Conference Transcript - AEMD 2026-07-16

Ana, Interviewer

Welcome back, everyone. Next, we have Athlon Medical trades on the NASDAQ under the symbol AEMD. It's a medical therapeutic company focused on developing the Hemopurifier, a clinical stage immunotherapeutic device that is designed to combat cancer and life-threatening viral infections and for use in organ transplantation. Happy to welcome CEO and CFO Jim Franks. Welcome back, Jim. We're happy to have you. And let's just jump in. Let's start the big picture for investors who may be hearing about Athlon Medical for the first time. Talk about the company's mission and what unmet medical problem you are trying to solve.

Jim Frakes, CFO

Thanks Ana and it's good to be on your program again. Our mission is to improve outcomes for patients with life-threatening diseases by helping existing therapies work better. Today's cancer treatments have made tremendous progress but unfortunately many patients either don't respond or stop responding to those treatments. We believe part of the reason is that tumors release harmful particles into the bloodstream that interfere with the body's immune response. Our lead program is focused on those patients. If we can remove those harmful particles, we believe we may improve the effectiveness of therapies for those patients that are already receiving them. I would say the key takeaway is that we're developing technology designed to enhance existing treatments and not replace them.

Ana, Interviewer

Perfect. And so hemopurifier is unlike most biotech products because it's a therapeutic device rather than a drug. So explain in simple terms how it works and why it's important.

Jim Frakes, CFO

Right. Think of the hemopurifier as a specialized blood filtration system. I'm holding our product. It's a medical device called the hemopurifier. It connects to blood pumps, blood pumping machines like dialysis machines or CRRT machines that are in hospitals and clinics worldwide. Blood circulates through our device during treatment where it captures targeted disease-promoting particles before returning the blood to the patient. So the blood flows from the patient through our device. These particles are pushed out through the little pores in the 20,000 or so little fibers inside the device. The plasma exits little holes, pores in those fibers, then it's pushed back in less those captured particles and returned to the body. So that's the way it works. The circuit runs for about four hours typically. And because we're removing these harmful particles, instead of adding another drug, our approach has the potential to complement many different therapies and technologies across multiple diseases. I believe that's what makes our technology unique.

Ana, Interviewer

Perfect. And so you recently reported encouraging observations from your Australian oncology trial. So what stood out most to you from those results?

Jim Frakes, CFO

Yeah, I'm personally, I'm very excited. We are running a small nine-ish patient safety trial in Australia for cancer patients that are failing Keytruda or Optivo drug therapies. And I guess the biggest takeaway is that the biology is moving in the direction we hope to see we're observing reductions in extracellular vesicles or evs these are those particles i was talking about earlier and changes in immune system biomarkers that are consistent with our scientific hypothesis that we if we can remove if our device can remove those extracellular vesicles or evs that are emitted by cancerous tumors it held it should reduce metastasis within the patients where the cancer tumors jump to other parts of the body. We all have friends and relatives that have unfortunately had that happen. EVs are the bodies they help communicate basically within the the body. So our hypothesis is if we can remove those EVs we could help reduce that. It's still early and we certainly need to complete the study including statistical analysis before drawing conclusions but seeing those biological signals gives us increasing confidence that the device is doing what it was designed to do. For investors I believe that's exactly what you want to see in early stage clinical companies.

Ana, Interviewer

Absolutely and so assuming the Australian oncology trial continues to produce positive results, what are the next clinical and regulatory milestones?

Jim Frakes, CFO

Anna, our focus is very straightforward. First, we need to complete the current study. We've treated seven patients of the nine. If there are no device-related serious adverse events, it will only be nine. If there is such a situation, and again, we haven't had any, it could be as much as three more. But we're two to five patients away from completing the study. Secondly, analyze all of the data, including analyzing the statistics. And third, meet with regulators, the FDA in the U.S., the TGA in Australia, to discuss the design of the next clinical trial. Each study answers important scientific questions and reduces uncertainty. That's a key point I'd like to make here. That's how the development progresses and how value is created over time. So I think with every successful milestone, risk is reduced and moves the company closer to commercialization.

Ana, Interviewer

And so there are many companies developing new cancer therapies. So where does Athlon fit into today's oncology landscape and what makes yours different?

Jim Frakes, CFO

Right. There are many companies developing cancer therapies and they're almost all drugs. We're taking a completely different approach. Rather than targeting the cancer cells directly with a drug, we're working to improve the environment surrounding the cancer by removing those harmful circulating particles, the EVs, that may interfere with immune function. I believe that that means our technology could potentially be used alongside many existing therapies rather than competing against them.

Ana, Interviewer

And so beyond oncology, Athlon has generated encouraging data in long COVID through your collaboration with UCFF. So update investors on the status of that program.

