After an FDA statement on Monday May 17th, 2021, CytoDyn Inc. (OTCMKTS: CYDY) was indirectly forced to publicly respond to it. The FDA statement was in response to the “significant public interest” undoubtedly referring to the many doctors and investors bombarding the FDA through email, twitter and other methods looking for answers as to why they weren’t approving the drug. For the past 3 months after the top line data was released investors have been their own worst enemy. The message boards have been aflame, blasting the FDA and management for what posters view as the inept handling of the situation. The FDA has a job to do and they have specific criteria and it all revolves around something called a p-value. They are also engaged in numerous trials and need to be consistent in how they treat trial results. A p-value less than .05 for the primary endpoint means that the trial is statistically significant. One reason for the public outcry is that Dr. Janet Woodock, Acting FDA chairman, has publicly stated that “no one should die for a p-value”. The FDA’s inaction seems inconsistent with this perspective.
Poorly Crafted FDA Statement Fuels Greater Criticism
The FDA statement itself had no real value to the company because it echoed the communication Cytodyn already disseminated months ago and regurgitated data from the early stage of the top line data release and did not address the most recent findings. The essence of the FDA message was cast aside quickly. One unintended consequence of the letter was that it further fanned the flames of criticism because there were certain nuances of the letter that were factually incorrect including omission of the CD10 trial that achieved a statistically significant improvement in the NEWS2 score.
FDA Acknowledgment of Leronlimab as a Treatment Option
The FDA message did have one positive, because it broke their silence over the last few months. They said the current data itself is not sufficient to warrant approval. The specific comment of no clinical benefit is debatable because the critical patients were part of a predefined subgroup with specific entry criteria defined in the trial protocol and showed statistical significance in four secondary endpoints.
A key issue is that the sample size only had 62 patients. Subgroup analysis may help to form a hypothesis, but that rarely leads to approval. An additional trial is needed to “inform the design of future clinical trials investigating leronlimab”. There is nothing the FDA can do until the company completes the trial and generates statistically significant data for the primary endpoint.
FDA Criticism Stings Investor’s Wallets
A potentially larger unintended consequence is that the statement may hamper the ability of Cytodyn to do the additional trials already planned in Brazil and India as well as impact discussions in the Philippines and Canada. That fear that international players would follow the FDA lead was one of the main factors in the selloff. On the latest shareholder update call held on May 18th, the CEO of Cytodyn, Nader Pourhassan mentioned that they have already been on the phone with their partners in these countries explaining that it has no impact on their plans for development. Pourhassan has been defiantly defending the FDA and their actions after he gave his best shot at a conditional Emergency Use Authorization (EUA) back in February.
Cytodyn’s ask on the conference call was to essentially stand down on the outreach to the FDA and let them do their job. One positive aspect of the statement is that it is clear that the FDA is very familiar with leronlimab. When the next trial hits a statistically significant primary end point it will be clear “evidence of benefit” and should lead to approval. If the hypothesis created from the critical results bear out, leronimab will be a gamechanger for Covid that will save lives and provide a much needed therapeutic option for variants. Unlike other therapeutics, leronlimab’s mechanism of action is well studied and directly measurable during treatment. Other studies have shown that people that lack CCR5, the target of leronlimab, have less severe forms of Covid. eIND and open label use has also provided significant anecdotal evidence on leronlimab effectiveness.
CytoDyn Still Has the FDA Green Light but No EUA
Parts of the statement suggest that there just isn’t evidence of efficacy yet the closing part of their statement suggests they are still open to working with CytoDyn. This mixed message has a silver lining because not once was safety mentioned as an issue. Stephen Hahn the last FDA Commissioner in an interview said
Since the FDA doesn’t believe there is “evidence of efficacy” it’s completely understandable why no EUA has been issued. Regarding an EUA, leronlimab has clearly passed the safety portion of the criteria. The second part of the criteria is “may be effective” has been a big grievance with the doctors clamoring for it. With all the anecdotal evidence and the impressive newly released 14 day topline data the FDA is really treading on thin ice by taking this position. Looking at the context of the FDA statement it is squarely focused on full approval and appeared to kick the can down the road with respect to the EUA. Even though there is no EUA the company said they were still accepting people in the Open Label Extension (OLE) trial so the notion that people are dying because they cannot get the drug is inaccurate.
