as additional support for an eventual IDE application for approval for U.S. trials.

The 4/24 press release notes that data from three cartridges has been analyzed for amount of HCV virus captured after a single six-hour treatment.  Also noted was that two of the three cartridges were cracked prior to being evaluated.  The cartridge that remained fully intact showed virus capture of 3 billion copies of HVC.  The two cracked cartridges, in which the integrity of the virus capture data may have been compromised, showed capture of 145 million and 353 million copies of HCV.  

While its difficult to judge the clinical significance of this data, it does clearly show that the Hemopurifier is capturing the HCV virus.  

$500k in New Equity
As we noted in our blog on 4/9th…Aethlon continues to be successful in raising capital to fund operations and the development of their flagship device, the Hemopurifier.  In an 8-K filed on April 6th, Aethlon announced that they raised another $500k through the sale of common shares which included attached warrants.  The sale was made through a private placement to one investor and includes 6.25 million common shares (at $0.08) and 3.125 million warrants.  The warrants are exercisable at $0.125 over the next seven years.  

While Aethlon will need to continue to raise additional capital to fund development, the company's continued ability to attract financing is an obvious positive and demonstrates ongoing investor interest in the company and faith in the potential for the Hemopurifier.

To view a free copy of our most recent research report on AEMD or subscribe to our daily morning email alert, visit Brian Marckx's coverage page at http://scr.zacks.com/ .

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