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spk03: Good day and welcome to the Athlon Medical Fiscal First Quarter 2025 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 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 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 Michael Miller of RX Communications. Please go ahead.
spk00: Thank you, Operator, and good afternoon, everyone. Welcome to Athlon Medical's Fiscal First Quarter 2025 Earnings Conference Call. My name is Michael Miller with RX Communications. At 4.15 p.m. Eastern Time today, Athlon Medical released financial results for its fiscal first quarter ended June 30, 2024. 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 the company's forward-looking statement disclaimer, Athlon's Interim Chief Executive Officer and Chief Financial Officer James Frakes, and Athlon's Chief Medical Officer, Dr. Stephen LaRosa, will provide an overview of Athlon's strategy and recent developments. Mr. Frakes will then make some brief remarks on Athlon's financials. We'll then open up the call for the Q&A session. Before I hand the call over to Mr. Frakes, please note that the news released today and this call contain forward-looking statements within the meaning of the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended. The company cautions you that any statement that is not a statement of a 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, 2024, the company's most recent quarterly report on Form 10-Q, and in the company's other filings with the Securities and Exchange Commission. Except as 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'll now turn the call over to Mr. James Frakes-Affons, Interim Chief Executive Officer and Chief Financial Officer.
spk04: Thank you, Mike. And I would like to thank all of you for dialing in. This is Jim Frakes, interim CEO and longtime CFO of Athlon Medical. Athlon Medical is continuing the research and clinical development of its hemopurifier, a therapeutic blood filtration system designed to bind and remove harmful exosomes and life-threatening viruses from blood and other biological fluids. These qualities of the hemopurifier have potential applications in oncology, where cancer-associated exosomes, which we also refer to as extracellular vesicles, may promote immune suppression and metastasis. Also in life-threatening infectious diseases and in organ transplantation. Now, before I turn the call over to Dr. Steven LaRosa, who will give you an update on our efforts to date on the oncology front, on the milestones we just hit, and on other potential milestones that we hope to achieve later on this year, I would like to take a moment to emphasize that we are starting to achieve the two goals that I stated were our objectives when I was appointed as interim CEO last November. Those goals were to get the company moving forward on our oncology indication and to reduce our expenses. As you will hear shortly, we have made measurable progress on both those fronts. I'm gratified by this progress and hope that if it continues, then our shareholders will be rewarded by that progress. With that, I will now turn the call over to Dr. Steven LaRosa, PATHLON's Chief Medical Officer.
spk01: Thank you, Jim. As announced on August 12th, 2024, two days ago, the Bellberry Human Research Ethics Committee, the BHREC, granted full ethics approval to the Pandora Private Hospital for a safety, feasibility, and dose-finding clinical trial of the hemopurifier in patients with solid tumors who have stable or progressive disease during anti-PD-1 monotherapy treatment, such as Merck's Keytruda, Fembralizumab, or Bristol-Myers Squibb's Opdivo, the volume F. The approval is valid for one year until August 6, 2025, after which time it will be eligible for renewal. The trial will be conducted by Dr. Marco Matos and his staff at the Findara Private Hospital, located in Queensland, Australia. Earlier, on June 18, 2024, The Human Research Ethics Committee of the Central Adelaide Local Health Network, the CALHN, granted full ethics approval for this same multicenter clinical trial. The approval is valid for three years until June 13, 2027. The trial will be conducted at this site by Professor Michael Brown and his staff at the Cancer Clinical Trials Unit, at C-A-L-H-N Royal Adelaide Hospital in Adelaide, Australia. Going forward, the next steps are to receive approval from the research governance offices at each hospital. The research governance office reviews indemnities and insurance. Once these approvals are obtained, Athlon, in concert with our Australian contract research organization, RESCU, will conduct site initiation visits, known as SIVs, after which patient enrollment in the trial may proceed. We expect that we will be open for enrollment in mid to late September 2024. We anticipate several upcoming potential value-creating milestones, including submission to the governance committee at an additional site in Australia that is under the jurisdiction of the Bellberry HREC, which has already reviewed the study for the Pandara site. The timeframe for activation of this third site should be in line with the activation of the other two sites. We also await the response from the scientific committee at a site in India, with the expectation that that will be followed by a human research ethics committee