Aethlon Medical, Inc. (AEMD) Q3 2018 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Aethlon Medical Earnings Conference Call for the Third Quarter Fiscal 2018 ended December 31, 2017. All participants will be in listen-only mode. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A replay of the call will be available approximately one hour after the end of the call through February 08, 2018. I would now like to turn the conference over to John Marco, Managing Director of Core IR, the Company's Investor Relations firm. Please go ahead, sir.

Thank you, Operator. Thank you for joining today's conference call to discuss Aethlon Medical's corporate developments and financial results for the third quarter fiscal 2018 ended December 31, 2017. With us today are Jim Joyce, the Company's CEO; and Jim Frakes, CFO. At 4:15 p.m. Eastern time, Aethlon Medical released financial results for the third quarter fiscal 2018 ended December 31, 2017. If you have not received Aethlon Medical's earnings release, please visit the investor's page at www.aethlonmedical.com. During the course of this conference call, the Company will be making forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933 and Section 21-E of the Securities Exchange Act of 1934 that involve risks and uncertainties. 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 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 year ended March 31, 2017 and in the company's other filings with the Securities and Exchange Commission. Except as may by 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 will now turn the call over to Jim Joyce, Aethlon Medical's CEO. Jim?

Thank you, John, and good afternoon everyone. We appreciate your participation today. As many may recall, when we conducted our first quarterly call in 2017 calendar year we were struggling to bring our Hemopurifier feasibility study to a conclusion. Since that point our team has been quite productive, in March we concluded our feasibility study and disclosed that we’ve successfully met our primary study objective which was to demonstrate safety in health compromised individuals infected with a viral pathogen. During the study we also observed significant virus capture by our device. Subsequent to the conclusion of our study, our Hemopurifier was awarded an expedited access pathway designation by the FDA, which has since been transitioned as the FDA’s breakthrough device program, which was recently established as a result of the 21st Century Cures Act being signed into law. We also received a contractor from the National Cancer Institute related to our endeavors to diagnose, monitor and treat cancer. We added two new directors with relevant experience in transitioning first in class, therapeutic candidates to market. We improved our balance sheet and significantly increased market liquidity, we expanded our intellectual property portfolio as a result of pattern issuances, across the fields of infectious disease and exosome biology. And we advanced our endeavors, at Exosome Sciences as our biomarker subsidiary. And we accomplished these milestone with a team of just six full time employees and as needed consultants, which allowed us to maintain a monthly burn of approximately $300,000. Since the beginning of last quarter, we improved our balance sheet as the result of a $6 million equity financing, which provided net proceeds of $5.4 million. And we recently added another $1.4 million in cash as a result of warrant exercises in ATM transactions. At present we maintained a cash position of approximately $6.5 million and in regards to market liquidity, we currently have an average daily volume of 655,000 shares based on a 50 day look back. This equates to a daily market transaction value of approximately $1 million, based on current share price. Subsequent to our last quarterly call, as mentioned we added two new directors Sabrina Martucci Johnson and Dr. Charles Fisher. Chuck was also appointed to be our Non-Executive Chairman. He played an instrumental role in the advancement of Enbrel and Humira to market and also led the registration of the first therapy to treat sepsis. Sabrina was previously involved in advancing the PROSORBA column on a clinical staged device to an FDA approved treatment for severe rheumatoid arthritis. That device was subsequently acquired by Fresenius. As it relates to our breakthrough device award designation and as suggested in our previous quarterly call, we deliver to FDA a formal pre-submission meeting requested as a meeting to determine the requirements to advance our Hemopurifier towards market based on the label indication allowed by FDA. In our submission we requested meeting dates in the first quarter of this year, while we are optimistic we will have limited guidance to provide until after our meeting with the agency. Under our breakthrough device designation the FDA allowed the following indication of use. The Hemopurifier was a single use device indicated for the treatment of life threatening highly glycosylated viruses that are not addressed with an approved treatment. The National Institute of Allergy and Infectious Diseases classifies 42 viruses, to be life threatening category A, B or C pathogen threats in the United States. Of these 40 are glycosylated and of those 40 only two are addressed with an approved post exposure therapy. Included among these are pandemic strains of influenza, which I’ll bring up based on enquiries related to H3N2 influenza virus that has led to the deadliest flu season in more than a decade. In this regard I will share that our research team has attained access to H3N2 virus and is preparing to conduct in vitro study to validate H3N2 capture by our Hemopurifier. In a related study we previously collaborated with Battelle Memorial Research Institute to confirm the capture of the H5N1 bird flu virus, the H1N1 swine flu virus and even the reconstructed Spanish Flu of 1918 which was responsible for 50 million to 100 million deaths a century ago. However I want to point out that influenza