Aethlon Medical, Inc.

Good afternoon, and welcome to the Athlon Medical Second Quarter Fiscal 2020 Earnings and Corporate Update Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Jim Frakes, Chief Financial Officer. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Athlon Medical's second quarter 2020 earnings conference call. My name is Jim Frakes, and I'm Athlon's Chief Financial Officer. At 4.15 p.m. Eastern time today, Athlon Medical released financial results for its second quarter ended September 30, 2019. If you have not seen or received Athlon Medical's earnings release, please visit the investors page at www.athlonmedical.com. Following this introduction and the reading of our forward-looking statement, Athlon CEO, Dr. Tim Rodell, and our chairman, Dr. Chuck Fisher, will provide an overview of Athlon's strategy and recent developments. I will then make some brief remarks on Athlon's financials. We will then open up the call for the Q&A session. Before I hand the call over to Dr. Rodel, please note that the news released today and this call contain forward-looking statements within the meaning of the Federal Securities Act of 1933 and the Securities Exchange Act of 1934. The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement. These statements are based on expectations and assumptions as of the date of this conference call. Such forward-looking statements are subject to significant risks and uncertainties and actual results may differ materially from the result anticipated in the forward-looking statements. Factors that could cause results to differ materially from those anticipated in forward-looking statements can be found under the caption risk factors in the company's annual report on Form 10-K for the fiscal year ended March 31, 2019, and in the company's other filings with the Securities and Exchange Commission. Acceptance may be required by law. The company does not intend nor does it undertake any duty to update this information to reflect future events or circumstances. With that, I will now turn the call over to Dr. Tim Rodell, Athlon Medical's CEO. Tim?

Thank you, Jim, and thank you, everybody, for calling in late on a Friday afternoon. We thought that it would be better to have the call on Friday rather than on Halloween when some of you with school-age children would be trigger treating. and we appreciate your taking time to hear this update. At Athlon, we are continuing to develop our proprietary device, the HemoPurifier, which is a first-in-class therapeutic device that's designed for the single-use depletion of circulating viruses and cancer-promoting exosomes. The HemoPurifier was previously designated a breakthrough device by the FDA for the treatment of glycosylated viruses, including Ebola, other hemorrhagic fever viruses, and virtually all viruses that affect humans. And then in late 2018, the hemopurifier received a second breakthrough designation for the treatment of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy. And with cancer types in which exosomes have been shown to participate, in the development or the severity of the disease. So we actually had two separate breakthrough device designations that were granted by different divisions at the FDA recognizing the potential for the hemopurifier in the treatment of multiple different diseases. Now, we've actually had a very eventful quarter. We previously announced that were preparing for the initiation of clinical trials in patients with advanced and metastatic cancer. This work follows on a number of years of work in viral disease, representing over 400 hemopurifier treatments in patients with various viral infections, predominantly hepatitis C, establishing a very strong safety database for the hemopurifier. In June of this year, our team, including me, Dr. Chuck Fisher, who has joined us this afternoon and is with me, and Lisa Boswell, our newly recruited head of quality affairs and regulatory, met with FDA in person in Bethesda to discuss our development program for the hemopurifier in cancer. Following that meeting in September, we filed an investigational device exemption or IDE application with FDA to initiate clinical trials in cancer. That IDE was approved on October 4th, less than 30 days after filing. We have to submit a final informed consent document to FDA prior to initiating trials. and that informed consent will be approved by the Institutional Review Board at the medical center where we're going to conduct the trial. Now, I'd like to digress for just a minute and take a couple of minutes to comment on the review process in the context of our breakthrough device designation. I think that there has been somewhat of a view out there that The breakthrough designation is something that was generated by FDA to kind of convince people that they were moving quickly and provide a marketing ploy for companies. And our experience underlines the fact that this is anything but the case. In this situation, we filed our IDE in early September. and we received the first feedback from the agency three days later. During the subsequent 25 days, we received six additional rounds of comments and we filed seven amendments in 25 days. The IDE was then approved in less than the 30 days mandated after filing. Now in my over 30 years of experience in drug and biologics and device development, This is absolutely unprecedented. Prior to the breakthrough designation and the legislation that supports it, the standard process was that you would file an IND or an IDE and you would wait patiently for 29 days. And on day 29, FDA would call or email you and say either you can start your trial or you can't start your trial. So this type of interactive process Back and forth, collegial communication with the agency is exactly what was intended by the legislation that supports the breakthrough designation. And the best thing I can tell you is it works. We're now in the process of starting up a clinical trial, which the earliest trial in the device world is called an early feasibility study. in patients with advanced and or metastatic cancer of the head and neck. As you may know, head and neck cancer is a deadly disease, and patients who are not candidates for definitive surgery or radiation have very few options and very limited survival. Even patients who do have surgically or radiation amenable disease generally recur They can recur very quickly. They can get second primary cancer. So this is one of the solid tumors that we've made the least progress in in medicine. Recently, one of the newer immuno-oncology agents, also known as checkpoint inhibitors, called Pembrolizumab or Keytruda from Merck, was approved in the initial treatment of patients who present with disease that is not amenable to surgery or radiation. Keytruda represents a meaningful advance in the treatment of this disease. However, unfortunately, the majority of patients do not respond to this drug, and those who do respond add only months, unfortunately not years, to their life expectancy. Recent studies from collaborating laboratories that we work with and other laboratories have indicated that one of the primary mechanisms by which tumors are resistant to Keytruda and similar drugs is through the shedding by the tumor of immunosuppressive exosomes, the exact particles that are targeted for clearance by the hemopurifier. With this in mind, our initial trial in head and neck cancer will investigate the combination of Keytruda with a preceding treatment with the hemopurifier to decrease the number of circulating immunosuppressive exosomes. This trial will be conducted at a major cancer center in the United States, and we will have more to discuss about the details of the trial when it is launched. I should say before briefly asking Chuck to comment that we continue to pursue the development of the hemopurifier for viral infections, particularly life-threatening hemorrhagic fever viruses like Ebola. We will be opportunistic in treating patients with these diseases, also investigating other potential viral targets in the transplant area. to increase, improve the take of transplanted solid organs. So we by no means abandon the viral field. We continue to develop there, but we also view cancer as being a clearer and more rapid path to potential approval for the hemopurifier. So I'd like to stop for a minute because Chuck Fisher, Dr. Charles Fisher, our chairman, has been intimately involved with the development program. Chuck recruited me to the company last December in a management restructuring. Chuck and I have worked together for many years. We share a common philosophy about drug and device development and about how to run organizations. So our relationship is a collegial one, very different from the relationship generally between a chairman and and a CEO, and Chuck has been a meaningful part and a trusted advisor for me during this entire process. So, Chuck, do you want to make any comments on the regulatory and development process since you've been intimately involved in it?