Aethlon Medical, Inc. Q3 FY2026 earnings call

Key developments include continued enrollment and treatment progress in the Australian oncology trial; ongoing expansion of the extracellular vesicle (EV) research platform; advancement of work evaluating Hemopurifier compatibility with a simplified blood treatment system; and sustained operating expense reductions. In the Australian oncology trial, the first cohort had successful completion with favorable directional improvements in EV and immune cell numbers. Cohort 2 has completed 2 Hemopurifier treatments in 2 participants, with a third patient to be treated by end of February. R&D efforts include compatibility study of Hemopurifier with SLAMB system, preclinical data on Long COVID, and exploration of platelet-derived EV removal in other indications. Financially, as of Dec 31, 2025, cash balance was ~$7 million. Q3 operating expenses were ~$2.06 million (up 13.6% y/y), while 9-month operating expenses decreased to $5.36 million (down 27% y/y) due to cost management initiatives.

Next earnings call for fiscal fourth quarter ending March 31, 2026 will coincide with the filing of the annual report on Form 10-K in June 2026.

Forward-looking statements are subject to significant risks and uncertainties, detailed in the company's annual report on Form 10-K for the fiscal year ended March 31, 2025, most recent quarterly report on Form 10-Q, and other filings with the Securities and Exchange Commission.

Q: So I just want to touch on some of the things that you mentioned in the prepared remarks. You've moved on in the trial to Cohort 2. And given that part of the trial's goal is to determine dosage or the number of Hemopurifier treatments and impact that they have on the trial participant, so now you will be administering the treatment twice instead of, with Cohort 1, the onetime treatment. But the participants are involved in the trial for the same length of time. Is that correct?

A: It's the same follow-up period. The difference, as you correctly stated, was, instead of getting 1 Hemopurifier treatment in Cohort 1 and Cohort 2, they get 2. So they get it typically on a Monday and Friday. So a number of days in between. And we'll be able to see the kinetics of how -- what the EV numbers do in between treatments. And then we'll also see if the 2 treatments lead to more long-lasting decreases in EVs and more long-lasting effects on T cells compared to what we saw in the first cohort.

Q: Did somebody -- okay. Then my next question is, if it turns out that the -- investigating the potential to connect the Hemopurifier to, I think you called it the SLAMB system, can you give us some indication of like what that would mean in terms of potentially opening new doors or facilitating your ability to get the Hemopurifier into different medical centers potentially down the road?

A: Yes, sure. Yes. So right now, Marla, you have to put in a dialysis catheter, which is a fairly -- we call it kind of in medicine circles, we call it a garden hose. It's a large-bore catheter with 2 lumens, one that you take blood out and then when you return the blood in. That's a pretty invasive device. The SLAMB system uses a much smaller single-lumen catheter that wouldn't have to be put in, in the neck. So in hospitals, there are these things called PICC lines that have pretty much become ubiquitous, that are these small, thin catheters that could be put in the crook of the arm. That's what I would envision. So that would be a big change in terms of the invasiveness of the catheter. Currently, for the Hemopurifier, we use a dialysis machine to run it. We're solely using really the blood pump mechanism of the machine. We're not using all the other bells and whistles that a dialysis machine has because we're not removing any fluids or electrolytes. So we're at the mercy of a dialysis machine securing a bed in a dialysis unit because that's the only place dialysis could be done in the hospital, and having a treating nephrologist because they're the ones who are skilled in using the dialysis machine. So with this SLAMB system, you'd have a single-lumen catheter with a simplified pump, which presumably would be much easier from an operator standpoint. So that opens the ability to do this potentially in an oncology unit where people get their chemotherapy infusions or even in infusion centers, which most hospitals have in their ambulatory centers. So it really opens the door to doing this in oncology units as well as in, say, if it was a patient with autoimmune disease that gets an infusion of whatever immunosuppressive, those kind of units. So it really kind of removes you from the dialysis space. Potentially.

Q: So just to make sure I understand, it removes you from that dialysis space and makes it much simpler for the hospital staff to administer the treatment. But also from the patient's perspective, it makes it less invasive and probably less daunting to receive the treatment. Is that the right way to think about it?