Jim Frakes, CFO

Right. We've had a good relationship with University of California, San Francisco, their long COVID group, which is a preeminent group in that area. The long COVID work continues to produce valuable scientific insights i believe it's helped us to better understand how persistent viral viral proteins and inflammatory particles may contribute to symptoms in some patients and i must say as an aside every week i get i fortunately or unfortunately i get all the queries through our company's website and i i must get at least one query per week from long COVID patients that are just suffering. And there's no approved therapy. I mean, it's a huge market eventually. So while oncology remains our primary clinical focus, the long COVID research reinforces that this technology may have applications well beyond cancer.

Ana, Interviewer

Wonderful. And humo purifier, it was originally developed to remove viruses from the bloodstream. So how broad do you believe the platform opportunity is?

Jim Frakes, CFO

Well, that's true. It was originally developed to remove viruses. And I believe one of the exciting aspects of our technology is that it isn't tied to a single disease. Many serious illnesses involve these harmful particles circulating in the bloodstream. I mentioned EVs with oncology. With viruses, most harmful viruses have a glycosylization or sugary carbohydrate surface on the viruses. That is a very similar surface to the surface of EVs, so both of them bind within our device. So that's why the device works in both areas. So if our clinical work continues to validate the platform, we believe in future there could be opportunities in oncology infectious diseases and potentially other conditions where those particles play an important role so i'd like to think a key takeaway is we are building building a platform technology not just a single product company and many investors may not realize that hemo purifier was used during the 2014 ebola outbreak in critically ill patients so tell us a little bit about that experience sure um in the 2014 outbreak of the zaire strain a a physician became direly ill in africa treating ebola patients was medevac to germany to a hospital in frankfurt the nephrology all of his organs were shutting down including his kidneys. The nephrologist that was treating him knew of our product asked us if we'd send some over to treat the patient and they administered the hemo purifier in one six plus hour treatment and it did shortly thereafter the kidney started functioning other organs and it reduced his viral load sufficiently that he was able to go home. It was a great result one patient only it wasn't a clinical trial, but it did provide valuable experience and help validate the concept that harmful viruses could be removed from the bloodstream. We have shortly after that the patient was treated, the FDA did approve a protocol to treat Ebola patients. When there is a current outbreak of a different strain of Ebola in Africa right now, we have communicated with the FDA and they confirmed our Ebola protocol is still in place, but there have been no direly ill Ebola patients brought back to the U.S. So it's an example of where we could play a role if there are these outbreaks of life-threatening viruses.

Ana, Interviewer

And the company has previously discussed evaluating strategic alternatives to maximize shareholder value? Is that process still active? And how should investors think about strategic partnerships like licensing opportunities or other transactions as you continue to advance?

Jim Frakes, CFO

Right. Our board does regularly evaluate opportunities. I believe that's a normal progression for a small life science company to eventually partner up with a larger life science company we don't have a sales force i just don't think a likely scenario is we become a fully integrated life science company so we're looking and would like to enter into partnerships licensing opportunities strategic collaborations and other business opportunities um as yet uh the bigger players want to see the data from our study before having further conversations and we're not there we're getting close as i mentioned earlier but we're not there yet and the other situations we've run across uh we just haven't the board hasn't felt they gave enough credit for what we've developed so i think we believe our strongest negotiating position will come from generating good clinical data so our primary focus remains executing our development plan and we certainly will remain open to opportunities to benefit shareholders that's our that's our ultimate goal and so you recently completed a financing so discuss why you chose to raise capital now and how the proceeds strengthen the company and how investors should think about your cash runway and the needs going forward yeah I made that call we had close to a year's worth of cash it would have gotten us through wrapping up this clinical trial but not going into the next step of meeting with the regulators embarking on the second larger clinical trial necessary to obtain commercialization so um we did uh raise about four million in gross proceeds uh earlier this month uh that was after uh raising 1.8 1.9 million through atm sales in the june order so uh we're pretty well financed at the moment um uh we will remain disciplined in how we deploy the capital i've cut the burn rate in half since the board asked me to become ceo in addition to my long time here as the cfo and we're focused on hitting those milestones that will give us the greatest potential to increase shareholder value so it did have a short-term negative impact on our stock value but we are much better capitalized now can carry the company a long way should hit those milestones without needing to raise more capital anytime soon.

Ana, Interviewer

Wonderful. And you've described the Humo purifier as a platform technology. So what would you say to investors who wonder whether Athlon is an oncology company, an infectious disease company, or something broader?

Jim Frakes, CFO

Right, right. I use a very lay person's description of how Athlon kind of regarded itself that we we were like a bunch of firemen in a firehouse this is when we were solely focused on infectious diseases and we were waiting for a fire and for example that one Ebola patient in 2014 it showed it worked it could address those kind of life threatening viruses but I just felt you couldn't run a company being a bunch of firemen in a fire house cancers every day unfortunately people uh have to deal with that i mean my sister died from cancer i mean it's just awful and uh it's a huge market that those uh drugs i mentioned the the keytruda and optivo not that i'm suggesting that we'll do anything like this but something like 25 billion a year in sales. If we can help those drugs even improve by a few percent in terms of their ability to help their patients, that would be great for our shareholders and for society as well. So I have focused the company on oncology. It can be used in virology. So long-term, we do believe we're developing a platform that can address multiple diseases. But our strategy is simple. Prove the technology in oncology first, then expand thoughtfully into additional indications whether science supports it.