generally establishes itself in the respiratory system and does not survive well in the circulatory system. However when the virus mutate to survive in circulation it can become extremely virulent. We're currently monitoring for evidence of this occurring with H3N2, based on observations at healthy individuals in the prime of life coming through the infection. Beyond viral pathogens tumor-derived exosomes, represent another life threatening glycosylated disease target that is not addressed with an approved therapy. These particles can seed the spread of metastasis and contribute to immune suppression in cancer patients. Tumor-derived exosomes have also been reported to cause the functional arrest of T cells, which they may also inhibit the benefit of emerging immuno-oncology drugs and CAR-T therapies. As it relates to our recently awarded National Cancer Institute contract I am pleased to share that our research team has demonstrated the in vitro affinity of our Hemopurifier to capture tumor-specific exosomes underlying metastatic melanoma as part of our Phase 1 contract program. Our team then demonstrated the ability to release captured exosomes for analysis and quantification purposes. We expect to complete our Phase 1 contract later this summer and then plan the pursuit with Phase II contract award. Now before I hand the call over to our CFO Jim Frakes I want to provide an update on our Exosome Sciences subsidiary. With that subsidiary we have been investigating in exosomal biomarkers to diagnose and monitor tauopathies, which are a family of 21 neurological disorders that involve the abnormal plaqueing of tau protein in the brain. This includes Alzheimer's disease and Chronic Traumatic Encephalopathy otherwise known as CTE. In this regard, we were invited by Dr. Robert Stern at Boston University to investigate a exosomal tau biomarker, what we call TauSome in the DETECT Study which was the first CTE study funded by the NIH. In the study of 78 former NFL players and 16 controlled subjects we observed TauSome levels to be approximately nine times higher in the NFL group as compared to the controlled subjects. And when we looked at 33 Alzheimer's, we saw TauSome levels to be approximately 10 times higher as the same controlled group. Since our last quarterly call, collaboration with Dr. Tsuneya Ikezu at Boston University related to a proteomic analysis of exosomal protein cargos found in former NFL players as compared to non-contact sport controlled subjects. Another goal of this collaboration is to also confirm whether the TauSome biomarker we previously measured in the DETECT study is if it is indeed brain derived. They have also agreed to provide TauSome quantification to support the Boston University DIAGNOSE CTE study, which is actively enrolling subjects. And in regards to the study at the Translational Genomics Research Institute otherwise known as TGEN, our principal investigator has submitted a protocol modification to TGEN’s IRB to incorporate a new study enrollment questionnaire that is consistent with the questionnaire being utilized in the BU DIAGNOSE CTE study. In addition to quantifying the presence of TauSome biomarker in blood plasma like we did in the DETECT study, the new TGEN study will also explore for the presence of the biomarker in urine and saliva. And as compared to the previous DETECT study, the TGEN study will also seek to enroll younger NFL subjects, including those that may be on current NFL rosters. With that said, I will now turn the mic over to Jim Frakes to discuss our financial results for the quarter.

Thanks Jim and good afternoon everyone. At December 31, 2017, we had a cash balance of approximately $5.6 million. We currently have a cash balance of approximately $6.5 million. Over the month of January 2018, we raised approximately $1.4 million through a combination of cash from warrant exercises and sales under our At-The-Market financing agreement. During the December 2017 quarter, we recorded $74,813 in revenues under our contract with the National Cancer Institute. The overall revenue opportunity under that nine month contract was approximately $300,000 and as Jim Joyce noted if we successfully meet the milestones in that contract and we may have an opportunity to win related Phase 2 contract, which would be a two-year contract with $1.5 million revenue opportunity. We did not have any government contract revenue in the December 2016 quarter. Our consolidated operating expenses were approximately $1.24 million for both the quarters ended December 31, 2017 and 2016. As increases in payroll and related expenses of approximately $28,000 and in professional fees of approximately $22,000 were largely offset by a decrease in general and administrative expenses of approximately $47,000. As I just noted, our consolidated operating expenses were approximately $1.24 million for both the quarters ended December 31, 2017 and 2016. When we subtract out our noncash stock-based compensation expenses and noncash depreciation and amortization expenses for both of those periods, we calculated that we had a monthly operating cash burn rate of $302,000 in the December 2017 period and a monthly operating cash burn rate of $308,000 in the December 2016 period. We also had other expense of approximately $56,000 in the December 2017 quarter, compared to other income of approximately $22,000 in the prior year period. Our net loss was approximately $1,215,000 or $0.08 per share for the December 2017 quarter, compared to a net loss of approximately $1,206,000 or $0.15 per share for the December 2016 quarter. We put out these earnings and related commentary in the press release earlier this afternoon. That release included the balance sheet for December 31, 2017, and the statements of operations for the three and nine month periods ended December 31, 2017 and 2016. We will file our Form 10-Q quarterly report following this call. And now, Jim Joyce and I will be happy to take any questions that you may have. Steven, please open the call for questions.

