Aethlon Medical (AEMD) Fiscal Q1 2027 Earnings Call: Oncology Trial Enters Final Cohort

Key Takeaways

• Aethlon Medical (NASDAQ: AEMD) reported fiscal Q1 2027 operating expenses of approximately $1.6 million, down 11.9% from $1.8 million in the prior-year quarter.
• Cash and cash equivalents totaled approximately $4.9 million as of June 30, 2026. After quarter-end, the company raised approximately $4 million in gross proceeds through a public stock offering.
• Management believes current cash resources are sufficient to fund operations for at least the next 12 months based on existing plans.
• The Australian oncology study has entered its third and final cohort. The first participant completed three four-hour Hemopurifier treatments and the eight-week follow-up without a device-related serious adverse event or dose-limiting toxicity.
• Two additional participants must be treated to complete the study, assuming no qualifying safety events. Management aims to finish treatment and follow-up by the end of calendar 2026 or early 2027.
• Preliminary cohort 2 observations showed reductions in total extracellular vesicles, including tumor-derived extracellular vesicles, and microRNAs linked to cancer progression. The company stressed that these findings are based on limited raw data and have not undergone formal statistical analysis.

Key Financial Data

The decline in operating expenses reflected lower professional fees, general and administrative expenses, and preclinical research costs. Management also said the operating loss decreased accordingly.

Business and Operating Performance

The Hemopurifier remains an investigational device. Aethlon Medical’s Australian oncology trial evaluates progressively more intensive treatment schedules across three cohorts.

Cohort 1 participants received one four-hour treatment, while cohort 2 participants received two four-hour treatments over one week. Management said its review of cohort 2 raw data indicated more consistent biomarker changes across participants and longer-lasting positive directional changes than in cohort 1, in some cases extending to the eight-week measurement point.

The third cohort uses three four-hour treatments over one week. At the time of the call, laboratory results were not yet available for its first participant. Formal statistical and dose-response analyses will be conducted after the trial is complete.

Aethlon Medical is also evaluating Hemopurifier applications beyond oncology. Research published on June 25, 2026, reported that small and large extracellular vesicles in plasma samples from patients with long COVID bound to the Hemopurifier’s proprietary affinity resin. Exposure to the resin was also associated with lower levels of microRNAs linked to immune dysregulation and inflammation.

The company plans to discuss a possible long COVID clinical development path with academic institutions and regulatory agencies. Its laboratory is separately studying extracellular vesicles implicated in lupus and heart disease among patients with chronic kidney disease.

Management Guidance

Management’s goal is to complete the Australian oncology trial’s remaining Hemopurifier treatments and eight-week follow-up by the end of calendar 2026 or early 2027. The subsequent steps would include data analysis, completion of the clinical study report, and pre-registration trial discussions with regulators.

If cohort 3 supports the biomarker patterns observed in cohort 2, management said a three-treatment-per-week schedule could be carried forward into a future efficacy study. That decision remains contingent on the completed data set.

Risks and Watchpoints

• Biomarker findings are preliminary, involve a limited number of participants, and should not be interpreted as evidence of safety, effectiveness, or clinical benefit.
• Cohort comparisons are currently based on raw observations rather than percentage changes from baseline or formal statistical testing.
• The trial still requires two additional participants, subject to the absence of device-related serious adverse events or dose-limiting toxicities.
• Management considers treatment schedules exceeding three four-hour sessions per week impractical because each session also requires setup and disconnection time, creating a near full-day commitment for patients.
• Advancing additional disease indications into clinical trials would likely require new capital, a partner, government grants, or another source of funding.
• The regulatory path for long COVID remains uncertain. The company’s existing breakthrough device designation covers life-threatening viruses, while management said long COVID is not currently included.

Analyst Q&A Highlights

Management clarified that cohort 1 showed biomarker changes in roughly two of three participants, generally lasting two to three weeks. In cohort 2, the raw signal appeared more consistent across participants, with some directional changes continuing through eight weeks. Cohort 3 will be important in determining whether treatment frequency is associated with greater magnitude or duration of biomarker changes.

