Before I get into where this investment may be headed, it is important to detail what has happened in the past weeks and months. Aethlon Medical has been around for some time but has really only come to prominence on the tide of the recent Ebola epidemic. Ironically, while AEMD’s Hemopurifier device provides a best-in-practice leg up to anyone fighting that dreaded virus, it also provides a leg up in fighting potentially dozens of other more commonplace diseases-those which affect tens of millions of patients the world over. When I first began writing about Aethlon it was trading at about twenty cents. That was before the results detailing what their Hemopurifier device removed from the blood of Dr. Mawanda (a Ugandan doctor who was treating Ebola patients in Sierra Leone and contracted the disease himself) were announced at the American Society of Nephrology’s annual meeting in Philadelphia last month. We know now that having entered University Hospital in Frankfurt Germany unconscious and with multiple organ failure in early October, Dr. Mawanda walked out of that hospital Ebola-free over one week ago.
The FDA has approved the Hemopurifier for “expanded access-emergency use,” which means that doctors in the United States who wish to utilize the Hemopurifier on any future Ebola patients don’t have to jump through regulatory hoops to do so. For those unfamiliar, this is a very big deal and a level of recognition/authorization that most companies offering experimental treatments for Ebola have not been given. In no small way this designation is a direct result of Aethlon being able to show both efficacy and safety not only in relation to the treatment of Dr. Mawanda but also through the human studies that it has performed in India on both Hepatitis C and HIV patients. The company has begun to attract the kind of attention it has gone without for more than a decade. It has received coverage in major publications, on network and cable television and perhaps most notably, the Hemopurifier was named one of Time Magazine’s top 25 best inventions for 2014. The release of the “final” Medanta Medicity HCV study results Tuesday were to some extent simply confirmation of what we already knew and while some may have expected a significant price move with those results, we submit that there are other announcements that the market is and should be looking for from AEMD to more clearly articulate its underlying value (we’ll get to what these are later in this article…promise).
We think it is important to mention that some of the recent $3.3M raised by the company is likely to go toward its Exosome Sciences subsidiary (a valuable aspect of Aethlon’s pipeline though this article focuses on the Hemopurifier) where they are doing groundbreaking work such as a liquid biopsy test to confirm conditions like Chronic Encephalopathy (brain condition often seen with repetitive concussions which has been much discussed of late especially with respect to Football). This funding was done through “one institutional healthcare focused investor” and we suspect that while that investor got a pretty good deal, they also have a solid understanding of where this company is going. For Aethlon’s part should their burn rate remain relatively consistent, reported at the See Thru Equity conference on November 12 by CEO Jim Joyce to be a very low $220,000 per month, this funding should put them in a secure position for the next twelve months especially considering that any orders for the Hemopurifier would likely be funded by a governmental or health agency here or abroad.
For those new to this investment or for those who may have done only cursory level research, it should be comforting to know that the Hemopurifier has been on the radar of some pretty important health and governmental agencies for some time. It is our hope and belief that as Aethlon continues to be able to provide safety and efficacy data for patients that it has (Dr. Mawanda) and will likely treat with the Hemopurifier during the course of this Ebola epidemic, combined with the human studies that it plans to launch in Houston and those completed in India, they will be fast-tracked for approval by the FDA and gain market clearance by early 2016 for broad spectrum use (more than one indication). It is clearly within the purview of the Agency to do this and on some level it may even be irresponsible not to as positive evidence continues to mount.
