Yesterday CytoDyn Inc. (OTCMKTS) delivered a gripping investor update after hours clearly projecting a bright path forward that included an uplisting to a major exchange without immediate term dilution. In addition, the company clearly defined its plan to get a major investment banker to proceed with the uplisting and then either finance its growth at higher equity valuations or license some of its massive pipeline of 32 indications. What was very clear from the call is that they believe that one of their COVID-19 trials has hit the mark for a possible interim readout now that 2/3rds of the patients have been enrolled, but that decision will be evaluated in another two weeks as they ramp of enrollment and see how far they can get toward their goal of 75 patients. CYDY also indicated the positive development that FDA was more interested in them finishing the Phase II trial than giving them blanket compassionate use for leronlimab in severe COVID-19 patients. Because of the recent confusion from the vaccine and hydroxy-chloroquin pronouncements, versus the trials, and the Remedesivir trial issues, the FDA is getting more conservative. This FDA administration clearly wants results from a well controlled trial which they agreed the CYDY protocol meets. .
Remdesivir Failure Leads to a New Leader in COVID-19
After the recent failure of remdesivir on severe COVID-19 patients, CYDY is now categorized as a front runner in monotherapy treatment by Genetic Engineering & Biotechnology News. The National Institute of Allergy and Infectious Diseases (NIAID) ran a large controlled study to evaluate the safety and efficacy of remdesivir and used preliminary results of the accelerated time to recovery endpoint to issue an Emergency Use Authorization for COVID-19 in adults and children. The rationale behind the approval was that the median recovery time was 11 days for patients treated with remdesivir versus 15 days for those that received the placebo. With no other treatments reading out in a large randomized controlled trial, Dr. Fauci declared in an interview with NBC News that remdesivir was “the standard of care, “ but cautioned that while the results were statistically significant, we still need a treatment for severe and critical patients with more meaningful results.
The shortcomings of remdesivir were apparent once the full dataset was reported in a New England Journal of Medicine Article that showed the benefit was more limited in scope. The study revealed that there was no benefit for those with the most severe baseline status who were on non-invasive ventilation or intubated on a ventilator, or who were receiving extracorporeal membrane oxygenation (ECMO). The mortality was 7.1% in the remdesivir group versus 11.9% in the placebo group. The benefit appeared to be much bigger among the group that was less sick. Putting the science aside and just using common sense, remedesivir is only an antiviral. Therefore, the later it is given the less effect it should have as the viral infection gives rise to the cytokine storm which in turn leads to mortality. Remdesivir has not demonstrated any effect on the cytokine storm.
CytoDyn’s drug, leronlimab, has a unique mechanism of action that quiets the cytokine storm in patients. This was demonstrated in the compassionate use patients’ blood tests. Dr Lalezari revealed in a Superstock Live presentation that its compassionate use results showed that “a great majority of patients are starting to show improvement within two to three days of the first dose.” There was a consistent change in biomarkers by day three whereby the IL-6 levels returned to normal, the CD4/CD8 ratio improved, and there was a notable decrease in serum viral load. In addition to these biomarkers, CytoDyn was measuring the levels of Rantes (CCR5) and discovered a trend that in mild to moderate COVID-19 patients it was elevated about 5 fold and in severe to critical patients the number was elevated 100 fold over normal levels. The discovery of the pathogenesis of the disease was spelled out in the preprint article called Disruption of the CCL5/RANTES-CCR5 Pathway Restores Immune Homeostasis and Reduces Plasma Viral Load in Critical COVID-19. Dr. Patterson labeled COVID-19 a “Rantes disease.” This journal article is currently under peer review.
On the Superstock Live update in mid May, Dr. Patterson explained a case study where a woman was on ECMO for 30 days, and then 3 days after leronlimab treatment came off the ventilator. This woman failed remdesivir, the current standard of care,. Dr Patterson said: “anecdotes don’t come off of life support.” These anecdotal reports have earned CYDY the lead position in the race for a COVID-19 treatment.
Clinical Trial Updates
The company also reported that 50 patients were dosed in the phase 2 mild to moderate COVID-19 trial which allows them to do an interim analysis. In the Phase 3 study for severe COVID-19 patients 37 patients were enrolled. This phase 3 study also had an interim readout at 50 patients, but has not yet reached the threshold. Enrollment was supposed to have been completed by the end of the month. The company cited many reasons surrounding the prep work needed to launch a clinical trial site for the delay, but was optimistic that the issues had been sorted out and that 6 sites were actively recruiting.
There were over 65 compassionate use patients which actually exceeded the 61 patients in the Wuhan China remdesivir study. Given the thousands of remdesivir patients enrolled around the world only 61 were included in the study versus the 65 leronlimab patients on compassionate use which is just slightly lower than the 87 enrolled in the controlled study. This is further anecdotal evidence that leronlimab works.
The BLA was submitted weeks ago, but now CYDY asked for FDA priority review, and is expecting it within the next couple of days. After a brief respite due to COVID travel bans, the cancer basket trial is back online and recruiting patients. The ability for patients to travel again and get to their clinical trial sites should help enrollment rates.
The company broke the news that the chairman Scott Kelly was working on the design of a new NASH animal study that could result in a licensing deal if the results come in as expected.