The company does not currently plan to test four treatments per week. Management views three four-hour sessions on a Monday-Wednesday-Friday-style schedule as the practical upper limit for patient tolerability and logistics.

Regarding broader Hemopurifier applications, Aethlon Medical expects to continue low-cost internal research using its scientists, equipment, reagents, and externally sourced samples. Management said the resulting data and publications could create partnering options, although no transaction or regulatory expansion was promised.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good day, and welcome to the Aethlon Medical First Quarter Fiscal 2027 Earnings and Corporate Update Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Jim Frakes, CEO and CFO of Aethlon Medical. Please go ahead.

James Frakes

Thank you, operator, and good afternoon, everyone. Welcome to Aethlon Medical's First Fiscal Quarter ended June 30, 2026 Earnings Conference Call. My name is Jim Frakes, and I'm the Chief Executive Officer and Chief Financial Officer of Athlon Medical. At 4:15 p.m. Eastern Time today, Athlon Medical released financial results for its first fiscal quarter ended June 30, 2026.

If you have not seen or received Aethlon Medical's earnings release, please visit the Investors page at athlonmedical.com to view it. Following this introduction and the reading of the company's forward-looking statement disclaimer, Dr. Stephen LaRosa, our Chief Medical Officer; and I will provide an overview of Aethlon's strategy and recent developments. I will then make some brief remarks on Aethlon's financials. We will then open up the call for the Q&A session.

Before we start the business portion of the call, please note that the news release 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 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 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, 2026. 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. I'd like to begin by highlighting progress during the first fiscal quarter ended June 30, as we continue to execute against our strategy of advancing the Hemopurifier platform while maintaining disciplined cost control.

During the period, we achieved important clinical research and intellectual property milestones. We continue to advance our oncology program while also expanding our evaluation of chemo purifier applications into additional disease areas through preclinical research.

As Steve will discuss, we are now in the final cohort of our oncology trial. We continue to generate encouraging preliminary biomarker observations, and we are expanding our research into potential applications beyond oncology. Taken together, we believe these achievements demonstrate continued execution against our key priorities of clinical development, platform expansion, intellectual property growth and disciplined resource management.

And now I will turn the call over to Dr. LaRossa, who will cover updates on the Australian oncology trial and then on our R&D efforts. Steve?

Steven Larosa

Thank you, Jim. Before discussing our clinical observation, I want to emphasize that the Hemopurifier remains an investigational device. Any biomarker observations discussed today are preliminary and are based on the limited number of participants and should not be interpreted as evidence of safety or effectiveness or clinical benefit. The first participated in our third and final cohort of our Australian oncology trial has been enrolled and treated. .

This participant received 3 4-hour HemoCue treatments over the course of a 1-week period. The participant is now 2 months into the follow-up period and has not experienced any device-related serious adverse events or dose-limiting consistency. We need to only treat 2 additional participants to complete the trial, provided that none of the future participants develop any of these safety events. The 3 investigative sites remain engaged and are actively prescreening potential participants. Our goal remains to complete all HP treatments and the 8-week follow-up central lab measurement period by the end of this year 2020. The next steps would the analysis of the data.

Clinical study report completion and preregistration clinical trial discussion with regulatory parties Central lab measurements of extracellular vesicles microRNAs and lymphocyte subsets have been completed by the University of Sydney on the samples from cohort 2 of the clinical trial, where participants received 2 4-hour chemopurified treatments over the course of 1 week. A review of the raw data has taken place. As stated in the press release on July 13, 2026. We continue to see decreases in total extracellular vesicle comps including tumor-derived to cellular vesicles, and microRNA linked to cancer progression following the HB treatment.

Additionally, we observed increases in lipid success as well as positive directional changes and laboratory permit ratios that have been associated with responses to immunotherapy. The changes appear to be more consistent across participants and persisted for longer in cohort 2 compared with cohort 1, where participants received a single hemophurifiine treatment, independent formal statistical analysis, including a dose response analysis will be performed upon completion of the trial. Segue now to preclinical R&D activities. Our prior work in Long cove was published in the Preview Journal International Journal of Molecular Sciences on the 25 June 2026.

