Aethlon Medical, Inc.

Good day and welcome to the Athlon Medical Third Quarter Fiscal 2020 Earnings and Corporate Update. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. 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 third quarter 2020 earnings conference call. My name is Jim Frakes, and I am Athlon's Chief Financial Officer. At 4.15 p.m. Eastern time today, Athlon Medical released financial results for its third quarter-ended earnings December 31, 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 results 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. Except this 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.

Thank you, Jim, and thank you all for dialing into I'd like first to briefly address the suspension of trading the company's shares by the Securities and Exchange Commission on Friday. We will then update on the progress of our programs in oncology and we'll then discuss our view of the evolving coronavirus outbreak and the potential relevance of the hemopurifier in this and future viral epidemics. As you know, on February 7th, the Securities and Exchange Commission issued an order of suspension of trading, temporarily suspending trading in Athlon Medical, Inc., stock for a period of 10 days. The SEC order stated that the suspension was due to concerns regarding the accuracy and adequacy of information in the marketplace that appeared to be disseminated by third-party promoters and recent and unusual market activity since at least January 22nd Athlon is aware that certain third-party promoters may have made claims about the potential efficacy of its products with respect to the coronavirus. The company neither solicited, had advanced knowledge of, nor played any role in the preparation of such reports. Now, I wanted to get that out of the way first so that we can concentrate on what we and our shareholders really care about, which is a discussion of our R&D programs. So let me move to that. We are continuing the advancement of the hemopurifier for advanced cancers under our recently approved IDE and breakthrough designation. As we previously disclosed, the initial clinical trial on cancer, known as an early feasibility study, which is the device equivalent of a phase one trial, will be a small single center for the open-label trial in 10 to 12 patients with advanced and or metastatic swing cell carcinoma of the head and neck or head and neck cancer who are receiving pembrolizumab, which is Mark's drug, also known as Keytruda, in the frontline setting for which it received FDA approval last year. The protocol for this trial is undergoing IRB and related review. We will be in a position to discuss additional details regarding the trial at that time. To our subsidiary, Exosome Sciences, we are also continuing our collaboration with the Hoag Hospital Group in Newport Beach, California, to characterize diagnostic and prognostic exosomal markers in patients with and at high risk for solid tumors. Additionally, we're also continuing our work under the recently awarded approximately $1.8 million National Cancer Institute contract to develop our benchtop version of the hemopurifier for the isolation and characterization of exosomes. These are our major activities in the oncology space. We continue to work on other potential applications and ways that we can investigate the hemopurifier. And now I'd like to move on and discuss our work in the development of the hemocurifier for viral infections, which is an area that remains a major focus of the company and has received a great deal of attention in the context of the current coronavirus outbreak. As you know, in addition to the oncology breakthrough designation, the company has also received a breakthrough designation for the hemocurifier for the treatment of life-threatening viruses that are not addressed with approved therapy. a designation that would generically appear to fit the current coronavirus outbreak, which is now designated as 2019-MCOV. That's a working name for this particular coronavirus. It will probably get a different name at some point in the near future. However, in order for the hemoperifier to be evaluated and deployed in this situation, a number of conditions would have to be met, as I will discuss in a minute. and this is the reason we haven't publicly commented before this morning. There is not adequate information out there yet for us to be able to say one way or another whether the hemopurifier is potentially a candidate for the treatment of this disease. But before I go into that, let me step back and provide a quick overview of the status of the current outbreak because a number of the characteristics of this virus that we understand now have a direct impact on the potential for the hemopurifier to intervene in this disease. Based on data from the World Health Organization from yesterday morning, there have been a total of 37,558 confirmed infections with this particular strain of the coronavirus. because, as you will see, the majority of these cases are mild disease, and the majority of them, in fact, are in China, where healthcare resources are very strained at this point. Many cases are not yet reported. Many patients who are probably infected can't even get in to see a healthcare practitioner. So the overall figure is probably substantially higher than the reported confirmed number of cases. As I've said, The majority of these cases are in China. So out of the 3,700, 558 confirmed cases globally, 37,251 of those cases are in China. Of those, 6,000 are defined as severe, which means a 17% rate of severity. And the case fatality rate is 2%. Now, given that the total number of cases is probably higher than what's reported, this case fatality