By M. Marin
NASDAQ:AEMD
READ THE FULL AEMD RESEARCH REPORT
Patient enrollments begin for AEMD’s basket oncology trial Â
Aethlon Medical (NASDAQ:AEMD) announced FY 2Q results and provided a business update yesterday. The company has made significant strides in moving its clinical activities forward over the past few weeks. The company has enrolled the first two patients in its oncology trial (see below) at the Royal Adelaide Hospital in Australia. Another site that will participate in the study, Pindara Private Hospital in Australia, has also received ethics committee approval and training on the Aethlon Hemopurifier® and is now initiating patient enrollment. The company has also trained staff at a third hospital in Australia and expects this facility to receive formal ethics committee approval in the near-term and begin patient enrollments. Overall, we present our key takeaways in this note.
Key takeaways
- Lead asset the Aethlon Hemopurifier® is being evaluated in combination with checkpoint inhibitors as a potential treatment for patients suffering from various solid tumor types
- With three medical centers in Australia beginning or about to begin patient enrollments, the company has enrolled the first two patients in its basket oncology trial
- James Frakes been named CEO. We view this positively and believe his commitment to cost-cutting measures will enable AEMD to optimize funds available for clinical activities
- AEMD recently made some headcount reductions and other cost reductions and also stands to benefit from the up to 43.5% cash tax rebate on clinical trial-related R&D costs in Australia
- Conducting studies in both Australia and India will lower overall clinical spending and also enable the company to determine the Hemopurifier’s impact on diverse patient populations.
- The trial’s primary endpoint is safety and it will also assess feasibility and optimal treatment levels
- AEMD is optimistic that the trial will show the Hemopurifier’s ability in conjunction anti-PD1 agents to improve the body’s ability to fight cancer
- Longer-term, AEMD continues to view the Hemopurifier as a potential tool in the treatment of viruses, organ transplants and other medical areas
In addition, James Frakes, the company’s longtime Chief Financial Officer and recently its Interim Chief Executive Officer, has officially been named CEO. We view this positively, reflecting his experience with the company and understanding of the steps needed to move the Hemopurifier forward, as well as his knowledge of financial markets. He is committed to cost-cutting measures to streamline operations and allocate funds primarily to clinical activities. Reflecting this initiative, the company made certain headcount reductions and other cost-cutting measures. In addition, the up to 43.5% cash tax rebate on clinical trial-related R&D costs are expected to optimize spending, as well.
Specifically, AEMD expects to realize benefits from attractive economic incentives the Australian government provides for clinical development efforts and lower costs in India, where R&D expenses are substantially lower than in the U.S., according to management, and thereby maximize its R&D dollars. Australia offers an R&D tax incentives rebate program, which enables companies to receive a cash tax rebate of up to 43.5% on clinical trial related R&D costs and is expected to help it reduce costs, lower risk, and accelerate time to market. Aethlon had cash of about $6.9 million at the end of the September 2024 quarter to support its efforts and also has an ATM (at the market) mechanism in place. Moreover, Aethlon has a clean capital structure, with no debt and a single share class.
The company’s lead asset, the Aethlon Hemopurifier®, is being evaluated as a potential treatment for cancer and life threatening infectious diseases and for use in organ transplantation. The Hemopurifier is an extracorporeal device – in other words, it works outside the body. The device is used on existing blood circulatory equipment such as dialysis and CRRT machines that are already installed in hospitals and clinics, making the Hemopurifier essentially a plug & play tool for medical centers.
Oncology Basket Trial – Safety, Feasibility and Dose Finding
The company’s trial will analyze whether the Hemopurifier can help decrease the concentration of EVs in cancer patients and thereby improve overall patient outcomes, as noted. The company’s objective in designing the trial was to test the Hemopurifier in a patient population that is already receiving checkpoint inhibitor treatment but could obtain incremental benefit from the Hemopurifier. The company’s hypothesis is that using the Hemopurifier in conjunction with treatment of checkpoint inhibitors can increase the percent of patients who can benefit from combined treatment. The company expects the Hemopurifier, in conjunction with an inhibitor, can help improve overall patient outcomes and demonstrate proof of concept about the device’s benefits in treating solid tumors. The company is optimistic that the trial will show the Hemopurifier’s ability in conjunction with Optivo or Keytruda that block anti-PD1 to improve body’s cancer fighting ability.
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 concentrations improve the body’s own natural ability to attack tumor cells. Participating patients will be assigned to one of three different cohorts: cohort 1 will receive one Hemopurifier treatment during a one-week period, cohort 2 will receive two treatments and cohort 3 will receive three treatments during a one-week period. Analysis of the data generated from this study will be used to inform the design of a subsequent efficacy and safety, Premarket Approval (PMA), study to move toward regulatory approval. Following completion of treatment, the company will continue to follow patient participants.
Primary endpoint safety; trial will also assess feasibility, dose-finding
The primary endpoint of the roughly 9-to-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 stable or progressive disease at different treatment intervals following two months of PD-1 antibody, Keytruda® or Opdivo® monotherapy. Patients who do not respond to the PD-1 therapy will be eligible to participate in AEMD’s Hemopurifier study.
Several potential upcoming milestones
We would expect AEMD to announce that the first patient has been treated possibly by year-end 2024 or early 2025. Subsequently, we would expect AEMD to announce that it has received all the data from the first cohort of patients once the data has come through.
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