At this time, we’ve allotted 30 minutes to address questions from participants. [Operator Instructions] And our first question comes from Brian Marckx with Zacks Investment Research. Please go ahead.

Hi, guys and congrats on the progress on the various programs that you have going on. Jim, you mentioned the upcoming meeting with FDA regarding the EAP, Hemopurifier program. It sounds like that should happen in Q1, is there – is that – you’re feeling is that likely to happen I guess in Q1, I’m sorry?

Brian, nice to hear it from you. And thanks for your participation today. The dates that have been suggested for meeting are in Q1 of this year. So we're optimistic that can happen but we don't have a confirmed date at this point.

Okay, all right. And then on the CTE program relative to the protocol modification, how does that affect – does that affect the DIAGNOSE study as well or is that that's separate from the DIAGNOSE study?

It’s completely separate from the DIAGNOSE CTE study that is being managed by Dr. Stern at Boston University. But we have confirmed with Dr. Stern, our principal investigator at TGEN. And it was decided that we should incorporate the same subject enrollment questionnaire that’s being utilized in the DIAGNOSE CTE study, which makes data collection little more consistent across the very few studies are being conducted in the field.

Okay, so has enrollment started with your study then at Translational Genomics?

No, we have not initiated enrollment at this point in time, we have established a team of former NFL players and advisors that are kind of building awareness of the study. We introduced salespeople at the time when enrollment does kick up but – if the expectation of Dr. Kendall Jensen, our Principal Investigator at TGEN witnesses a very simple modification, it should be cleared by the IRB within weeks.

Okay. And Jim, can you remind me how many other study sites are anticipated to enroll and then has IRB approval been submitted to any other study sites?

Brian, this is the full site at this point in time, we want to kind of work through the process of getting this study up and running. And then if we open up other sites, we anticipate that we would open other sites in regions where there's high concentrations of former players but once this is off the ground and we see how enrollment is going, will then decide whether we're going to add sites or where those sites will be but we would anticipate based on discussions, a site in New York area, one here in Southern California, in San Diego area and perhaps one in South Florida as well. But the goal of objective as we previously disclosed is to enroll up to 200 subjects and we believe at the TGEN site, we are going to get a very good outcome of former players.

Okay. Wondering if you could just talk about your thoughts relative to – kind of a high level question, relative to the new FDA Commissioner and I guess the Trump administration in general, it seems that they're focused on facilitating I guess, easier regulatory approval of certain diagnostics and therapies that target unmet needs and particularly deadly diseases and conditions. And how that may possibly facilitates either approval or access to Hemopurifier, whether it's through FMC program or potentially otherwise?

So my first comment would be, we're very impressed with Scott Gottlieb, he’s taking the appointment of the FDA Commissioner. I think many people were very surprised how quickly we would be able to transition this breakthrough device program from – we are signing the law in December 2016, I don't think many people at FDA believe the breakthrough device designation would be incorporated so quickly. But it's very clear that the commissioner is changing the culture at FDA and they’re very much focus towards providing patients access to therapies that seem safe and that could provide benefit against life-threatening disease conditions for which there is no therapy, which is consistent with our designation originally awarded into the Expedited Access Pathway program and then we transition to the breakthrough device designation. And I think some people might have even heard of the echoes of the goals of Dr. Scott Gottlieb, in the – addressed by [indiscernible] this week, who also discussed with not just drugs but access to devices, that are lifesaving for people suffering from illnesses for which there’s no approved therapy. So we are very optimistic and by the way, one of the things I want to point out is the device is that there are other reasons to be optimistic about this as well because if there is a expedited path towards market, perhaps for disease conditions that may not be tremendously prevalent here in the U.S. It's going to be very interesting for device manufacturers to see how other regions around the world treat market clearance, should they occur generally most regions around the world don't have the luxury of having a medical device regulatory agency. So they rely on approvals from FDA as a means to bring therapeutic devices into their countries. So this is not just an issue related to possibility here in the U.S., it potentially opens up opportunities on a global basis if we can execute the peripheral.