A: Yes. Because as I say, these PICC lines, they're typically put in what we call the antecubital fossa. That's the space in between your forearm and your upper arm, right, in front of your elbow. Getting a thin catheter there is a lot less daunting to a patient than getting a large catheter placed up in their neck. And they're also easier to take care of as well. They tend to have less complications. So yes, I think that from a patient perspective, I'd much rather have one of these catheters than a dialysis catheter. And I'd much rather be able to stay in my therapeutic home, meaning I'm going to an oncology unit to get my immunotherapy, I'd like to get my EV removal treatment in the same place and not have to go to a dialysis unit to have that done, which is what has to happen now. So it just makes it more integrated into care.

Q: Last question for me. Jim, I know that you are extremely cost conscious about just about everything that the company is doing, and trying to make sure you maximize your R&D spend and your operating costs, optimize the operating costs. So in the press release and in the prepared remarks, you did talk about building upon some of the preclinical research that you had done. Can you just talk a little bit about -- confirm that everything you're doing is consistent with that same very cost-effective approach you're taking generally, and how you're able to do some of what you're doing, like the Long COVID, in a cost-effective manner?

A: Right. Well, you're right, I can't escape my Scottish heritage, I guess, on the cost containment front. We're trying to keep costs down as much as we can, yet still advance. So we're trying to obtain samples just for shipping costs basically, to the extent we can. We're trying to do the work in-house with our in-house -- with our small scientific staff, trying to limit the work by outside labs. But yet still advance. So we're publishing articles. We are learning things. It's -- we have to make trade-offs, but we do feel like we're advancing it, Marla. While keeping the focus on the oncology trial. We're, again, delighted that we treated 2 out of the likely 3 patients in the second cohort after finishing the first cohort last quarter. So the progress is picking up on that front too.

Q: Now first question, related to the oncology trial. You said that the -- more around the time line. Again, this is your best estimate. You said the third patient should be treated by the end of February and then you'll present the safety data by late March. How long do you think the board will respond back whether you can move on to the third cohort or you have to now, let's say, add additional patients into the second cohort? What do you think the time frame for that would be?

A: Great question. So yes, I had misspoke this, so I'm glad you caught my correction. That third patient will be treated at the end of this month, February. And then the Data Safety Monitoring Board will occur likely in late March. Last -- I can only go historically. Last time, following the open session, at the day of the meeting, they had a closed session. And they returned a signed document to me within a couple of hours after. So I would anticipate a decision same day or next business day.

Q: And then let's say, just assuming they move you on to the third and final cohort, how -- and you said also on your prepared remarks that you had a pool of applicants, you saw an uptick of interest of potential participants. How quick do you think you could turn those around to do the 3 Hemopurifier treatments and then -- and get to finalize the last cohort data and then push that through?

A: Yes. So that's a great question. So this is what's really exciting. So thanks to our Controller, Michele Bombardiere. She got this Trialfacts and Dedicated, these groups that Aethlon contracted with. They have been able to supply the site referrals. And so we have a number of these folks lined up. Once we get the -- with the current protocol, you can't enroll or sign a consent for a new patient until you advance to that next cohort. But once we do, those patients can then be approached. They're in the queue, so to speak. They can be approached for consent. There's then a screening period where they get some additional lab test and review. And then we have to line up the HP treatment around their next Hemopurifier treatment. But the really exciting thing is, and again, we can't count our chickens, but there's a queue of potential participants waiting, which is really exciting for me.

Q: This is just a theoretical question related to how do you decide on the time gap between the first treatment? Like, you said earlier, a Monday, and then you did the second treatment on a Friday. Is there a specific reason why you chose the 5 days? Or is it -- and is there a possibility where maybe extending the gap between the treatments would be more beneficial to the patient? Is this like the optimal time? I'm just curious.

A: Well, extracellular vesicles are produced by tumors -- people with active tumors continuously. So the turnover is quite rapid. So going in -- again, this is a safety feasibility and our first time in oncology, we said we have to start with a single treatment and see how they do. But we knew it's unlikely that that's going to keep EV numbers down long term, right? So we said, let's try 2 in a week and let's also try 3 in a week, meaning Monday, Wednesday, Friday. We thought anything more than that a patient won't tolerate because, for instance, in dialysis, it's very hard for people to do more than 3 times a week. So we thought that that was the most that somebody would be able to get during a week. And then the other part of the story, which I think you're getting at, is when we look, we'll say, how often do you have to repeat that whatever treatment regimen is? Do you have to do that every week? Do you have to do that every 2 weeks? Do you have to do that once a month? And the way we have our sampling of labs, we'll be able to ascertain that. Is it once a week and then x number of time in between? Is it twice a week with x number of time in, or is it 3 times a week? This was done with a little bit of background information from the plasma exchange trial at Mayo, where they ultimately thought that you needed at least 2 to 3x in a given week to keep EV numbers down. So it was -- the design was informed by what was in the literature in the plasma exchange space.

