AEMD: Added Liquidity to Advance Hemopurifier

By M. Marin

NASDAQ:AEMD

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Aethlon Medical (NASDAQ:AEMD) has implemented measures to enhance its financial flexibility (see below) in order to advance its clinical studies and move the Hemopurifier towards potential regulatory approval and commercialization. The company has two clinical studies of the Hemopurifier underway. One study is of patients with head and neck cancer exploring the impact of clinical depletion of exosomes using the Aethlon Hemopurifier along with standard of care treatment, Keytruda.

Regarding the cancer study, the first patient was treated in December 2020, with no adverse safety consequences. The company is optimistic that enrollments will continue with little-to-no delay from COVID-19 cases. Following enrollment and treatment of all 10-12 participants, we would expect the company to release data from the study fairly shortly after the study is completed.

The revenue trajectory of Keytruda shows the potential that a successful cancer therapeutic treatment could have and that there are multiple cancers that could benefit from the Hemopurifier. For instance, Keytruda is indicated for the treatment of patients with a broad range of cancers, including melanoma, non-small cell lung cancer, head and neck squamous cell cancer and many other types of cancer. In 2020 alone, Keytruda global sales grew 30% compared to 2019 to $14.4 billion.

Hemopurifier Has Demonstrated Ability To Clear Other Coronavirus Diseases and Viruses

The other study is for the treatment of the SARS-CoV-2 virus (COVID-19) in humans using the Hemopurifier. COVID-19 could represent another opportunity and path to approval for the Hemopurifier, with the FDA having approved a supplement to AEMD's IDE for the Hemopurifier in viral disease to permit the testing of the device in patients with SARS-CoV-2/COVID-19 in another new feasibility study. AEMD also recently treated one COVID-19 patient under an emergency use single patient pathway (sometimes referred to as compassionate use) that allows for the use of an investigational product in patients who essentially have no other treatment options. Over a nine-day period, the patient successfully received eight Hemopurifier treatments of six hours each, confirming that the Hemopurifier can be used to treat COVID-19 patients.

Moreover, the company has already demonstrated that the Hemopurifier can be used to treat other viruses. A laboratory version of the Hemopurifier has also been shown to clear multiple other viruses in vitro, including a model version of the Middle Eastern Respiratory Syndrome (MERS) virus that is a coronavirus from the same family as the SARS-CoV-2 virus that causes COVID-19. The Hemopurifier has previously been tested in patients with hepatitis C virus (HCV) infection and in one patient with Ebola virus infection. Given the demonstrated ability of the technology to bind and clear other coronavirus diseases, such as the recent MERS strain, and shown effectiveness against all highly glycosylated viruses with which it has been validated, it is conceivable that the device could have utility against COVID-19, as well. Importantly, COVID-19 potentially represents a new opportunity to provide additional proof-of-concept and validate the Hemopurifier against another deadly disease, as well as a possible revenue opportunity for the company.

Enhanced Financial Flexibility

AEMD finished the 3Q of fiscal 2021 (which ended December 2020) with about $12.1 million in cash and no debt. AEMD also has been adept at leveraging National Cancer Institute (NCI) and government funding for research studies. The combination of cash on hand and government grands and awards are expected to help AEMD continue to advance and build inventory of the Hemopurifier for the two above-noted studies.

In 4Q FY2021, the company entered into an agreement to sell up to roughly $5.1 million of shares from time to time, depending on market conditions. The potential issuance(s) will enable AEMD to raise funds in order to move its clinical trials forward and advance the Hemopurifier towards potential regulatory approval and commercial launch.

Strong Management Team Leads Development Efforts

With several potential opportunities on the horizon, as illustrated in the company’s pipeline above, Aethlon recently has expanded its executive team in order to support the many opportunities the company has in front of it. Earlier this year, AEMD hired two key executives following the October 2020 appointment of Charles J. Fisher, Jr., M.D. as AEMD’s CEO.

Dr. Fisher’s extensive industry background has given him experience in financing, structuring corporate partnerships and deals, clinical development and regulatory strategy. Prior to joining AEMD, Dr. Fisher held various senior level positions, including as Head, Section of Critical Care Medicine at The Cleveland Clinic Foundation, among many others. Research conducted under his lead in sepsis, inflammation, host defense and endothelial dysfunction led to Eli Lilly & Co. recruiting him to lead the Xigris Global Product Team that registered the first drug approved for the treatment of sepsis. Other senior positions included VP for Global Pharmaceutical Development at Abbott Laboratories, where he was instrumental in the registration of Humira.

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