review. As a reminder, the primary endpoint of these studies is a 9 to 18 patient safety, feasibility, and dose-finding trial, and the primary endpoint 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 after a two-month run-in period of PD-1 antibody, anti-PD-1 antibody, either Keytruda or Opdiva. Patients who do not respond to the anti-PD-1 antibody therapy will be eligible to enter the hemopurifier period of the study, where sequential cohorts will receive either one, two, or three hemopurifier treatments during a one-week period. In addition to monitoring safety, the study is designed to examine the number of hemopurifier treatments needed to decrease the concentration of extracellular vesicles. And if these changes in extracellular vesicle concentrations improve the body's own natural ability to attack tumor cells. These exploratory central laboratory analyses are expected to inform the design of a subsequent efficacy and safety trial, including a premarket approval, known as a PMA study, required by the FDA and other regulatory agencies. Currently, only approximately 30 percent of patients who receive femoralizumab or nivolumab will have lasting clinical responses to these agents. Extracellular vesicles produced by tumors have been implicated in the spread of cancers as well as the resistance to these anti-PD-1 therapies. The Athlon hemopurifier has been designed to bind and remove these extracellular vesicles from the bloodstream, which may improve therapeutic response rates to the anti-PD-1 therapies. In preclinical studies, the hemopurifier has been shown to reduce the number of EVs in cancer patient plasma samples. The company also stands poised to address outbreaks and pandemics due to life-threatening envelope viruses for which no treatment exists. We have previously demonstrated the ability of a benchtop version of the hemopurifier to bind a number of envelope viruses of interest in in vitro experiments. These include dengue, not limited to, but include dengue and H5-1 avian influenza known as bird flu. Additionally, the company's COVID-19 trial in India remains open to enroll patients with severe COVID-19 infection who require admission to the intensive care unit. To date, one patient has been treated. The company is actively evaluating COVID-19 admissions at our site and potential enrollment against the ongoing cost of maintaining this trial. With that, I'll turn the call back over to Jim for the financial discussion and then open up for questions.
spk04: Thanks, Steve, and good afternoon again, everyone. I will try to keep my remarks on our financial discussion at a high level. You'll find detailed expense information in the financial statements attached to our earnings release that just hit the wire or in our soon to be filed quarterly report on form 10Q. As of June 30, 2024, Athlon Medical had a cash balance of approximately $9.1 million. Our consolidated operating expenses for the fiscal quarter ended June 30, 2024 were approximately $2.6 million compared to $3.4 million for the fiscal quarter ended June 2023. This decrease of approximately $800,000 or approximately 24% in the 2024 period was due to a decrease of approximately $600,000 in general and administrative expenses and a decrease of approximately $300,000 in professional fees, partially offset by an increase in payroll and related expenses of approximately $100,000. The approximate $600,000 decrease in G&A expenses in the fiscal quarter ended June 30, 2024, was primarily due to a $447,000 decrease in supplies related to the purchase of raw materials for manufacturing of the hemopurifier and for lab supplies. The approximate $300,000 decrease in professional fees was primarily due to a $136,000 decrease in consulting expenses, primarily related to termination of services with a contract manufacturing organization, a $110,000 decrease in scientific consulting, and a $78,000 decrease in legal fees relating to general corporate matters. The approximate $100,000 increase in payroll and related expenses was primarily due to an increase in separation expenses of approximately $300,000 related to the termination of an employee. That increase was partially offset by a decrease of $111,000 in stock-based compensation and an $89,000 decrease in general and administrative personnel expenses. As a result of the factors I just noted, Athlon's net loss decreased by approximately $700,000 to approximately $2.6 million in the fiscal quarter ended June 30, 2024, from approximately $3.3 million in the fiscal quarter ended June 30, 2023. I'd like to note and emphasize that if we exclude the $300,000 provision related to that employee termination, our operating expenses decreased by over $1 million, quarter over quarter. We included these earnings results and related commentary in a press release issued earlier this afternoon. That release included the balance sheet for June 30, 2024, and the statements of operations for the fiscal quarters ended June 30, 2024, and 2023. We will file our quarterly report on Form 10-Q following this call. Our next earnings call for the fiscal second quarter ending September 30, 2024, will coincide with the filing of our quarterly report on Form 10-Q in November, 2024. And now, Steve and I would be happy to take any questions that you may have. Operator, please open the call for questions.