Development Strategy
CytoDyn is expecting its increased access to capital markets will enable it to be in a much better position to develop more of the substantial pipeline. Along those lines the company indicated it was looking to hire a commercialization officer which seems imminent. The company indicated this person was from big pharma and when officially announced would surely raise eyebrows. It’s reasonable to speculate that all the licensing activities over the past year helped forge relationships that could benefit their commercialization trajectory. The leading cancer companies are Merck (MRK) and Bristol-Myers Squibb (BMY). The HIV companies are Gilead Sciences (GILD), GlaxoSmithKline (GSK), and Johnson and Johnson (JNJ). Should a sitting executive leave the safety and security of one of these posts in favor of CYDY, the investor sentiment could soar after the new hire’s name is announced.
The commercialization officer is going to be very busy developing licensing deals for up to 32 indications. CytoDyn’s interim CFO mentioned that he was putting together a team and the CEO Nader Pourhassan indicated that Michael Mullholland was being presented to the board of directors. Based on this fact, after the ratification of Michael Mullholland is announced, investors could get a peek at the new hire, who would likely be approved at the same board meeting. Leronlimab is a platform technology and the CEO indicated that the strategy was to get the drug approved and then do a label expansion for additional indications.
Licensing Opportunities
This year the company has been kissing a lot of frogs but hasn’t been able to find the prince. When COVID-19 broke out there was a rush to get this into the hands of the Chinese. The company announced their partner, Longen, but nothing materialized due to the Chinese dramatic ability to stamp out the virus. Then the focus shifted to South Korea which was another burgeoning hotspot, but their partner Samsung Biologics followed the money and entered into a big pharma deal with Vir Biotechnology Inc. (NYSE:VIR), and GlaxoSmithKline (NYSE: GSK) for manufacturing focused around a vaccine. After that the company seemed to have made inroads into Japan but then news broke of FujiFilms (OTCMKTS:FUJIY) antiviral generic influenza drug called Avagin (favipiravir). Favipiravir had gained so much momentum so quickly it was hard for CYDY to compete, but Japan is still in the que. Then news of Boris Johnson’s sickness from the United Kingdom brought speculation that leronlimab might be a promising candidate. On this investor update Nader Pourhassan explained that development talks in the United Kingdom were stalled, but still very much alive.
The final licensing opportunity that really seems to be coming together fast and gaining momentum is the Mexcican deal. The company is talking to Gustov Teran which is Anthony Fauci’s counterpart in Mexico. For example, Mexico City has a big infection issue on its hands and the country needs a real solution because social distancing isn’t feasible. The situation in the country is so dire they aren’t tallying deaths like they should. The New York Times reported “thousands of deaths in Mexico City are not being tallied.” The unofficial estimates put the death toll 3 times what was officially reported. Leronlimab seems like the perfect match. The Mexican government is proposing clinical trials of leronlimab and lerlonlimab and remdesivir in combination.
Manufacturing Update
CytoDyn indicated that a total of 1.2 million vials had been ordered from Samsung Biologics and that 120,000 vials were due to be shipped the last week of June for arrival the first week in July. The company addressed an investor question regarding the shelf life of the drug. Essentially stability is not an issue because the product can be kept in a vial for up to 2 years. If the company wants to stock up on the drug, then they can store that bulk product for 5 – 6 years in a frozen state before transferring into a vial.
Journal Articles
The company indicated that multiple papers were coming out. The most anticipated was in preprint and mentioned earlier in this article. CYDY indicated in this update call that it could take as long as 8 weeks to get published which means in the next 4 weeks it’s expected to be published. There is another article expected from Dr. Harish Seethamraju with respect to the 6 renal transplants that were a subset of the study group.
Although not related to COVID-19, Dr Sacha’s abstract for PrEP was presented at the Keystone Conference instead of as a late-breaker abstract at CROI. Apparently the announcement as a Late-Breaker Abstract violated the embargo policy at CROI. Dr. Sacha did an animal study that demonstrated that leronlimab prevented intrarectal transmission of Simian-Human Immunodeficiency Virus (SHIV) in macaques. This was the basis for a Thai Red Cross PrEP study.
Investment Summary
Overall this was a positive update as it looks quite promising that the company will be able to uplist in short order and bring in much needed financing on better terms. The only disappointing spot in the update call was the goal to be fully enrolled by the end of may will not be reached. The company did however reach a threshold of patient enrollment which allows them to do an interim readout. The decision to readout will be decided within the next two weeks. There is investor cause for optimism because they could start another study in Mexico that goes head to head with remdesivir. With only a small group of patients needed in a besieged country the enrollment and approval process could be swift and decisive. Anecdotal data and common sense clearly indicates that leronlimab is going to crush the endpoint in severe COVID-19. When remdesivir announced results, there was no statistical significance with respect to mortality, but that is widely expected to change when leronlimab reports. Anecdotal results from the Montefiore Medical Center compassionate use trial showed there was a 40% mortality rate versus the expected 88% mortality rate in critically ill patients. There is clearly forward progress in the COVID-19 clinical trials, that makes leronlimab the next drug in the zone for FDA approval.
Disclosure: we hold no position in CYDY either long or short and we have not been compensated for this article. The articles was provided by a 3rd party to EDM Media LLC and we have not verified any of the info before posting.