Jim, there was a notice that FDA – I believe FDA and DoD are working on a joint program, it was a couple of weeks ago I believe. There was a press release and it talked about that the program is focused at least initially on access to novel therapies that would address casualties or issues that – on the battlefield for war fighters. And it sounded that like it may be – it may focus initially on blood related products, but it implied that it may be also for other products, I guess. So anyway my question is, is that something that you think may be relevant to your meeting with FDA in the upcoming meeting here in Q1?

I’m not sure to what extent it's going to be relevant in that meeting, but we do understand that over the last year DoD has been referencing the possibility that for wounded war fighters that they maybe able to take action on their own without guiding from the FDA on new therapies. So I think what you're seeing in terms of the FDA-DoD collaboration this is – I think the intent is to kind of find a middle ground for those two organizations to collaborate to bring therapies forward but still maintain the regulatory oversight to a certain extent by FDA.

Thanks, Jim.

Thank you, Brian.

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

Hey, thank you and congratulations on all the milestones that you’ve been able to achieve this year. Following up on Brian's last question, we've chatted in the past about how trying to find a way into the hospital – into the hospital arena for treating sepsis would be not only difficult but very arduous and expensive. If the DoD were to take up the sepsis machine and technology, could that possibly be come back to help, propel private use – private hospital use of the machine or would they still have to go through the separate set of hoops.

Yes. So, Marc, I think I just want to make sure that I'm addressing your question properly. When you referenced this sepsis machine are you referring to the one program objective of DoD program related to the creation of a new instrument to deliver extracorporeal therapies including candidates to treat sepsis?

Yes.

Okay. Well, I think in general regardless of what the indication might be, there is going to be a need based on our vision of how to advance extracorporeal therapies for life-threatening condition, as well as the work of others in the field. It's becoming very clear there's going to be need for other delivery mechanisms beyond dialysis and CRT machines in hospitals and clinics already. That provides a platform. Kind of initiator business opportunities, but based on the underlying size of the market opportunities, certainly there’s going to be a need to expand the infrastructure to deliver these therapies. The one thing I can't do, Marc, is I can't speak to the progress of net instrument design from a clinical and regulatory standpoint. It's not my purview to do so. But I do believe – I do believe it’s been a very interesting instrument design in that program. And I'm also aware of others working on similar types of the design. So we believe there’s momentum in the field that we can leverage.

I think what I heard you say is perhaps we’re winding our way down the pathway as described by the Popular Mechanics magazine in 2007 where there could be almost Apple phone size, iPhone size, Hemopurifier and dialysis devices for the individual. But I won't go any further, both will have to look that magazine article up.

Marc, Marc, I appreciate your memory. And whoever that illustrator was took some very impressive artistic life to create that, plug in all the end size Hemopurifier who’s going to cure all diseases, right.

Hey, it has nothing to do with my memory, Jim. I have it in a gilded frame above my desk. Let's go on to cancer tumor exosomes. This is – I don't think there's really anything, I think it's more of a statement than it is – than a question, but I guess because it is – those exosomes are – I can't say glycosylated disease targets and there's no other way to really get to them. If your profile that's been accepted by the FDA, is accepted as it is stands, it would almost allow you to go after those targets once – am I right in this one? Once there’s a further proof that you can extract or subtract those exosomes out, tumor exosomes to help the patient? Or is that too much of a jump? Go ahead, please.