In this publication, we present data demonstrating that both small and large EV extractor vesicles in noncoded patient plasma samples bind to the proprietary G&A affinity resin within our Athlon Hemopurifier. Furthermore, following exposure of the patient plasma to the resin, a decrease in microRNAs associated with immune disregulation and inflammation was observed.

This data, coupled with the data from an outside group demonstrating the presence of the COVID spike protein and protein associated with inflammation and amoral clotting within the EVs of long cover patients, raises the possibility of EV removal as a potential parametal therapeutic strategy and Ronco. We plan discussions with academic institutions as well as regulatory agencies to see if there's a clinical development path forward or if additional preclinical work will be necessary. Finally, our lab continues to perform experiments exploring the ability of the Hemopurifier technology to bind to remove EVs implicated in other diseases, such as lupus and heart disease in those with chronic kidney disease.

With that, I'll turn the call back over to Jim for the financial discussion and the questions.

James Frakes

Thanks, Steve, and good afternoon, again, everyone. Let me turn briefly to our financial position and our focus on disciplined spending. At June 30, 2026, a we have approximately $4.9 million in cash and cash equivalents, providing resources to support ongoing clinical and research activities. Subsequent to quarter end, we further strengthened our balance sheet by raising approximately $4 million in gross proceeds through a public offering of common stock. Based on current plans, we believe our cash resources are sufficient to fund operations for at least the next 12 months.

Our consolidated operating expenses for the quarter decreased 11.9% and to approximately $1.6 million compared with $1.8 million in the prior year quarter. That decrease was driven by lower professional fees and reduced general and administrative and preclinical research costs and our operating loss declined accordingly. You will find additional detail on these expense changes in our 10-Q, which breaks down specific drivers by category. We included these earnings results and related commentary in our press release issued this afternoon. The release also included the balance sheet for June 30, 2026 and March 31, 2026.

The and the consolidated statements of operations for the fiscal quarters ended June 30, 2026 and 2025. 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, 2026, will coincide with the filing of our quarterly report on Form 10-Q in November 2026, and now we would be happy to answer any questions that you may have. Operator, please open the call for questions.

Operator

[Operator Instructions]

The first question today comes from Marla Marin with Zacks.

Question-and-Answer Session

Marla Marin

So I want to go back to something, Steve, that you said in your prepared remarks. I want to make sure that I understood. So the 3 different cohorts of the Australia study, increase dosage, increase treatment with the hemopuriapier. And I think what you said was currently, even though it's early in terms of a full data set, you're thinking that Phase II participants exhibit a longer benefit than those who participated in Phase 1. Is that the right way to think about what your comments were .

Steven Larosa

Right. So in cohort 1, the participants received only a single 4-hour HP treatment in Cohort 2, they received to 4-hour treatment. So cohort 1 would be like on Friday 4 hours, whereas Cohort 2 would be Monday and Friday for 4 hours. All cohorts within had samples done before and after the Hemopurifier treatments and then weekly in the follow-up period for 4 weeks, so week 1, 2, 3, and 4 and 8. And we looked at EVs, T cells as well as microRNAs over the course of all those time points. When you look at the raw data, and again, this is based purely on observations of the raw data, this is now looking at change from baseline, percent change from baseline or formal statistical out.

If you look purely at the raw data, typically in Cohort 1, we were seeing changes in 2 out of 3 participants where in Cohort 2, we tended to see it more consistent across participants. And then if you look at the positive directional change in those parameters, where in Cohort 1, you see those changes go out, say, 2, 3 weeks. We're seeing more times in Cohort 2 where we're seeing the positive directional change go out as far as the 8-week time period. So at least what I can say is it looks like the biologic signal is more consistent across 3 participants in Cohort 2.

And then it seems the positive directional change seems to last long. So it really cohort 3 will follow the tail if we continue to see that kind of increased magnitude and change as well as duration of change that will tell us that what we've seen to date is real, but encourage nonetheless, by at least the signal and the raw data that we're seeing.

Marla Marin

Got it. Got it. And you can't really comment yet on Cohort 3 because it's so early, correct?

Steven Larosa

Yes. We don't have any result. The first patient is like I said, just finish their 2-month or their 8-week follow-up period. So we don't have any data back yet on that patient in terms of the oral .

