Aethlon Medical, Inc. (AEMD) Q3 2016 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Aethlon Medical Fiscal 2016 Third Quarter Earnings Conference Call. All participants will be in a listen only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Mike Smargiassi. Please go ahead.

Thank you, Kate, and good afternoon, everyone. Hosting the call today are Aethlon’s Chairman and CEO, Jim Joyce, as well as the company’s CFO, Jim Frakes. Mr. Joyce will provide an overview of Aethlon strategy, clinical testing status and recent developments. Mr. Frakes will then make some brief remarks on Aethlon’s financials. We will then open up the call for the Q&A at the end. Before I hand the call over to Mr. Joyce, please note that the news release today and this call contain forward-looking statements within the meaning of the Federal Securities Act of 1933, and the Securities Exchange Act of 1934. Forward-looking statements involve risk and uncertainties that can cause actual results to differ materially from those anticipated or suggested by such forward-looking statements. Statements containing words such as, may, believe, anticipate, expect, intend, plan, project, estimate, or similar expressions constitute forward-looking statements. Factors that may contribute to such differences include without limitations risks related to the company's ability to develop and commercialize its products, the ability to fund and complete clinical testing of the company's products, the company's ability to raise working capital if and when needed, the company's ability to protect its intellectual property, the impact of changing government regulations on biomedical devices, the ability of the company to meet the milestones contemplated in its contract with DARPA and other risk factors. The foregoing list of risks and uncertainties is illustrative, but is not exhaustive. Additional risk factors can be found under the caption Risk Factors in the company's annual report on Form 10-K for the year ended March 31, 2015 and in the company's other filings with the Securities and Exchange Commission. For a more detailed discussion of the risk and uncertainties that could cause actual results to differ materially from any forward-looking statements, please see the company’s public filings, all available on Aethlon’s website. With that, I will now turn the call over to Jim.