Well, I don’t think so, but I will reference. We’re both very proud of our work in the field, but we're also very frustrated because a lot of our work in cancer got delayed based on the delays of our clinical feasibility study with our Hemopurifier in our infectious disease program. So we’re very happy to get some of this work back off the ground. I want to point out that it is the same device, there’s no modification to the Hemopurifier. And when we first started looking at tumor derived exosomes a decade ago, the reason we looked at them was because they were carrying that structure, that allow the same structure that helps viruses evade the surveillance of immune system was being carried on these tumor derived exosomes. And we believe that perhaps that structure was an evolutionary mechanism of viruses and perhaps these particles to evade the surveillance of the immune system and transport disease promoting particles from one spot to another in the body. And you’ve been following us on to recognize that when we initiated that research medical community consensus once said tumor derived exosomes are nothing but cellular debris and they had no significant biological function. Today these particles have now suppressed the immune system, the quantity in circulation correlates with disease progression which don’t have cancer of tumor derived exosomes, is not going to be in your circulatory system if you have later stage cancer which can be in massive quantities. But I think the big important discovery was the fact that these are the diseases that contribute to the spread in metastasis in cancer patients which responsible for that 90% of cancer deaths. And then so if you look at where the market is going if there's any upside to the pace that we’ve been moving it’s been the evolution of immuno-oncology drugs and CAR T therapies into the marketplace. And then suddenly we're now seeing publications related to exosomes halting the function or arrest of T cells which could inhibit immuno-oncology drugs and perhaps especially be problematic for CAR T therapies which by the way are administered with the central venous catheter which allows – already provide access for our device should we be able to treat in that field. So it's an exciting arena. I think the premise of a device it can reduce the presence of these particles and combine with other therapies without adding additional drug toxicity is very promising. But we're happy that few have now understands the role of the particles in cancer and that we’re here to hopefully take advantage of the opportunities that are surfacing and I can’t help. I know you're a former – an active analyst but a former generalist, looks at things from multitude perspectives. In regards to CAR T therapies, I'm sure you saw the Celgene acquisition of 90% of Juno that they did own for $9 billion, and then last year we saw the acquisition of Kite by Gilead for $11.9 billion. So there’s some very big basket made in the field and we can navigate a way to help benefit some of these other therapies and that could be quite valuable.

Thank you very much. That's – I was going to ask you about some of the money that’s been tossed around and if there could be some that sloshes your way that will pass on, keep going. With the addition of Ms. Johnson and her very, very dear experience with MraY [ph] and PROSORBA column, help me remember, wasn't – and I forget the terminology, Jim, but wasn't the allowed price by PEG Medicare for the PROSORBA column $2,700? And if that's the case wouldn't that also reflect kind of a starting point for the Hemopurifier for evaluation or pricing standpoint?

Yes, the PROSORBA column was in terms of reimbursement it advanced under a reimbursement code for Hemoperfusion devices, which the PROSORBA column was defined under. And based on our mechanism we would expect to be defined under a Hemoperfusion device as well. The reimbursement fluctuated for the PROSORBA between – somewhere between $1,800 to $2,400, I don’t recall specifically. But there was – as compared to dialysis a pretty reasonable reimbursement I think dialysis the reimbursement per treatment is now down around $200 in margin business. But for Hemoperfusion devices it does seem to be sequentially that we can execute – it doesn’t seem to be a code – at least it was a code out there not too long ago that we could potentially go through.

And then lastly and I apologize for taking so long. With all these things going on you’re going to have to start adding to your team. Can you share anything with us as to the kind of people and folks that you’re looking for talent?

Yes. So we rely – this is one of our challenges, Marc. We have a core team and it’s very productive. But we’re definitely going to need to expand the numbers of our team especially in the area of the clinical execution. We can’t rely on outside consultants, we need people thinking about our endeavors on a regular basis internally. And people for example with significant skills in executing on clinical studies and management in clinical studies. We have a number of opportunities based on our current status but our bandwidth is very difficult to unlock the opportunity if that exist. So business development people and internal people with good project management skills would be very helpful just to manage the moving pieces that we have going on presently. But also to allow us to actually pursue some other opportunities that – no, we’re not pursuing today because of bandwidth issues. It’s a cycle that you recognize that – now I think if you go to other small cap public companies and you look at the number of employees that we have probably in our market cap range, you probably would be surprise, the employee ratio to market cap as compared to where we are.

Thank you. I’ll be back – I’ll get back in the queue.

All right. Thank you, Marc.

Our next question comes from Yi Chen with H.C. Wainwright. Please go ahead.

Thank you for taking my question. Jim my first question is with your upcoming meeting with the FDA do you think there’s any chance that the FDA will allow Aethlon to market the Hemopurifier without additional trial.