Marla Marin

But let's say that the trajectory continues along the same lines, as you just described in Cohort 3 participants show an even longer duration of improvement and more consistent across the participants. -- would there be a reason to think that you should -- when you -- if and when you go forward and design the next set of research parameters, would there make any sense to design a cohort that gets 4 treatments weekly? Or you think that the retreatment .

Steven Larosa

I think it's an excellent question. The thing you start running up against this tolerability and feasibility. So what we thought based on clinical medicine. And then we're drawing on the experience in hemodialysis mostly that anything more than 4 hours of treatment 3 times a week, say, a Monday, Wednesday, Friday, schedule this will not be tolerable to patients. That's about as much as the old tolerate. And so no, we're not considering going to 4 treatments that on .

Marla Marin

Okay. And that is not a function of the white Hemopurifier treatment is currently administered that could possibly change if you do move to a simplified treatment -- streamline treatment system. Is that correct? It's not -- it has nothing to do with the way you're treating people. It really is just having that treatment in and of itself probably cannot be tolerated more than 3 times a week. .

Steven Larosa

Yes, well tolerated both in terms of logistics and what patients themselves. I mean you talk about 4 hours, but there's also time in terms of hooking the patient up, timing the system taking them off. So it ends up being a complete day, it's not just 4 hours. So yes, anything more than 3 days. .

Again, and if we see in cohort 3, what we're seeing in Cohort 2 where we're seeing the directional changes we want, hopefully even greater magnitude with 3 treatments then we would take that 3 treatment in a week strategy forward for an efficacy trial. But they're kind of getting a little bit of ahead of ourselves, we have to see the data first. .

Marla Marin

Okay. One last question. So you mentioned also that there are many other conditions and diseases where EVs are indicated -- so you've been really good in the past. And Jim, I think that this is more of a question for you probably. You've been very good in the past at maintaining certain maintaining research on the Hemopurifier without incurring significant costs, not actual critical testing, but publishing papers speaking at medical conventions and other ways of trying to test the hypothesis that the Hemopurifier can be beneficial across the spectrum, of different indications.

Are there other opportunities do you think for doing more and broader work about the Hemopurifier in an extremely cost-effective way. .

James Frakes

Well, we can continue to do what we're doing, which is exactly as you described, Marla, using our in-house scientists, our in-house equipment, buying reagents and things, but that's not expensive. And trying to get samples either given to us or an extensively purchased. And we can continue to do that, continue to write articles -- but to really move forward, eventually, we would need to either bring in more capital to finance a clinical trial in 1 of these -- 1 or more of these diseases, to partner up with somebody, other government grants or 2 there are options out there and -- but I think we would need to support 1 of those ways to actually conduct a clinical trial in 1 of these things. So we will continue to do what we're doing. And try to find the right opportunities to move forward. .

Marla Marin

Okay. That's makes sense. But is it also fair to say that what you're doing, even though it's clear that you need to proceed to more structured clinical research -- is it fair to think that what you are doing gives you much more optionality in terms of finding a potential partner for certain or a variety of indications.

James Frakes

It's possible. We are talking to people. If another option is in future discussions with the FDA, if they chose to broaden or add to our breakthrough device designation in viruses.

Right now, it's just for life-threatening viruses, which long coba is not considered a life-threatening virus. But if they were to expand it to include that, then we could do potential emergency use the one-off treatments actually get some human data. But again, that's just a possibility. I'm not promising anything, but those options could happen.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Jim Frakes for any closing remarks.

James Frakes

Thank you. In closing, I'd like to recap some items to keep on your radar screens. First, we are now in the final cohort of our Australian oncology trial, with the goal of completing treatment and related follow-up by the end of calendar 2026 or early 2027. Second, the preliminary cohort 2 biomarker observations provide additional data for us to analyze as we complete the trial and move toward our next regulatory discussions. .

And third, as just discussed, we continue to explore the broader potential of the Hemopurifier platform, including in long COVID and in other diseases in which extracellular vesicles may play a role. We remain focused on advancing the Hemopurifier platform through disciplined clinical execution, rigorous analysis of our data and careful capital management. We appreciate your continued interest and support. Thank you for attending our call.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.