I have recently written a spate of predominately skeptical articles on CytoDyn (OTCQB:CYDY), a little OTC stock that was trading for ~$0.50 on 2/22/2019. That was the date of my first article setting out my biggest question at the time, "CytoDyn: What To Do When It's Too Good To Be True?"
A lot of water has flowed under the bridge between then and now; CytoDyn's story has become ever more unbelievable. Over that period of ~16 months, CytoDyn's share price has managed to rise up to a glorious ~$3.00. There seem to have been two particular stimuli which boosted the share price.
The first was CytoDyn's 12/2019 definitive arrangement with Vyera to commercialize leronlimab in the treatment of HIV; as shown below, this moved the stock from <$1.00 back up to ~a buck:
Data by YCharts
CytoDyn stock has been on a roll thanks in large part to leronlimab in the treatment of COVID-19
The big jump in late March of 2020, from ~$1.00 to ~$3.00 followed immediately on the tail of the news reported as follows on Seeking Alpha:
As I write on 6/3/2020, shareholders may ask what have you done for me lately. On 6/2/2020, CytoDyn's ever-resourceful and energetic CEO Nader Pourhassan [NP], participated in another of his Wall Street Reporter Next Superstock Live promo interviews, this one a 58.25-minute exercise [hereafter the "Promo"]. He set out an ambitious game plan.
For those who have not been following this story, it is an interesting one as a little OTC stock CytoDyn tries to play with the big boys. For a general overview of CytoDyn and its tremendous potential, see "CytoDyn's Lofty Promise."
Those primarily interested in CytoDyn's pursuit of a COVID-19 therapy can check out, "CytoDyn: Timeline To COVID-19 Credibility" and, "CytoDyn's Answer To COVID-19." These will bring you fully current to CytoDyn's COVID-19 therapy aspirations as of early May 2020. At that time, CytoDyn's COVID-19 initiatives consisted of three COVID-19 tranches, an EIND, a mild to moderate Phase 2 trial and a Phase 2b/3 severe or critical trial.
CytoDyn is wrapping up its successful COVID-19 EIND program
Before going into CytoDyn's game plan and its clinical trial progress, I will update its EIND program per the Promo. After allowing ~75 patients into this program, the FDA has told CytoDyn to end the program, and I am paraphrasing from NP's report "enough already, get us some data we can use." Accordingly, CytoDyn will not be enrolling any more EIND patients.
The Promo released the following slides reporting on the June 2, 2020 status of the program, starting with an update on the 11 Montefiore patients:
including the following note from Montefiore's Dr. Seethamraju as to his observations of the patients' medical condition:
Additionally, the following slide reports on 31 EIND patients treated at a Southern California hospital:
Other hospitals treated a cohort of 18 patients with results shown below:
All told CytoDyn's EIND program has to be counted as a resounding success. Not only did it give the stock a much-needed boost, it generated a favorable leronlimab NEJM article from the Montefiore doctors. Finally and most importantly, 60 COVID-19 patients received a therapy which seems to have treated them well given their conditions.
Of the 60 patients, 35 were critically ill. Leronlimab was their last best hope for survival. Of these 35, seven of the very sickest, the kidney patients at Montfiore, are most likely deceased, having withdrawn from life-saving care. Of the others, four are deceased, with 20 stable or improved.
In its advice to CytoDyn to hold off on further EIND applications, the FDA mentioned that it had approved 75 applications (10:56/58:25). I am not clear on what happened to the 15 approved patients not shown on the slides above. I will consider that a point for future investigation.
CytoDyn's COVID-19 game plan is moving towards FDA submission
The need for data from a controlled trial is clearly necessary, or so I, the FDA and CytoDyn now agree. To CytoDyn's credit, enrollment has been proceeding apace in both of CytoDyn's clinical trials even as it has been busily enrolling its EIND patients as shown by the clinical development summary slide excerpted below (8:32/58:25):
During the Promo, NP set out CytoDyn's time line. The game plan envisions closing CytoDyn's COVID-19 Phase 2 mild-to-moderate trial, ID NCT04343651, to new patients on June 15, 2020 (20:05-10/58:25). The trial protocol calls for a two-week course of leronlimab treatment period. Closing the trial by 6/15/20, assures that all patients will have had their two-week treatment by 6/30/20. Accordingly, CytoDyn expects to unblind the trial at the end of June.
Moving on to the Phase 2b/3 severe or critical trial NCT04347239, it already has >50 patients enrolled as shown above. Its Primary Outcome Measure is All-cause mortality at Day 28. Accordingly by June 30, 2020, a full fifty patients will have been on trial for 30 days. At that time, Cytodyn plans to conduct an interim analysis of these 50 patients (20:40/58:25).
Putting both trials together, CytoDyn expects to have a significant data bank of >100 patients. If the data is as good as Cytodyn is looking for it to be, NP expects that CytoDyn will seriously evaluate submitting this data to the FDA for approval of leronlimab in treatment of COVID-19.
I have been harping for a long time on CytoDyn to get its BLA filed for leronlimab in treatment of HIV as a combination therapy. Now that it has done so, there can be some confidence that CytoDyn has the safety data (1:45-2:22/58:25) and manufacturing data (3:26/58:25) that will be required for its COVID-19 filing.