Thank you, Mike, and good afternoon, everyone. Before I get started, I want to point out that our 10-Q will go and file this afternoon. And as a result, perspective supplements will be filed with the SEC to maintain the effectiveness of shares that were placed in previous financing. I bring this to your attention only to reinforce that these supplements are not related to the issuance of any new Aethlon Medical shares. I also apologize for my scratchy voice today. It’s an unfortunate gift that my young son seems to brought home from his school. Regardless in our last quarterly call, we set forth several corporate objectives. These included to complete the training of our new Principal Investigator at DaVita Med Center Dialysis in Houston to initiate new clinical collaborations, to advance chikungunya virus validation studies being conducted at the National Institute of Virology, to continued milestone achievements under our DARPA contract which is focused on the creation of an extracorporeal device to treat sepsis and related to our Exosome Sciences subsidiary we reference the advance of CTE clinical study manuscript towards actual publication. In regards to these objectives, we completed the training of our new Principal Investigator, Dr. Ronald Ralph and we additionally trained two sub-Principal Investigators as a means to accelerate patient accrual of our FDA approved clinical study. We also reported that the National Institute of Virology validated the ability of our Hemopurifier capture of chikungunya virus and we additionally received Institutional Ethics Committee approval for MAX Healthcare to conduct a clinical treatment study in individuals infected with Dengue virus, which should further reinforce the broad spectrum capabilities of our Hemopurifier against infectious viral pathogens based on human treatment experiences. And regards to our DARPA contract, we built and collected a $297,000 milestone and as a result, we have now achieved approximately $5.4 million in milestone achievement payment since the inception of the contract. And as it relates to our Exosome Sciences subsidiary, the manuscript that we submitted for publication with collaborators at Boston University and other institutes has been accepted for publication. The publication will report on the clinical results of our TauSome biomarker testing in the DETECT study which is the first clinical program of its kind to focus on the discovery of a biomarker that could detect and potentially monitor CTE in living individuals. At present CTE, it can only be detected through post mortem autopsy. Additionally, we have agreed to conduct continue TauSome testing in former NFL players who previously enrolled in the DETECT study and we have also agreed to provide TauSome testing as part of a newly awarded $16 million NIH grand that will row individuals with high risk of CTE add up to 17 different clinical sites. Based on shareholder feedback, I want to eliminate some confusion and clarify that we are not among the many companies focused on advancing a candidate concussion or traumatic brain injury test. Those are short term acute conditions whereas CTE is a distinct progressive and chronic neurological disorder that is common in individuals they have been exposed repetitive sub-concussive blows to the head. Again repetitive sub-concussive blows to the head, not traumatic brain injury, not specifically concussion. In this regard, we believe our TauSome biomarker is the most clinically advanced blood based candidate to potentially diagnose and monitor CTE in living individuals. Now before I hand the call off to Jim Frakes, I also want to clarify for new shareholders and other interested parties that while our FDA approved study in Houston is enrolling Hepatitis C patients. The actual treatment protocol was designed to meet the human safety challenge requirement to advance our Hemopurifiers a broad spectrum countermeasure against viruses that are classified as bioterror or pandemic threat. When we first requested FDA permission to conduct human studies through an investigation of the vise exemption, our protocol was driven by FDA’s request that we recruit dialysis patients as they represented a significant compromise health challenge and these patients already had blood access. Since it’s not possible to enroll subjects infected with the bioterror or pandemic threat in the United States, the FDA requested that we recruit dialysis patients who are infected with the viral pathogen as a model to demonstrate viral load reduction. Among dialysis patient, the only virus have significant prevalence is Hepatitis C. Thus the ration of why our Houston study mandates the inclusion of Houston C infected individuals. However, once we successfully complete our feasibility study, we will have opportunities to propose follow-on pivotal studies against viruses where it is feasible that conduct controlled human efficacy studies. Regardless the opportunity for our broad spectrum therapy that can cross the boundaries of different strength species and families of viruses is amended. Especially when considering the 100s of viruses knows to be infectious to man that of those 100s of viruses only a few are addressed with proven antiviral drug therapies. Beyond the issue of chronic virus drug resistance, a wide range of latent viruses that contributed to death and sepsis, organ transplant and other immune suppressed individuals remain untreatable with antiviral drug agents. As it relates to immerging pandemic threats, urban crowding, the proliferation of international travel and global warming are among several factors fueling the acceleration of new viral outbreaks around the globe. Beyond the all immerged [ph] Dengue and Chikungunya, Zika is the latest example of a virus that is quickly immerged to become a global health treat. And finally, the future use of drug resistant viruses as agents of bioterrorism is evitable. The industry looking bad bioterror and pandemic threats was launched when Project BioShield was signed into law in 2004. Unfortunately at that time, treatment countermeasures were solely defined as a drug or vaccine and the focal point of countermeasure development was directed towards the lining a decease specific antiviral agent for each and every threat which we didn’t think was a possibility. Additionally, if a countermeasure had potential therapeutic applications beyond bioterror and pandemic threats, it could be precluded as a candidate to be stockpiled by the U.S. government. Today, I am pleased to report that the definition of countermeasure is inclusive of medical devices. And the support of countermeasure development is now focused toward broad spectrum therapies. And additionally, if a countermeasure has potential commercial applications like our Hemopurifier, its advancement is now applause. In terms of demonstrating the broad spectrum utility of our Hemopurifier, I believe we have an unprecedented and unrivaled collection of supporting human and preclinical viral capture, capture viral validations. In the treatment of a comatose, Ebola Patient with multiple organ failure, we demonstrated a remarkable reduction in viral load as a result of a single 6.5 hour administration of Hemopurifier therapy. Patient made a full recovery and return home to his wife and children. In the treatment of an HIV AIDS patient, we demonstrated average viral load reductions of greater than 50% during single four hour administration of Hemopurifier therapy. And in the treatment of Hepatitis C patients, we demonstrated a successful use of Hemopurifier therapy as part of an interferon-based cure strategy. Undetectable viral load was reported as early as day seven after first therapy administration and follow-on allusion assays documented that the Hemopurifier was able to capture as many as 300 billion copies of Hepatitis C virus during the single six hour treatment. And regards to confirmatory in vitro studies, we’ve had a good fortune to collaborate with leading government and non-government research institutes to validate the broad spectrum capture of many high threat viruses. These include Chikungunya, Dengue virus, multiple strengths of Ebola virus as well as sheds glycoproteins, the H1N1 swine flu virus, the H5N1 bird flu virus, the reconstructed Spanish flu of 1918 virus and West Nile virus. In 2016, we expect to expand our collection of data against high treat viral pathogens. Regardless, as undruggable life threatening viruses continue to immerge, the need for our Novel broad spectrum therapeutic solution will increasingly become clear. Now before I hand off to Jim, I want to point out in our next quarterly call, we’ll discuss our progress in initiating development of affinity biofiltration devices to treat other life-threatening disease condition. And now I turn the call over to Jim Frakes for some remarks on our financials.