On October 17th, 2007, Dr. Laura Barrientos at the United States (US) Centers for Disease Control and Prevention (CDC), published a report entitled: “The Aethlon Hemopurifier, A Novel Strategy to Address ebola and Marburg Haemorrhagic Fevers.” The report discussed the potential of the Aethlon Hemopurifier as a treatment countermeasure against ebola and other filoviruses. An excerpt from the report follows:
“The Hemopurifier is an extracorporeal device which converges hollow-fiber filtration technology with immobilized affinity agents to allow for the rapid physical removal of virus and soluble viral glycoproteins from the blood. The device basically mimics the natural immune response for clearance of circulating virus and viral toxins. Initial collaborative efforts between the CDC and Aethlon Medical have demonstrated rapid clearance of viral particles from cell culture supernatants (t1/2 20-120 min). The Hemopurifier was also effective in removing soluble viral glycoproteins (t1/2 30 min). This knowledge represents the basis to further investigate in vivo the potential of the Hemopurifier as a fast-acting post-exposure intervention to delay disease progression and, possibly, to improve survival. The data resulting from the CDC-Aethlon collaboration has led to further studies through a collaborative research and development agreement with the United States Army Medical Research Institute for Infectious Diseases (USAMRIID).”
It was also announced Tuesday that 35 hospitals in the United States have been designated to care for Ebola patients. We do not think it would be a leap to hear that some or all will be equipped with AEMD’s Hemopurifier. An excerpt from the Washington Post article on the subject provides some justification for our thinking:
“The hospitals were chosen by state health officials and hospital executives and assessed by infection control teams from the Centers for Disease Control and Prevention to make sure they have adequate staff, equipment, training and resources “to provide the extensive treatment necessary to care for an Ebola patient,” according to a senior administration official.”
We note too that Congress is expected to approve a spending bill prior to the current one running out December 11 so it seems a distinct possibility that Aethlon may be more concerned with being able to manufacture needed units than with kicking off studies or basking in the light of its new found fame. The Obama Administration is hoping that its Ebola funding request is part of the upcoming funding equation and there seems little partisan bickering regarding the need for it. At the very least we see the hospital preparedness and support funds as something of a no-brainer since they only involve application in the United States. Another excerpt from the Post story discusses this:
“The Obama administration’s $6.2 billion emergency funding request for Ebola, which includes $154 million for hospital preparedness and support, envisions at least one designated facility in every state, and additional ones in New York, the District, Chicago, Los Angeles and Puerto Rico. The White House wants Congress to approve the request by Dec. 11, when current government funding runs out.”
The FDA authorized study of HCV patients in the United States is due to kick off soon at a DaVita MedCenter in Houston and once they commence we will surely hear from the company. That study is due to wrap mid-next year with results likely out in July. You can follow the study and view its various endpoints here.
What many of us may be turning our heads to now (given hard to ignore efficacy and safety demonstration), and what the company has surely been thinking about for years, is commercialization of its Hemopurifier treatment. Only the company can enlighten us but we submit that this will begin to be known in the near future. While it seems conceivable that the Hemopurifier could receive marketing approval as soon as early 2016 we think that they may now begin selling their product to hard hit areas in West Africa still ensconced in the Ebola battle as well as to governments (here and elsewhere) around the world who want to stockpile it as part of their own preparedness efforts. While this would be the beginning of revenue traction for the company (in addition to significant and continuing publicity) a far bigger and vastly more dependable revenue stream exists in India as soon as the company is able to market its Hemopurifier treatment to any Hepatitis C patients (and their doctors) who want it. There are currently about 12 Million patients living with Hepatitis C in India. Healthcare coverage is expected to be close to 50% of the population by sometime next year according to estimates. If Hemopurifier treatment is used on just 2% of the population at prevailing rates (estimated to be about $7,400-this fee included hospital care at the Medicity in India as well) assumiong a discount of 25% for costs and fees, which we think is conservative, it would look something like the following:
12,000,000 X .02 = 240,000 patients
Published cost of one, 3-day treatment with 25% reduction = $5,550
Keep in mind that India contains about 1/14 of the world’s Hepititis C population (latest estimates are approximately 170 Million worldwide). Any signal that Aethlon has approval to market to all corners of the Indian State would be an enormous development. The process of approval in India requires completion of successful clinical trials and now that those are complete we are anxious to hear what the company’s next steps are. While this is but one example it should show investors the incredible potential of this company. We look forward to an update on their commercialization efforts and more information about product manufacturing in the coming year. As more news and information becomes available about Aethlon we will continue to offer our perspective.
Disclaimer: Please do your own due diligence or consult with a trusted financial advisor before investing in this or any other equity.