Ana, Interviewer

And so if we're sitting here a year from now, let's say, what do you hope investors will be saying about Athlon Medical? What milestones might have the potential to be the most meaningful drivers for shareholder value?

Jim Frakes, CFO

I suppose I'd like them to say that we did exactly what we promised, that we completed important clinical milestones. We generated strong, interesting, compelling data, advanced discussions with regulators, and continued executing with discipline financially and operationally. I believe in biotechnology, credibility comes from delivering results, not making promises. We've all seen too much of that. And that's how we intend to build long-term shareholder value.

Ana, Interviewer

And so many small cap biotech companies are competing for investors' attention. So if investors remember one thing from today's discussion, what would you want that to be?

Jim Frakes, CFO

I suppose investors, if they remember one thing, it's that Athlon isn't simply developing another cancer therapy. We're developing what we believe is a platform technology, again with our device, with the potential to address multiple serious diseases. Our lead focus today is oncology, where we're seeing encouraging biological observations that support our scientific hypotheses, but we also see potential applications in infectious diseases, long COVID, and other conditions where those circulating particles that I mentioned play an important role as I mentioned we've strengthened our balance sheet we have no debt unlike many small cap companies I've got the company away from that we have meaningful clinical milestone very meaningful to I believe clinical milestones ahead we're focused on disciplined execution I can just make one more comment please most Most importantly, we understand that success in biotechnology must be earned through data. Every study that we complete helps us to better understand the potential of the hemo purifier and we believe moves us closer to creating value for our patients and shareholders.

Ana, Interviewer

Thank you for doing it. You're good. Thank you, Jim.

Jim Frakes, CFO

Talk about what biological mechanism has been most compelling in your clinical or preclinical The removal, well, in oncology, the removal of EVs that are, there are many, many, many studies about EVs, how they rise and fall with cancer patients. We've seen that we tend to remove the ones that are relevant to cancers. Within those extracellular vesicles or EVs, there are micro RNAs and some of those micro RNAs also are very relevant to cancer and we've seen what the data so far seems like those are moving in the right direction as well so EVs micro RNAs and then finally T cells that's the most important thing how does the immune system react to our technology and some of the critical T cell markers also are moving in the right direction again small study, safety study, but so far so good in terms of the data.

Ana, Interviewer

And let's talk about the types of cancers. Which types of cancers do you believe offer the greatest opportunity for the hemo purifier?

Jim Frakes, CFO

To date, because our hypothesis is to try to help these mainstream drugs like Keytruda and OPTIVO, we focused on solid tumors that they're approved for. I do think blood cancers are interesting. I mean, our device filters blood, but we have not yet focused on that. It has been solid tumors that have been approved for Keytruda and OPTIVO. So head and neck cancer, lung cancer, skin cancers, solid tumors like that.

Ana, Interviewer

And could emerging viral threats create future opportunities for the hemo purifier?

Jim Frakes, CFO

Oh, absolutely. I would say that we'll never be a vaccine or a vaccine developer. And the technology has evolved with the micro mRNAs. You know, the vaccine development seems to be progressing faster and faster, which is a great thing for society. but as a first line of defense this could absolutely play a role and in i mean i hate to use this term but they do use it in medicine salvage situations like that poor doctor that contracted ebola in 2014. he was i mean all of his organs were shutting down it was dire we could definitely play a role for some of those people that we wouldn't be able to i mean i doubt would work for all of them but it could help some so first line of defense as a counter measure and then in those salvage situations where more mainstream vaccines or therapies haven't worked so yes the answer is yes and um which clinical endpoints will be most important in demonstrating efficacy well again it's a safety trial so safety is the most important thing but we're not following these patients out five years. It's not a long-term cancer study like that. We're looking at those same markers I discussed during this interview, EVs, microRNAs, and T cell markers, and also some blood, typical blood chemistry things. There's certain markers that are relevant to cancer. We analyze how those move. So we're looking at the kickoff point before the treatment starts, how their blood looks, a couple of hours into the treatment, after the treatment of four hours, week out, two weeks out, up to eight weeks out. So those are the snapshots in time that our lab at University of Sydney is analyzing from those patients.

Ana, Interviewer

Perfect. Well, what closing remarks do you have for our viewers today, Jim?

Jim Frakes, CFO

Well, for those of you that were not familiar with Athlon, I hope this was somewhat interesting and I'd encourage you to look at our website which is www.athlonmedical.com and I hope you keep us on your radar screen and for our existing long-term investors I'd like to thank them for their support and we are getting there with this trial we're seven-ninths of the way through everything considered and we've come a long way in the last two or three years since I've been CEO so I'm proud of that wonderful well thank you so much we appreciate you coming back on this conference and giving us this update with your important product and we hope to see you again real soon thank you

Ana, Interviewer

very much on it okay we'll talk soon and everyone will be right back