Thanks, Jim. Given our strategy and the stage of our development as a U.S. clinical progression story, we have not specifically focused on the generation of revenues at this time. However with that said, in the third quarter, we generated revenue of approximately $301,000 which was related to work performed under our government contracts with DARPA. And for the nine months ended December 31, 2015, we generated revenue of approximately $682,000. We have worked with DARPA since September 2011 and our agreement runs through September 2016. Our operating expenses in the quarter were approximately 1.39 million compared to 1.12 million in the year-ago quarter. This increase of approximately $270,000 was due to increases in professional fees of $306,000 and in payroll and related expenses of $44,000, which were partially offset by a decrease in general and administrative expenses of $84,000. Now for a more detailed review of the movements in our operating expenses and in our balance sheet, I would like to prefer you to the earnings release that we put out after the close today or to our 10-Q which we will file later on today. And finally as of December 31, 2015, we had $2.55 million of working capital and $3.3 million in cash. Our cash position reflects successful financing we completed in June. We continue to believe we have sufficient cash and expected revenues to fund our operations including current clinical trials through fiscal 2016 and into the start of the following fiscal year. In on a related point, we will conduct an Annual Meeting of Shareholders in late March to cover a number of matters including the need to increase our authorized shares. Now as Jim Joyce notes earlier, we had a number of questions from our shareholders about the perspective supplements that we file as a result of every material filing we do with the SEC. We filed two S-1 registration statements with the SEC to register the securities that we sold in our December 2014 and June 2015 equity offerings. These perspective supplement filings are not related to any current fund raising or insider sales. They are merely a coversheet on top of whatever material filing that we have made. We are required to update these registration statements whenever we have a material development or filing. So you will see perspective supplements go out later on this afternoon which are coversheets for today’s 10-Q filing. And now Jim Joyce and I will be happy to take any questions that you may have.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Brian Marckx of Zacks Investment Research. Please go ahead.

Hi guys. Thanks for all the detail in the prepared remarks and in the earnings release. I was hoping if you could tell me how much of the DARPA contract is still outstanding?

Jim, you want to address that?

See we have three milestones left Brian, about $600,000 in that rate, plus or minus a $100,000.

Okay. Jim Joyce, well you know I am a big Panther’s fan, so while maybe on the other side of the fence on this - on the upcoming game here on Sunday, I assume you are still routing free your ex-employer?

Yes, yes, it should be quite the interesting matchup.

Yeah, yeah, hopefully a good game. Relative to the TauSome assay, is that proprietary to Exosome Sciences or is there some ownership that in the biomarker or the technology that’s also owned by anybody at Boston University or the organizations that are involved in the study there?

