- Clinically Significant Data in 18 of 24 Symptoms
- Seeking Breakthrough Therapy Designation in Long-Haulers and Cancer
- Definitive timeline for HIV BLA Filing by October 2021
- Dosing of 1st Brazilian patient by end of July with rapid enrollment
- Big Pharma partner potential
CytoDyn Inc (CYDY) announced clinical trial data from the first long hauler study in the world. Their CD 15 COVID-19 Long-Haulers study was an exploratory study on 56 patients that looked into the effect that leronlimab would have on 24 symptoms in what is now called Post-Acute Sequelae SARS-Cov-2 Infection (PASC). Patients in the trial were required to electronically submit a report of their symptoms daily. The primary endpoint was a change in baseline of the daily COVID-19-related symptom severity score, but the endpoint wasn’t powered for statistical significance and therefore not released by the company. This omission of the overall percentage reduction in clinical symptoms doesn’t negate the fact that the trial results were extremely positive and exceeded expectations by charting out a clear pathway to approval within the year. Investors seem to be missing the point that Long-Haulers is a much bigger market than COVID-19 and potentially has a much more condensed pathway to approval and would likely have the “political backing” of the FDA.
Investor Paralysis in Comprehending the Data Set
The press release and presentation of the Long-Hauler trial data didn’t adhere to any predefined format from the past. CytoDyn management’s apparent dramatic shift in policy regarding the top line release must have caught investors off guard because the reaction has been complete and utter malaise in the stock price and the message board analysis. INVESTORS that think this was a ho hum press release have GOT IT WRONG and need to understand this trial was a resounding success that obliterated any doubt that the drug works in PASC..
By all accounts the clinical trial results were phenomenal and verified all the anecdotal reports that the drug works. Miranda Erlinson, the teacher that became wheelchair-bound and was able to walk again was indeed in the leronlimab cohort as well as outspoken patient advocate Eli Musser. The patient that reported she thought she was a placebo was in fact a placebo. The anecdotes were in complete alignment with the clinical trial results.
The company presentation of the data seemed to overwhelm investors trying to understand what it all meant. There was no overall top down summary of the data but rather a discussion of the individual symptoms. One of the biggest challenges of getting the Long-Hauler trial started was figuring out what the endpoint should be in a disease that has tremendous variability. There was no scoring system, but just a number of symptoms that characterized the disease. Another issue was classifying the patients without using biomarkers. The exploratory study had a number of variables and data points. This data set will advise the future dosing and provide useful biomarkers that can more accurately assess the disease state and successfully predict outcomes when using the drug.
What was missing from the data release was an overall number that showed the dramatic improvement over placebo. While the company might be concerned about appearances to the FDA and took the cautious approach by not releasing a composite number investors are under no such constraints. A composite score analysis showed a 189.63% reduction in symptoms over placebo. The score was developed by figuring out the total number initial incidences of symptoms in the entire population and weighted them accordingly to develop a composite score. This across the board level of improvement cannot be ignored by the FDA. The biggest unknowns that will need to be discussed with the FDA are the inclusion data, how to rate the disease severity, the dosage, duration of dosing, and most importantly the methodology to measure efficacy. The safety data was excellent.
FDA Praise Ends – All Business with Long-Hauler Focus
“It has become clear that the data currently available do not support the clinical benefit of leronlimab for the treatment of COVID-19.”
Many investors took this to mean that leronlimab didn’t show efficacy. They took the FDA at its word, but let’s be crystal clear, there were a number of factual inaccuracies in the FDA statement. Since the FDA had never in the history of their organization commented on a drug in active clinical trials, it’s reasonable to assume the statement was politically motivated. Most understand that politics and factual accuracy don’t always mix well.
What upset the masses was that the CD10 and CD12 data overwhelmingly supported clinical benefit, but it was tossed out like a judge tosses out evidence in a case that was obtained without a warrant. The CD 12 study reported a reduction in 14-day all cause mortality that was statistically significant 82% (p=.023). The FDA labeled the best results seen worldwide as “hypothesis generating data” which is music for drug developers ears. Unfortunately FDA rules do not allow any endpoints that fall outside the primary endpoint to be considered for regulatory approval. Many drug companies and investors anticipated the FDA would bend on these rules due to the pandemic nature of the disease and the fact that people were dying en masse. Laws governing the FDA were enacted by Congress, and all the FDA was doing was following those laws.
This is a hard pill to swallow given the massive loss of life that could have been prevented if the FDA had given itself more leeway with the endpoints. This is however, an issue to be taken up with congress, not the FDA. So when investors and advocates became abusive to the FDA instead of Congress the FDA defended themselves and wielded a deathly blow to investors in the form of an FDA statement that ended up being highly inaccurate and prejudicial toward other regulatory agencies like the Philippines that were considering approval.