spk03: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. The first question comes from Marla Marin with Zax. Please go ahead.
spk02: Thank you. So just, I wanted to, Jim, I want to get back to something you just said about the operating expense. If you normalize it, you know, to exclude the payment to the former employee. Is that a good run rate going forward? Understanding, of course, that as, you know, some of the clinical development efforts begin to ramp, we will see that reflected in higher R&D.
spk04: Hi, Marla. That's a good question. We have things moving in different directions. On the expense reduction side, and this is public information now if you look at our website and We changed law firms and accounting firms to firms that should be somewhat less expensive. So we didn't have that benefit in the June quarter. So there should be further expense reductions from those professional fees going forward. But as you noted, starting in September, the month, we expect much more activity in the Australian clinical trials. Steve and some colleagues are going to fly over there and do the site initiation to train the people. So there will be additional, and it will probably remain higher on the clinical trial front on the expenses. So they may offset. We can't predict exactly, but they should be somewhat offsetting.
spk02: Okay. So then follow up to Steve, you know, in terms of any kind of training that you have to provide, do you – Expect that to be a relatively, you know, short-term process. And, you know, how will you provide support once you've left and you've returned back to the states?
spk01: Yes. Great question. Thank you, Marla. So, as I mentioned, the research governance approvals are both that review process is underway. We've already got the site initiation visits at those two sites. scheduled in September, provided the governance goes okay. Once you're done with the site initiation visits, which me and my colleague at Athlon will participate in virtually, those sites can actually begin screening and enrolling patients. That's kind of the on switch. That will be followed by an investigator meeting in the October timeframe, which will actually travel to Australia and meet with all the personnel at the sites. But those sites will already be, the two sites will already be open for enrollment by then. At both the site initiation visit timeframe and the investigator meeting timeframe, there'll be lots of technical training on the actual device. And then we are also in the phase now of interviewing people for a technical position at Asplund who would provide real-time assistance to those sites so there'd actually be boots on the ground, if you will, to help the site. So, yeah, there'll be, as well as my colleague and I here, who will be available, of course, at all times for any patient that's enrolled.
spk02: Okay, thank you. And then last question is really more of a housekeeping question. I just want to, you know, make sure that I'm understanding what you said in your prepared remarks. As far as like the paperwork at your end, you've completed all of the paperwork from, you know, that you needed to submit. Is that correct?
spk01: For both the ethics committees, you know, we had paperwork that had to be submitted and responses, and so we're through that phase. And now we've provided our CRO rescue with all the paperwork that they need from our end for the governance review. Yes, we've done everything we could do. We're waiting for the governance offices at those two sites to rule.
spk02: Okay, great. Thank you.
spk04: And again, Marla, those are just kind of straightforward business issues. We're showing them our insurance policies. We've signed indemnities. I think they've even countersigned some of them or we're tracking down a PI. Agreed upon budget. Budgets are agreed upon. So it's a straightforward business thing to nail down.
spk02: Got it. Okay.
spk03: Thank you. Again, if you have a question, please press star then one. This concludes our question and answer session. I would like to turn the conference back over to Jim Frakes for any closing remarks.
spk04: Jim Frakes Thank you, operator, and thank you again, everybody, for joining us today to discuss our first fiscal quarter results. We're pleased that we're making progress, and we look forward to keeping you up to date on future calls. Goodbye.
spk03: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect
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