No, there is several pattern submissions to support the discovery of our TauSome biomarker. Those submissions are owned by Exosome Sciences which is you know has been an interesting methodology for us to be able to create new strategies to leverage intellectual property we might have in place at Aethlon Medical either in the therapeutic or diagnostic space. And I think it’s, if you look at the progress we’ve made with Exosome Sciences, you might suspect that in the future it’s possible, we could pursue other types of endowers and similar types of vehicles. And the nice thing about these subsidiary vehicles if we can fund them without burdening the balance sheet of Aethlon Medical.

Okay, great. The manuscript that was submitted for publication related to the work BU on CTE, does it specifically talk about, does it a just the results in the performance of your TauSome assay, so can we kind of extrapolate from when the publication is published, when the manuscript is published, is there going to be more detail I guess in terms of the performance of the assay, so we can kind of flesh out, kind of exactly how it has performed, I guess lack is better word?

There will be extensive data presented and this is study where former high risk NFL players were recruited and in the control patients were former professional athletes who didn’t participate in sports that included head trauma. In terms of the data itself, it will be extensive, it will be in two primary categories; one, can monitor the presence of TauSome levels in former NFL players as compared to control and then the second area is to actually correlate TauSome levels with clinically - with clinical are cognitive decline. And patients enrolled in this study were given a battery of physical and mental test to be able to rate these patients for cognitive decline. So we will be looking and reporting directly at TauSome levels and the relationship to cognitive decline in memory and other test associated with in that area. So it will be a very extensive publication. To date, we have shared that TauSome levels that’s in the public domain based on presentations given by Dr. Robert Stern at Boston University who is reported that you know initial observations that are in the public domain are that TauSome levels in former NFL players are significantly higher than those in the controls and if there seems to be a significant coloration or cognitive decline with TauSome levels.

Jim, assuming TauSome is fully validated and there is - and opportunity to bring it to market, have you thought about kind of how the test might be used in clinical practice?

Well, I think a number of different organizations and agencies where their employees suffer from repetitive head trauma it’s going to very useful to understand baseline levels of TauSome and then to be able to monitor changes of those levels. Going forward in terms of actual commercialization, I believe as I mentioned this is by far the most clinically advanced diagnostic methodology to potentially identify and quantify changes or advances in CTE. Unfortunately we also recognize challenges that exist such that will need if this is the biomarker for disease conditions such as CTE, they will likely need to be a clinical consensus group that helps to determine what levels of TauSomes might be associated with early stage CTE might technically be defined as CTE or what levels might be labeled as advanced stage CTE. So we’re very fortunate to have some significant opportunities to continue advance our observations in the initial detect study through other studies. We have access to unique patient populations that other don’t really have access to. It’s very promising but there is still a lot of work to do.

Is there are a patient population outside of the patients that you are focused on that would be candidates for say a follow-on study and say earlier stage or later stage, you kind of define the different stages, to be able to kind of flush out exactly how that performs in across the spectrum of population I guess?

Yeah, so we are interested in testing to seeing if TauSomes might correlate with other neurological disorders, primarily this test been focused in individuals at high risk for CTE. One group that we’re talking to about follow-on testing is military personal, they are suffered from traumatic brain injury in looking at TauSome biomarkers as a potential indicator of cognitive decline.

Okay, alright, thanks.

The next question comes from Marc Robins of Catalyst Research. Please go ahead.

Hey, thank you. Jim, with the knowledge that we have to date regarding TauSomes and level of TauSomes and their potential uses indicator of CTE disability, is it possible the TauSomes like beta-amyloid and Alzheimer's, is it possible that TauSomes could be removed from the bloodstream and therefore potentially help the CTE patients that do better, I am not going to say recover but at least do better or do we know that as of yet, could it be used a treatment therapy, I guess is the way I could ask it simply.

