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Wednesday, 04/27/2011 10:06:40 PM

Wednesday, April 27, 2011 10:06:40 PM

Post# of 18494
From the CEO, dated 6/2010 - Part 2

I suspect most individuals following the HCV treatment industry are not yet aware of a medical device study that demonstrated the mechanical removal of HCV through blood filtration outperforms Telaprevir as an adjunct to SOC therapy. The insight provided by this clinical validation should significantly benefit our endeavors. In a 63 patient study conducted in Japan, Asahi Kasei Kuraray Medical (Asahi) demonstrated that double filtration plasmapheresis (DFPP) when administered at the outset of SOC therapy provided a 77.8% SVR in HCV-infected patients. In patients who previously failed SOC, DFPP treatment provided an average SVR of 71.4% versus the 51% previously referenced in Telaprevir clinical studies. On average, each patient in the Asahi study received three DFPP treatments each lasting 3.14 hours. In the study, DFPP was administered once daily for three consecutive days at the outset of SOC therapy and provided an average viral load reduction of 26.1% during each treatment period. Amazingly, the 71.4% and 77.8% cures rates were achieved without any additional DFPP during the remaining SOC treatment regimen. As a result of DFPP treatment outcomes, Asahi has advanced DFPP beyond treatment candidate status to actively marketing the treatment in Japan as the V-RAD system, which Asahi derives from the phrase "Virus Removal and Eradication by DFPP". Additional information can be accessed online at: www.v-rad.jp/en/index.html. I shall keep my comments directed towards the science underlying the V-RAD system and not the animation you will encounter at this website. Regardless, the website is quite informative.

However, there are significant limitations for DFPP as compared to our Hemopurifer(R). Like other approaches to therapeutic filtration, DFPP relies on multiple pumps and filters to indiscriminately remove particles by molecule size. For this reason, DFPP also extracts particles beyond HCV that are required for patient health. The safety profile of DFPP can be further diminished by the need for replacement fluids. In combination, these factors limit the time an HCV-infected patient can be exposed to DFPP treatment.

The advantages of our Hemopurifier(R) as compared to DFPP include the following:

The Hemopurifier(R) provides a greater reduction of HCV from circulation during treatment. Our data resulting from over 20 HCV treatments indicates an average viral load reduction of 41% during four-hour treatment applications of the Hemopurifier(R).
The Hemopurifier(R) augments the immune response by removing toxic proteins shed from HCV to kill-off immune cells. These proteins are too small to be captured by DFPP.
The Hemopurifier(R) is designed to selectively capture HCV and immunosuppressive proteins versus the indiscriminate removal of particles by DFPP.
The Hemopurifier(R) is one single-use disposable cartridge versus the requirement for two cartridges and multiple pumps with DFPP.
The selective ability of the Hemopurifier(R) to capture targeted viruses and immunosuppressive proteins (versus the removal of needed blood components) allows for a continuous Hemopurifier(R) treatment strategy to rapidly reduce viral load to low to undetectable levels. Thus, increasing the likelihood that HCV infected individual can be cured by SOC therapy.

While we believe our Hemopurifier(R) has obvious advantages over the DFPP system, I wish to expand on point #5 as it provides a foundation to support our treatment goal of increasing HCV cure rates up to 90%. Based on published treatment literature, it is well established that patients who initiate SOC and achieve a rapid viral response (RVR) have significantly higher cure rates. RVR is defined as undetectable viral load at day 30 of SOC treatment. In fact, published literature indicates the small percentage of patients who do achieve a RVR have cure rates that range from 86-92%. Based on our Hemopurifier(R) data, we believe it is possible to achieve undetectable levels of HCV in week one of SOC therapy, not day 30. Based on data analyzed from four-hour Hemopurifier(R) treatments, we project that a patient with a high viral load of 7 million iu/ml might be reduced to undetectable HCV levels after approximately three days of continuous Hemopurifier(R) treatment. This corresponds to a 4.06 log reduction or a 11,000-fold decrease in viral load. An HCV patient with a moderate viral load of 2 million iu/ml would be projected to reach undetectable levels in approximately 2.5 days of continuous treatment. Such outcomes would position us to achieve our 90% cure rate goal and may allow for decreased dosages and duration of SOC therapy.

To leverage our opportunity in HCV care, we are pursuing strategic relationships that will broaden our ability to commercialize in practitioner driven markets, or accelerate our clinical opportunities in the U.S. and European Union. Additionally, we have responded to a grant opportunity to advance a diagnostic based Hemopurifier(R) and have been working on a candidate clinical protocol for a grant proposal related to the use of our Hemopurifier(R) as an adjunct cancer treatment to remove tumor secreted exosomes known to suppress the immune system of cancer patients. The data from these cumulative activities, including recent HIV and HCV treatment outcomes, will cause us to update the investigational device exemption (IDE) we have previously filed with the FDA related to use of our Hemopurifier(R) as a treatment countermeasure against bioterror and pandemic threats. In this regard, we were recently advised that we were a candidate being considered for a contract award from the Biomedical Advanced Research and Development Authority (BARDA). This was related to a multi-agency contract solicitation known as DMID-NIAID-NIHAI20080022BARDA. We have since been advised by BARDA that they will not be granting awards under this solicitation. BARDA has encouraged to update our data collected since our original submission and resubmit a new proposal to a BARDA specific contract solicitation known as BAA-BARDA-09-34. As we believe our Hemopurifier(R) represents the most advanced broad-spectrum treatment strategy to protect our military and civilian populations from viruses considered bioterror and pandemic threats, we plan to provide BARDA our new submission no later than July 31st. Regardless of these opportunities, our primary focus moving forward will be the treatment of Hepatitis-C.

On behalf of our dedicated team at Aethlon Medical, I thank you for your continued support.

Very truly yours,

James A. Joyce

Chairman, CEO
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