Well, first I want to point out that that this meeting is specific to the Breakthrough Device designation and the indication underlying that designation. So, we still with the active ID even we have in place, it doesn’t inhibit our ability to run other types of studies where it maybe feasible to conduct controlled human studies. The issue with many of your life threatening viral pathogens, if that is very difficult if not – if not impossible in many cases to run controlled human study to demonstrate efficacy. And if we were a drug biologic or a vaccine, we would rely on what’s known as the animal rule which indicates in the absence to be able to conduct controlled human studies need to demonstrate efficacy in two different animal models if they exist. And this animal rule has been a very significant gaining factor for the advancement of countermeasures against high-thread pathogens. In our case the FDA had already indicated to us that we don’t fall under the animal rule. So the question would be in studies that viruses that are highly virulent long threatening there is no other approved therapy what would be our next clinical study to validate. The treatment of that pathogen and so we would certainly point to our history of safety in individuals treated with Hemopurifier therapy and we would also point to replicate in vitro studies where we’re able to validate capture of the target. And I believe probably the biggest damage we have were a scenario that you would mention again only in life-threatening viruses where it’s difficult to conduct a human clinical study would be the fact that, if our device is designed with a single use removable viral pathogens from blood we actually have an asset that we can quantify it, if viruses are captured in the cartridge. So we don’t rely on observational data, we can as provide – verification that we’re capturing the virus. So it’s a combination of factors but really not factored well they can validate the absolute that our device is absolutely performing up to its mechanism of action. Whereas, historic challenges with FDA for extra-corporeal devices, again, they often had to rely on observational data instead of an absolute quantification of performance. So we’re optimistic but there’s no upside for us to be too optimistic. If you think we’re going to get an immediate clearance. But we have been in discussions with FDA for awhile. We really appreciate these dealers that we worked with and I think we’re going to have a very productive meeting.

Okay, got it. But let’s say, FDA requires you to do some additional analysis not a human controlled trial but some analysis that you can reasonably completing let’s say six months timeframe. Then would you be – in terms of manufacturing capacity would you be ready for commercial size production? And how are you going to go about marketing Hemopurifier. Let’s say towards when it get clearance.

Yes. So the manufacturing – the marketing component is not as bigger challenge as the manufacturing component. Over the last two years, we’ve worked very hard to establish quality system, CGMP manufacturing the fibers, the cartridge shell that we utilize there already produced it scale. We utilize a matrix that we covalently bind our mobilized galanthus nivalis agglutinin, which provides that ability to bind to its unique high-immuno structure on the surface of viruses. But everything is scalable but one thing that is not scalable or hasn’t been scalable is large scale production of the galanthus nivalis agglutinin or GNA. And we have the ability to access GNA it scale but that one if isolated from its natural source. And that is not a cost effective manner to produce our product. We build an expensive product. So one of the things that we’ve been doing is exploring other methodologies and we’ve done this for a few years and we have the ability to insert the GNA gene into tobacco and [indiscernible] for large scale production in a very, very low price. And we really had – we’ve always had success in inserting the gene working with different plant based protein producers that work in tobacco. Never had a problem in inserting the gene or isolating the GNA out it’s just that we never saw the affinity or the activity that we normally seen from the natural product until we started working with a group called iBio in Texas – in Bryan, Texas. And they have a remarkable facility down there and we’ve work through Michel feasibility study to demonstrate that we can get activity that equals or exceed the activity we see normally from GNA via from the natural source. So we think that that’s a solution that kind of can unlock large scale production in a manner where we can have a price point that makes – that gives us very favorable margins. And that’s something we are working through right now. At present, when we have been manufacturing cartridges they are usually in lots of 120 to 200 cartridges before the clinical study or some other type of research program. So manufacturing is something that we think about an awful lot in advancing our capabilities on multiple fronts. But that production in GNA is a key component. And Jim Frakes wants to add to this as well.

Thank you. So now we are working because the cost of that key ingredient down, where still a large scale production, I wanted to address the timeframe element of your question. It takes us somewhere between two and three months to complete a production run. So it’s slower than the six month study in your original question. But I wanted to give you some feel for how long it actually takes to – the production run performed by our compact manufactures. I will turn it back to Jim Joyce.

Okay.

And we’ve now reached our allotted time for questions. This concludes our question-and-answer session. I’d like to turn the conference back over to Jim Joyce for closing remarks.

Thank you, operator. We appreciate everyone’s participation today. I know some of you have been long-term shareholders and watch us navigate through many challenges. And I’m very excited about where we are today. And we appreciate your continued support and look forward to seeing you in future calls. Thank you very much.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.