Sure. What we do know is that strategies you brought up beta-amyloid which is more closely associated with Alzheimer’s disease. Obviously strategies to reduce circulating beta-amyloid have been deployed by drug companies based on a theory called the sink theory whereas there is a believe if you can reduce the partials and circulation if there is deep blocking in the brain. I don’t think we have a formal position one way or the other on that but I will say that it seems feasible that we could create affinity biofiltration systems to target those particles to perhaps target down as an adjunct with other immerging therapies in Alzheimer’s are potentially CTE. But I think most people would believe that there is potential therapeutic possibility if you can target the elimination of these particles of circulation. And not just circulation in the bloodstream, there are other areas of the body where we are investigating opportunities where the elimination of these targets might also be beneficial on a verity of different neurological conditions.

Okay, let’s move to - let’s move to DARPA, so the DARPA contract in sometime this year, I am sorry Jim Frakes, is that like October, September-October or is run the full year?

It’s attached to the government fiscal Marc, so September 30th.

Okay, September, okay, because there was a - I guess I remember it was a five year contract from September, so that be September through ‘16. If I remember correctly that means that there is supposed to be a product completed and I am going to say beta have ready to be delivered to the door of the FDA, Jim Joyce are we still kind of on that track?

Well I can’t make representations for DARPA. You know the goal of this study was to have and IDE ready to hand off to the FDA. You know DARPA with their disclosure in the near future address where they are with this product. And again this is not just Aethlon Medical, this is a product being developed through a team of different developers including some other colleagues in industry that have been focused on sepsis long term. I think the most exciting thing regarding the treatment of sepsis that’s come out of this that’s directly pungent to Aethlon Medical is the new knowledge that’s emerged over the last three or four years that sepsis and the primary cause of mortality in sepsis which was long thought to be a hyperinflammation in the immune system or otherwise known as a cytokine storm, it’s now knows that a majority people that die from sepsis actually die from an immune paralysis which would be exact opposite of hyperinflammation in the immune system. And during this immune suppressive phase which is the long drawn out phase in sepsis as patients become immune suppressed, there is an activation of latent viral pathogens. And these pathogens seem to be able to overwhelm the immune system and contribute the mortality in sepsis patients. And there are studies that have identified upwards of 50 different latent viral pathogens that have been activated in late stage sepsis patients most of those of these viral pathogens are not addressed with an antiviral drug agent. These include, the primary ones include cytomegalovirus, Epstein-barr virus, herpes simplex virus, JC virus, there is a long one list. So a very much long underappreciated aspect of sepsis you know has been the immune suppression, not the immune activation aspect of sepsis. So it could be a very significant opportunity in sepsis itself exist by being able to address the activation of latent viral pathogens which we would be able to do with the Hemopurifier where already advancing in clinical studies.

Okay and I want to come back to that but the area, the direction I was going with my question is, as DARPA has a defense entity and the original intense of this was to create a product that would help save a warrior’s lives after they’ve been injured. Now it’s known that the military does not have to have FDA approval, is it likely that we might see quicker activity directed by DARPA as they attend or use this device to advance the treatment of wounded warriors. And that’s circles at the FDA but they will go along in parallel with the whatever work you are doing with the FDA?

Yeah, no FDA is working lockstep with us in this program. We have FDA member of CDRH at FDA that regularly participate in meetings with us and help with potential protocol design. So this is something where FDA has been entrenched since the outset. But as it relates specifically as a Department of Defense contract with DARPA you know we’ve really are in a position ourselves to communicate on behalf of DARPA where they are with the product.

Okay. Because as I remember Rod Kenley kind of had some of the first designs of the device, is there opportunity to use the device in the simplified form and other treatment arenas? And essentially this is because you don’t have to use, you don’t have to use blood centers and it’s a simpler I am going to say more direct maybe not simpler but more specific and let’s call it elegant approach to treating the patient?

Right, well one of the proposals of the program was to advance a device that didn’t require anticoagulants which are necessary in extracorporeal treatments. Those types of candidate developments along with other therapeutic approaches were determined by the system integrator as to what would be included in a final product configuration that would move into large scale animal studies which results would lead to a potential IDE submission with CDRH at FDA. So we also have a contract as part of the system’s integrator team in addition to being on the core development team. So we have some inside as to how that’s - that final configuration is going but again it’s not something we can communicate.

