Aethlon plansIDE, slims losses on Q1 report

Aethlon Medical (OTC:AEMD) yesterday said it plans to file for Investigative Device Exemption status for its HemoPurifier after the company’s contract with DARPA expires, and reports slimmed losses for the company and investors.

In a quarterly earnings call, CEO Jim Joyce said this would be the company’s last year on contract with DARPA, with a caveat of a possible extension to 2016, and the company hoped to pursue IDE clearance from the FDA once the contract is ended.

“I want to point out that the goal of the DARPA program is to complete the development of the device through a combination of multiple team players that is ready to be submitted through an IDE to FDA at the end of year 5. Along the way, different performers have achieved different milestones. Along the way in our case, we have collected human data which is very valuable,” Joyce said during the conference call.

The company is positioned to receive more funds from the Department of Defense contractor and a year extension of the contract, according to CFO Jim Frakes, who said the company expects “build and collect almost $200,000 related to a manufacturing milestone” the company had achieved.

“We have worked with DARPA since September 2011 and our agreement runs through September 2015, with DARPA holding an option to extend it to September 2016. We have an excellent relationship with DARPA over the past 4 years and are pleased with discussions for DARPA to pick up the option for the final year of the contract,” Frakes said in a conference call.

Aethlon reported losses of $1.2 million, or 18¢ per share, on meager sales of $193,000 for the 3 months ended June 30.

That amounts to a 67.2% reduction in losses on sales growth of over 200% compared to last year. Frakes said the company was not focused on revenue at this point, however.

“Given our strategy and the stage of our development as a U.S. clinical progression story, we are not focused on the generation of revenues at this time. However, with that said, in the 1st quarter we generated revenue of approximately $193,000, which was related to work performed under our government contracts with DARPA,” Frakes said during a conference call.

Losses per share were also slimmed down from last year, dropping 77.5% to 18¢. Stocks have stayed steady in light of the news, with no changes as of 9:30 a.m. EDT.

“In recent months, we executed a series a corporate milestones that improve the future outlook for our organization. We continued to strengthen our balance sheet through the completion of a $6 million equity financing and our shares began trading on Nasdaq, which broadens our access to the capital markets.  As a result of the financing, we have the capital resources to support the FDA-approved study we initiated to advance Hemopurifier therapy as a candidate to treat a broad-spectrum of viral pathogens.  Additionally, we are better positioned to pursue clinical opportunities that exist for our Hemopurifier in cancer care,” Joyce said.

The last few months have been busy for the blood purifying company, which listed on the Nasdaq in July after raising $6 million in a follow-on stock offering in June.

Aethlon grabbed headlines last fall when the Hemopurifier was used to treat a critically ill Ebola patient in Germany who later recovered.

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