rate may actually be lower than that, more on the order of 1%. Now, as of yesterday, the World Health Organization had reported 812 deaths in China and one death outside of China. based on data that are now becoming available today, the mortality rate is probably now closer to 1,000. Of note, as reported yesterday, even with this low case fatality rate, that is the percentage of patients who are infected who die, the total number of deaths in this outbreak has now surpassed the SARS outbreak. So the SARS outbreak affected a smaller number of patients. with a higher fatality rate, but because of the greater number of patients who are infected with this current coronavirus, the mortality rate, even though our percentage basis is lower, has now surpassed the SARS epidemic. Now, for perspective, I have to say that both of these outbreaks, the SARS outbreak and the current coronavirus outbreak, pale in significance. Next to influenza, which is a much larger problem that people tend to ignore, for which the CDC, the Centers for Disease Control, estimates that so far this season, in the United States alone, there have been 22 million cases, 210,000 hospitalizations, and 12,000 deaths. This is for a disease Now, to return to the coronavirus, the current coronavirus infection, the causative virus has been identified, it's been sequenced, and as I mentioned, has been designated 2019 NCOV. It's a member of one of the four coronavirus families, the so-called beta family. It also includes the SARS virus and the Middle Eastern Respiratory Syndrome, or MERS viruses. which are also in the coronavirus family. But as you can see from the above figures, this virus appears to be much more widespread than those outbreaks, but substantially less dangerous in terms of mortality. Now, as you may know, both Chuck and I have many years of experience in the area of viral disease and viral product development in a number of different academic and commercial settings, and I'm going to ask Chuck to comment briefly in a minute but before I do, let me say that we've been basically tuned into this since the very early days. We've been closely monitoring the situation. We've been speaking with our colleagues who may be involved in the care of these patients ultimately, and we've been evaluating whether the hemopurifier could offer any benefit to severely affected patients. Fortunately, as noted above, the majority of patients today have not had severe disease. In fact, The coronavirus is closely related to viruses that cause diseases that are generally referred to as the common cold. So the majority of patients are not severely infected. They're not severely affected. And those with mild disease would never be candidates for treatment with the hemopurifier because it is an extracorporeal device. It involves taking the blood out of the patient, filtering it through the hemopurifier, and then returning it to the patient. which obviously is an invasive treatment that would only be appropriate for use in life-threatening situations. Moreover, it were ultimately to be used in any outbreak such as the current one, it would almost certainly not be an initial frontline treatment. In addition, beyond appropriate severity of disease, two additional considerations would have to be satisfied for the hemopurifier to be considered for evaluation and deployment here. First, while the company has previously evaluated the ability of benchtop versions of the hemopurifier to bind multiple viruses, including one other member of the coronavirus family I mentioned previously, the MERS virus, the currently circulating 2019N coronavirus is not yet widely available for evaluation, and therefore the company does not have data showing whether the hemopurifier could clear it. It seems likely that it could, based on the data that we currently have, but unless we have direct data showing that the hemopurifier could bind it, that would be a necessary, although not sufficient, precedent for us to deploy it. Second, and potentially at least as important, it's unclear at this time whether a virus that primarily affects the upper respiratory tract, generating pneumonia, such as this one, would in fact be ameliorated by clearance from the circulating blood as the hemopurifier is designed to do. Remember, the hemopurifier is not directed at the lungs. It's directed at the bloodstream. And while this virus almost certainly circulates, it's totally unclear whether clearing it from the circulation would have an impact on the pneumonia that ultimately disables and potentially kills patients. Finally, as noted above, this outbreak is still largely in China, and I think is likely to remain there, and virtually all of the mortality is in China. So any use of the hemoperifier in appropriate patients would, based on what we know today, would be focused in China, and would additionally require the support of the Chinese regulatory authorities, not the FDA. With all of these considerations in mind, we intend to monitor the current situation and also the inevitable future outbreaks to come. I think we all understand now that this type of virus is not going to be an isolated case. We've already seen two other deadly coronaviruses, the SARS coronavirus and the MERS coronavirus. We're likely to see additional outbreaks of other coronaviruses and many other viruses as time passes. And we're going to deal with these in the same way. We will monitor them. We will look for opportunities to identify situations where the hemopurifier could be beneficial and intervene as appropriate. So let me stop there and ask Chuck Fisher, our chairman, and a close colleague of mine to add any comments he may have before we go on to the next part of the call.