With the design and the progress made on the DARPA project in sepsis, I think what’s fascinating is that is it, I think maybe and again I am trying to propose something rather than state something, it seems like the opportunity, you’re going after one specific problematic disease or problematic germ, okay, that’s a better word, and what has happened as you found out that there is a verity of other things you know vis-à-vis the adopt system, there are verity of things at the Hemopurifier one form or another can remove, is that got future for Aethlon as we go forward and develop some of these other capabilities of the device?

Well I think the original premise of our contract proposal to DARPA was the ability to interchange the affinity agents that we use in our lead product the Hemopurifier which we’ve mobilized an affinity agent called galanthus nivalis agglutinin which seems to have a significant affinity towards binding a unique signature that is resident in on glycoproteins coding virus and it appears to be resident on tumor secreted exosomes and it’s common theme is that this structure seems to be a mean for viruses and tumor secreted exosomes to abate surveillance of the immune system because immune system can’t tell the difference between self and non-self. Based on the years of advancing our Hemopurifier and understanding flow rates, separation membranes and a whole multitude of things including the assets of manufacturing devices that became very clear that we could interchange our lectin GNA affinity agent with other compounds that could have an affinity to target other disease enhancing particles, they could be underlying other life threatening condition. So this is something that’s significant interest to us and it’s not just something we proposed in the DARPA program. It’s an area of interest when we look a verity of other life threatening disease conditions where a primary disease promoting factor is in circulation. It’s something where we could develop an affinity agent, a mobilized affinity agent in our circuit and effectively target the elimination of that particle and it could be in a disease condition where the actual proliferation of targets or disease enhancing targets they might proliferate slower than what we see in the replication of RO pathogen. So it could be again something that we could reinforce potential utility in. But again I just would leave it as if you can think of other untreatable disease conditions that are life threatening where disease enhancing targets are in circulation, those are candidates for us to modify our Hemopurifier or you can call the adopt system and mobilized targets or mobilized affinity agents that can target those particles.

And I guess that’s the point I am trying to make and I think it would be - I think it would be helpful into the benefit of the other listeners that aren’t as familiar with the story is Mr. Marckx and myself but you know originally the device for DARPA was comment as the adopt system and I forgot what the clever acronym stands for. But what you’ve really done in the last several years is validate the fact that this device can be a convertible device, it’s a platform device, it isn’t just a single purpose device not that taking care of viral diseases as singularly minuscule by itself but the fact that there is all kinds of other opportunities in the medical field that can be used for. I guess I am going to go on to Dengue fever if you please, it’s interesting that can you say some more things about and details about the number of patients, the timeframe, what’s trying to be proven, are we just trying to capture the Dengue virus themselves or we trying to show improvement in the patients. Can you help with the better understanding of what that entails?

Yeah, the primary focus of the study will be to demonstrate the Hemopurifier can be safely administered the Dengue patients. Since we now have an allusion assay perfected, we can quantify the magnitude of virus captured in a cartridge and they are longer circulating in the patient. We are fortunate that today the ability to diagnose Dengue has improved significantly and historically we’ve had a couple of occasions where the Dengue has been proposed as a target for us to treating studies oversees, but we’ve always run into the issue of diagnostic capability to identify it early on and distinguish it from other disease conditions. Those diagnostic capabilities have improved which makes it easier to determine patients to include into a clinical study. Again it’s a safety study. We want to demonstrate viral capture. We want to demonstrate reduction viral load which is the goal standard in treating pathogens and we want to use this information to expand our collection of human treatment experiences against pandemic threats and other types of viral pathogens again to reinforce the broad spectrum capability of our Hemopurifier.

And I apologize gentlemen, it sounds like I am making you really suffer though is and I do apologize. Is there a number of - do we know the number of patients that are going to be treated?

It would be up to ten patients.