Given the unintended consequence of potentially impacting the follow-on trial effort, the FDA should consider a more supportive stand with Cytodyn in support of the clinical trials. At the same time, investors and other advocates should take note that they have gotten the FDA’s attention and respect the wishes of CytoDyn by stopping outreach to the FDA.
The FDA is on the record now regarding their stance on leronlimab so this isn’t something that is going to get swept under the proverbial rug. It’s also clear that the FDA overreached in its statements regarding the effectiveness of leronlimab and now that they “opened the door” on commenting about a drug in active clinical trial they may have to revise their statement about the effectiveness of the drug given the new topline data from the company about the mortality rate on day 7, 14, 21, and 28.
This topline data clearly shows the drop off in benefit on day 21 from not dosing with the drug. This 14 day data is new and has not yet been studied and may meet that EUA test of “may be effective.” So the shorts betting on no EUA in the United States may yet be in for a surprise. There is a lot of publicity surrounding leronlimab that prompted the FDA statement, so the data will be analyzed by the FDA. Independent doctors like Dr Lalezari have taken to the airwaves lobbying for an EUA for critical COVID-19 patients. This interview is excellent as Dr. Lalezari explains why the FDA needs more data and explains the rationale behind the new dosing regimen and how it was a factor in the success of the upcoming trials.
Recruitment Internationally – The FDA got the pandemic in the United States under control so at this point it would be difficult to recruit severe patients in the United States. Clinical trials will be run in Brazil and start in June or also be run in either India, or Canada. India will need a trial there before any EUA could be approved.
Indian Approval Pathway – the model the company is using is similar to how tociluzimab got an EUA in India. Roche did a large 4000 patient trial but CYDY doesn’t have the resources for that. The company plans a protocol with an endpoint that is time of the hospital and will not be using mortality. The company developed a new biomarker analysis for the trials. Their distributor Macleods Pharmaceuticals is pushing all regulatory pathways for approval and received a commitment from the company for up to 200,000 vials of leronlimab.
Long Haulers Largest Market – Chairman Kelly pointed out that the long haulers market was a much larger opportunity than severe COVID-19. The study is only 50 patients and the goal is to find the correct biomarkers that translate to symptoms. After completion it would not be enough data for an EUA but would pave the way for a phase 3. They have new equipment that uses mass spectrometry to further define the Mechanism of action
Cancer Breakthrough Meeting – The company indicated that they put a request in for Breakthrough Therapy designation. They have a new CRO that specializes in Oncology and are hoping for the pre BTD meeting in the coming weeks.
Brazil Approval Pathway – 2 trials are being run in Brazil. Brazil made it clear that if they met their endpoint at the midway point there was a potential of an EUA. The critical study expects to enroll 360 patients with an interim analysis. Since there are currently 20,00 patients in ICU they don’t believe it will take long to enroll 120 patients.
Philippines Orders – the purchase order from the Philippines needed to be signed off by the Philippines FDA. There was a delay in getting the proper signature but it’s still expected. The data from the first 28 CSP patients has not been released
Manufacturing Update – no new plans for more drugs, but the lines of communication are open should they need to order more vials.
Canadian Approval – They are in the process of fling their rolling BLA submission. It’s expected in approximately one month.
HIV BLA – Set to file it in July as planned.
The FDA statement was a response to disrespectful communication from shareholders and activists to the FDA. The primary purpose of the conference call was to show the FDA that the company was not involved in instigating an attack on the FDA. This call wasn’t really for the investors. Backlash from investors is expected as the FDA released information that was not completely accurate. The 14 day topline data demonstrated the trial design with 2 injections was far from optimal. The tone and content of the letter spooked some of their international partners, but the company has since smoothed over the issues and everything is proceeding as planned. The first region to see commercial activity is expected to be the Philippines with their CSP program. The company is still expecting a signed purchase order shortly. The protocol for Brazil is being firmed up and they are expected to enroll patients in June and based on current projections it should be swift. Macleod is a top pharmaceutical in India and has very good connections and is expected to get a trial going within a month. The long hauler readout is also expected in June and could be a significant catalyst for the stock price. It should be clear to all investors that the FDA statement was hijacked by the shorts as being a very negative announcement. It was neutral at best and acknowledged that they knew about CYDY.
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