CytoDyn's Promo also addressed sundry other issues of importance to shareholders
The Promo provided a tasty smorgasbord of issues that should interest shareholders. Critics have lamented the dearth of credible articles supporting leronlimab. One article that has been of great interest is Dr. Bruce Patterson's article describing his analysis of data from Montefiore COVID-19 patients; it is now available on the internet undergoing peer review.
His article on the internet describes his findings including:
...[in regard to] 10 terminally-ill, critical COVID-19 patients we report profound elevation of plasma IL-6 and CCL5 (RANTES), decreased CD8+ T cell levels, and SARS-CoV-2 plasma viremia. Following compassionate care treatment with the CCR5 blocking antibody leronlimab, we observed complete CCR5 receptor occupancy on macrophage and T cells, rapid reduction of plasma IL-6, restoration of the CD4/CD8 ratio, and a significant decrease in SARS-CoV-2 plasma viremia.
CytoDyn shareholders are anxious for actual publication of this article in hopes that it can be a catalyst to move shares up another step, reliably leaving its ~$3.00 print in the dustbin of history. The Promo acknowledges this as being in process but does not give any estimated time frame for publication (5:06-5:29/58:25). It further suggests two more papers discussing leronlimab in treatment of COVID-19 will be submitted shortly to the New England Journal of Medicine.
The discussion also gives a rundown on additional clinical trials being bruited for leronlimab in treatment of COVID-19, as shown on the excerpt below from the Promo's clinical trial slide:
My takeaway from the discussion is that the trial with Remdesivir is likely to be scrapped as an unneeded and expensive diversion (9:03/58:25). On the other hand, there is great enthusiasm for a possible 25 patient Phase 3, (not Phase 2 as shown in the slide) to take place on an expedited basis in Mexico (9:10-10:02/58:25).
NP expects a brief enrollment period of several weeks. The trial could be complete a month later. Preliminary indications are that if Mexican results are good enough that it, coupled with such other data as might become available, including EIND data, would be sufficient for an application to the Mexican FDA.
One development CytoDyn shareholders have been eagerly awaiting is an uplisting from OTC to a major exchange. This has been an issue which has received varying degrees of management attention during recent years. When CytoDyn stock was resting <$1.00 this was not a priority issue. Now with the stock showing an ability to stay at ~$3.00, it has taken on greater urgency.
Uplisting was the first question to NP during the Promo (24:00-25:10/58:25). NP answered in his inimitable style; CytoDyn has filed an application to an unnamed exchange. A dialog is underway. NP is optimistic that CytDyn can uplist without requirement for a large cash raise and without a reverse split. I also lean towards optimism here. CytoDyn's daily share volume during 2020 has been reliably in excess of 2 million, spiking to tens of millions. I can believe that an exchange might try to craft a workable deal.
Another subject of interest to shareholders has to do with prospects for a non-dilutive financing. There are a variety of potential sources for such a financing. The one that strikes me as the most attractive is collaboration. Take for example, Athersys' (OTC:ATHX) deal with Helios for an ARDS therapy in Japan as I discuss in a recent article.
If CytoDyn pulled off a deal like that it would give it and leronlimab much-needed validation. The fact that it has not managed such a deal is one of its biggest failings in my eyes.
The other relatively pain-free way that CytoDyn might generate some non-dilutive financing would be a grant from the government or an NGO. On the subject of grants, NP advised that CytoDyn has generated a huge US government application file (25:20-25:50/58:25); he offered no particular optimism towards the process. My read is that a near-term grant is unlikely; I hope I'm wrong.
I am glad to say that CytoDyn is not looking for debt financing at the moment (38:20/58:25). Security requirements for such a deal for CytoDyn would be very dangerous in my view. In response to any investment bank financing, NP begged off saying he could not speak on the subject (52:00/58:25).
Conclusion
CytoDyn bulls are cheerful, trusting people confident that they have placed bets on the top thoroughbred in the stable. One thing that makes them exceedingly grumpy is when someone questions the received truth of leronlimab's exceptionalism.
I have just such a question. If leronlimab is as potent a therapeutic as bulls contend, why has no one been willing to come forward with any meaningful partnership deals. I recall hearing time and again of, always unnamed, big pharma players who are in talks with CytoDyn - but no tasty deals are ever struck.
Where does all this leave CytoDyn in terms of a bull/bear debate? I remain skeptical. Until leronlimab receives validation, say an FDA approval for leronlimab or a collaboration with a sophisticated player who is putting some skin in the game, it is too risky for me. I am going to remain a small stakeholder.
Until then, CytoDyn is just another OTC stock with a big story and a small purse. During the Promo, NP explained how he and CytoDyn's chairman had to exercise stock options and warrants just to keep up with its Samsung obligations. He bragged that he had been working hard to clear up CytoDyn's payables such that only 16% were over 30 days (41:45/58:25).
The Promo ranged far and wide. I have tried to give the highlights. I look forward to constructive comments critiquing my effort. I know from experience that I will get some thoughtful comments along that line and that I can also look forward to some serious brickbats. It goes with the territory so I will have my helmet handy.
Those who are willing to gamble on a high risk/high reward OTC biotech can expect a gut-wrenching ride.