Up to ten, okay. You now are they going to have a single treatment session or is a multiple treatment sessions?

It would be multiple treatment sessions.

So it be very similar to the Indian trial for Hepatitis C?

Yeah the first study, we’ve done a series of different studies in Hepatitis C patients in India. The first study we ever ran with the Apollo hospitals which was -

And that was 2006 if I remember, correct?

That would have been around 2007 because it corresponded with the IDE we submitted to FDA where they requested that we treat dialysis patients infected with Hepatitis C is a model that demonstrate viral load reduction. Our first experience in performing that protocol was at the Apollo hospital oversees where we first start to demonstrating, a treatment experience demonstrates safety in dialysis patients with Hepatitis C and that lead to us to expand other types of Hepatitis C studies including the adjunct cure strategy within that.

Okay. Why don’t I get back into queue and let somebody else have a change but I have got a couple more.

Okay, Marc it was good to catch up in, don’t feel, you weren’t torturing me as my throat sounds worst.

Don’t worry, I’ll ask more questions if there is somebody else.

If it sounds worse than what it is.

Next we have a follow-up from Brian Marckx. Please go ahead.

Hi Brian.

Hey Jim and I don’t want to torture you either, I’ve never heard you sound this way, so I am guess that you are ready to get some rest. But just one on sepsis and just kind of an overall picture view, you guys have never really, really I guess thought from my perspective that you are going to pursue sepsis as an indication, but your comments on the call this call and the prior call, somewhat bag the question, whether that maybe down the road, are you thinking about potentially sepsis, I know you are very intimately knowledgably about the space and how are potentially difficult a sepsis indication could be and how expensive that potentially could be in the size of the trials and all that stuff. Do you see that possibly down the road that could be something that you pursue?

Yeah, I think - I think first off if you’re - you point out about sepsis not being a priority target for us. I think if you looked at history of extracorporeal strategies to address sepsis and even other types of drug therapies strategies to address sepsis you know it would seem like if you want to pick one disease condition where you can you know end up in the corporate graveyard, sepsis seems to be one of the best conditions to choose, a dimension challenging and there is all kinds of different factors for triggering sepsis. I think the interesting thing that we learned and that many people are learning is that there are two very distinct sides of sepsis. There is no doubt an important need to be able to respond very quickly the sepsis patients to be able to modulate are damping down this pro-inflammatory cytokine storm response. And this response is generally occurring in the first 24 to 48 hours. But after that response, there is a shift towards immune suppression and this is something that wasn’t clearly understood until large scale studies started to be conducted by researchers at University of Washington in St. Louis over the last three to five years. We’ve documented that a majority patients that die from sepsis, die from immune paralysis. And in all of those patients there is an activation of latent viral pathogens which are often times relief as a result of immune suppression. So the thought is that they can overwhelm the immune system when it’s been weaken then contribute significantly towards mortality. This is an underappreciated aspect of treating sepsis that most people haven’t thought of previously. But in terms of the ability to address latent viral pathogens, it’s not just a sepsis opportunity, it’s an opportunity that spans across immune suppression in general, one of the areas where this is best known to be problematic is in organ transplant patients that are receiving immune suppresses and able to in order to reduce their likelihood of projecting their new organ. One of the biggest challenges that as a result of those immune suppressions, the activation of latent viral pathogens which can be deadly whether it’s Epstein-barr, cytomegalovirus, JC virus, herpes simplex. And again these are all pathogens that aren’t effectively addressed with antiviral drug agents. So I think immune suppression in general and activation of latent viral pathogens, it’s just - it’s a broader opportunity in sepsis and it’s something that you know we are working to have a much better understanding of how we would potentially craft a pivotal study to demonstrate efficacy in those pathogens after we complete our feasibility study in Huston, it’s an area of significant interest.

Okay, great. That’s very helpful. Thanks a lot.

Alright, thank you, Brian.

That concludes our conference today. Thank you for attending. You may now disconnect.