The reality of the new data is pointing to a huge FDA blunder for not making an exception for leronlimab approval, but rather going all in on the vaccine strategy. If leronlimab eventually gets FDA approval in the United States for severe COVID-19, undoubtedly questions will be asked why it wasn’t approved earlier and how an 82% reduction in mortality could have saved hundreds of thousands of lives. The FDA really needs a distraction from the statistically significant secondary endpoints from the CD 12 severe COVID-19 trial. It’s not in the FDA’s best interests for CytoDyn to finish the severe COVID-19 trial in the USA for it will draw attention to the agency. It would be coined as an epic failure of the regulator who chose to focus on p-value versus lives. Accelerating CytoDyn’s approval in Long-Haulers offers the FDA a face saving exit because with an approval in Long-Haulers it’s very likely that CYDY will drop its ambitions in severe COVID-19 based on the small market size and the eventual availability of a drug that could be taken off-label for that indication.
In the latest investor call CytoDyn clearly wanted to distance itself from the politics of the situation. There was no longer praise for the FDA, they were all business and simply wanted to consult with the FDA and agree on a protocol for the Long-Haulers trial that ultimately leads to regulatory approval. This is the likely reason for the lackluster headline press release whose title was unlikely to provoke any regulatory ire. During the call there seemed to be a much higher level of restraint by management. Inwardly they probably wanted to scream about how great leronlimab is and that it might amount to a treatment for some and a cure for most. They did however display some of their enthusiasm when they discussed the strong possibility of getting a breakthrough therapy designation (BTD) because Long-Hauler has become a very large unmet medical need.
Clinical Trial Design
Many investors were critical of the Long-Haulers exploratory design instead of an adaptive trial, but in the conference call the company tipped its hand that it was working on the intellectual property behind the science. In order to be effective in writing the patents they needed more data and the exploratory study gave them a better idea of the dosing and the right type of symptoms to pursue along with the mechanism of action.
Nailing the endpoint in the next study seems to be their mandate. This exploratory data will ideally give them a better idea between the treatment groups. There was an overwhelming response to the drug but the company is hoping to fine tune the data to find some sort of split between different types of the Long-Hauler disease and different severity levels. The clues should reside in the biomarker analysis. The more refined the model the fewer patients they will need to get a response which may accelerate the trial if an interim endpoint is built into the trial design. They seem to be playing the big pharma game which optimizes the patient population to show a statistical difference between the active and placebo arm.
Dr. Kelly indicated there are many similarities between Long-Haulers and Chronic Fatigue Syndrome. This revelation may be helpful and potentially allow them to tweak a clinical trial for Chronic Fatigue Syndrome making it a much easier sell to the FDA. The bonus of this exploratory study relates to the overall development of leronlimab as a platform technology. Many of the other indications were waffling in development due to inadequate dosing levels. With no SAE’s in Long-Haulers and 28 people injected with 8 weekly doses of leronlimab the FDA’s argument to hold back dosage as they have done in the past in other indications like cancer or NASH will no longer be a talking point.
The new trial design of long haulers is expected to build upon everything the company has learned with its clinical trials. This will further reduce the risk of not meeting the endpoints and allow them to nail the study.
The lab work and biomarkers appear to be central in figuring out the Mechanism of Action (MOA) of leronlimab as an immune modulator. Pourhassan unveiled that each indication of disease seems to have its own special protocol for administering the drug. These methods of administration seem powerful enough that they are in the process of patenting them. After the initial work with IncellDx, biomarker data has taken a serious back seat to clinical data. To many it may be obvious that the last CMO was not really effective and dropped a lot of balls that Recknor is juggling with now. Dr. Kelly said “we’ve done more in the past 3 months than what was done in years.” The fact that lab work is coming back is a net positive and bodes well for their upcoming FDA meetings. Recknor commented that their working relationship with the FDA has improved and the part of the BLA that caused the Refuse to File Letter has been completed and will be submitted on June 30th for the FDA’s comments.
In the webcast Pourhassan said the latest trial represented evidence that Leronlimab could be used as an immune modulator. He was excited because he knew they nailed the trial and it was a resounding success. Dr. Kelly explained they are doing a deep dive into the MOA and how the disease progresses and how leronlimab’s contribution to modulating the immune system also changes based on the stage of the disease or severity and also based on the different types of diseases from HIV to NASH.
Key Findings of Biomarkers in Long-Haulers
- Viral Toxicity is due to immune dysregulation & lingering cellular damage
- Auto antibodies are involved
- Other immune responses are driving the disease
- Role of neural inflammation
- Viral reservoirs and viral material
- Trial design for future trials
- Clinical symptoms improvement
- Imaging studies assessing progression
The study also collected blood samples of biomarkers such as serum cytokine and chemokine levels, CD4 and CD8 T cell count, TGF beta1, CRP, CCR5 receptor occupancy to correlate changes in biomarkers with symptom resolution and/or progression. The company indicated that results would be announced.
The key takeaway is that Dr. Kelly was also getting academia involved. That is what is needed for a BTD in cancer. This is why that pre BTD meeting keeps getting postponed. The FDA will want academia to weigh in and according to Dr Kelley it looks like they are coming on board soon. He said
“I think we crossed the bridge in terms of bringing in some major academic institutions that will give us a lot of credibility in pursuing our oncology indications.”