Q: Related also to this potential incorporating it into the SLAMB system. Is that -- is there going to be any -- would there be any regulatory hurdles from your end? Or since that device is, I'm assuming, is already approved, if it just is compatible, if you could get the Hemopurifier compatible with it, it's ready to go? Or is there some type of you would have to do some sort of a safety test or something related to that before you could use it into that system?

A: Yes. Well, they're submitting their -- they're working on their submission to the FDA. It's not already approved. So they'll have to do that. And then we would have to roll it in. I'm sure we would be expected to do a certain number of treatments with the 2 in place. So it's not -- that's the plan.

Q: A couple of quick questions. With the Cohort 2, 2 out of 3 patients in, and if I understood it correctly, you are basically using the same patients who had -- who were in Cohort 1 into the Cohort 2? If that is true?

A: No. These are entirely new. These aren't the same patients that were in Cohort 1. These are entirely new patients.

Q: Okay. So they're entirely new. Okay. Fine. So what -- you said the third patient is starting at the end of this month. So do you think in a couple of months down the line, we should be done with this Cohort 2? And the real question is, is there a real need to do Cohort 3? Or do you think with Cohort 2, you would be able to judge if 2 treatments with Hemopurifier is enough to get the benefit that they could get? Or you still think you would need to do Cohort 3?

A: Okay. So a bunch of questions there. One is, yes, you're right, the third patient is going to get their 2 HP treatments at the end of this month. Following that, the independent Data Safety Monitoring Board will decide if that's sufficient or whether -- because it's a 3 plus 3 safety study, they'll decide whether it's sufficient or whether we need to add 3 additional patients. So I can't know, wouldn't be appropriate for me to speak for them. But in the best possible scenario, by the time they meet at the end of March, we would have a directive to go ahead and begin in April with Cohort 3. To get to your next question about the need for Cohort 3, well, again, this is based on the Mayo Clinic data, which suggested that you needed 2 or 3. I think we would be really hamstringing ourselves to stop at 2 and not investigate 3 because I have every reason to believe 3 could potentially be superior to 2 in terms of EV removal or T cells. So I think we would be selling ourselves short to stop at 2. And I haven't seen any of the data from 2 to actually even prognosticate yet. So it's way premature to call on the efficacy of 2 right now.

Q: So then I have a couple of questions on the SLAMB device, so -- integration. As you were stating, when you go from the dialysis machine to this machine, the tubing itself, the catheters itself are smaller in size, which makes the patient feel not so cumbersome. But on the other hand, the flow dynamics of the blood changes quite a bit between the larger tubing and the smaller tubing. So do you see that you might have to go through this rigmarole one more time with that machine because the flow dynamics have changed? The amount of capture of the EVs could be different because of the dynamics? What do you think?

A: Yes. Again, a lot of forward-looking questions there, but yes, so the first thing is -- the simple -- the first set of experiments is simply: is their pump compatible with the device, meaning does our device function without triggering alarms and clotting off, et cetera? They'll be using -- they'll be doing this, not on patients, but they'll be doing it in the lab with colored fluid and look at the pressures, et cetera. Then you're right, there probably would have to be some ex vivo experiments looking to see -- make sure the EV capture is similar, yes. So this is just the first step, is seeing the compatibility of the device -- of their pump with our device.

Q: Okay. So basically, that's not going to really help us move this trial any faster at this point. So it's something in the future basically, correct?

A: Not the current trial and probably not even the next trial. I don't think it'd be done in time.

Q: And then the last question from me is, at one point you were talking about India and then you kind of walked away from that idea. Do you still see a possibility of having the Indian hospital get back into doing a clinical trial so you can kind of speed up the progress here? Or is it first Australia and then we'll see what happens?

A: Yes. I think we're pretty highly focused on Australia, RK. We'd be -- while the PI is great there and the hospital is great, we're advancing at a very good pace right now in Australia. And we just want to finish executing and get this trial done and get the data out. I think there'll be some expense and some distraction. So the answer is no, we're not going to go back there.

A: It'd be hard to advance to a PMA trial if you had another safety feasibility trial going on somewhere else in the world.

A: Right. If there's an emergency, if there's a pandemic breaking out in India, we know them, the PI is very comfortable with our device, we certainly could do an emergency use situation there. I wouldn't hesitate to consider that. But in terms of going back and doing a safety trial, no.