This newfound passion for lab data formerly expressed only by Bruce Patterson seems to be a renaissance for the company. They are taking the lessons they learned in Long-Haulers and applying it to these other diseases like NASH and cancer which would bolster their case to the FDA. They seem to want to understand interaction of the chemokines at a cellular level. One of the interesting findings of the Long-Hauler study was the examination of the fatigue side effect. In ALL cases fatigue in the placebo group got worse while in the leronlimab group patients got better or stayed the same but none regressed.
Breakthrough Therapy Designation
The company announced its intention to seek a Breakthrough Therapy Designation (BTD) in Long-Haulers which is clearly an unmet medical need that measures in the millions in just the United States. There is an article on Breakthrough Therapy Designations that places the value of just one BTD at $8.3 Billion. There is a very strong case that CYDY could be up for 2 and possibly 3 after the NASH data to be released toward the end of the year.
There could be a BTD in cancer with metastatic Triple Negative Breast Cancer (mTNBC) and a BTD in Long-Haulers. For months the company has been pushing for a Pre BTD meeting in the hope that they form the basis of a protocol that can accelerate development. In a similar indication for 3rd line mTNBC Immunomedics was bought for $21.0 billion. A BTD in this indication would be highly rewarding .
Recknor was credited by Pourhassan for “getting cancer back on track” after the company spent a year not recruiting even one additional patient. This probably means that Recknor was able to recruit enough patients to satisfy the FDA requirements for a BTD. CytoDyn indicated they could have TNBC results in 4-6 months. Given that there are more patients in the TNBC trial the meeting with the FDA is more likely to happen because the first clinical results were so amazing the next couple of patients could fail and the FDA would still want to meet based on the first one alone, but they needed more data to make a meeting.
Market for Long-Hauler Multiples of COVID-19
Investors should be forewarned that had CytoDyn announced the headline number from these results it would have garnered the same response as the 82% reduction in 14 day mortality from the CD-12 trial and capture the outrage that the drug hasn’t been approved. On the webinar Dr Kelly went through the calculations using a starting number of 180 million COVID-19 cases worldwide which would translate into 20 – 60 million people without effective options. He also mentioned that there are currently 2.5 million people in America with Chronic Fatigue Syndrome which could add to CytoDyn’s total addressable market.
Approval of this one indication in Long-Haulers could swallow up CytoDyn’s annual production of leronlimab. In comparison, severe hospitalized COVID-19 patients peaked at over 100K monthly yet the market cap of CytoDyn on speculation that it was going to address the severe COVID-19 population was closer to $5.0 billion. The Long-Haulers indication is clearly a big boost for the company and has a much bigger patient population, requires more leronlimab to be administered, and has greater revenue potential since there are no competing drugs in the space.
BLA Filing Timeline
One of the biggest factors in the stock’s poor performance this year traces its roots to the Refuse to File Letter announcement about a year ago. Last year the job to file the BLA was given to Mahboob Rahman who joined as the Chief Science Officer. The BLA filing timeline kept getting pushed out further and further. Little was accomplished during his tenure until he was eventually replaced by Dr. Chris Recknor who was actually a leronlimab patient and extremely motivated to see leronlimab in the clinic. Recknor was appointed in March 2021 and has apparently spent the last 3 months mapping out the BLA filing in great detail. During the webinar the company unveiled a very reasonable BLA filing strategy that should restore investor confidence damaged by Dr. Rahman’s inability to perform.
It’s reasonable that investors will now use this timeline as a yardstick to measure CytoDyn’s credibility. Based on the market reaction to the webinar CytoDyn has become a show me stock which means investors will more than likely be buying stock as milestones are achieved instead of buying into the news. In technical terms the stock action around these dates should behave like relief rallies. Should the company meet or exceed the BLA filing timeline investor behavior may shift. If this timeline is kept investors could be looking at a PDUFA date in Q1 2022 which is about 9 months from now. The stock price is extremely depressed sitting at a $1.0 billion valuation when an approval in Q1 next year could bring in $3.5 billion in revenues which is a fraction of revenues.
Brazil and India Clinical Trials
The discussion during the webinar focused on Brazil and the clinical trial development. CytoDyn’s new partner is an Academic Research Organization (ARO) called Albert Einstein Israelite Hospital (AEIH) which is located in São Paulo, Brazil. AEIH has already done 7 clinical trials and is very experienced in COVID-19. This ARO also has the ability to expedite the clinical trial for a fee and CYDY has paid top dollar to engage them at their highest level of service. This expedited contract will apply to both the severe and critical COVID-19 clinical trials. So far CytoDyn has been very pleased with the level of communication from AEIH and they have multiple updates weekly. Pourhassan also hinted that a Long-Hauler study in Brazil was a distinct possibility. AEIH estimates it will take 2 to 2.5 months to complete the 2 trials. ANVISA is the governing regulatory body in Brazil and delays are expected to be cleared “soon” according to Pourhassan allowing for the first First patient in Brazil to be injected by the end of July.
The real takeaway is that quick enrollment creates an opportunity for revenue in Brazil before the end of the year. In regards to other revenues Pourhassan did point out that the “the Philippines is still going forward,” but did not expand upon what was expected to happen. The Brazilian trials will have an interim analysis which means there is a strong likelihood of some interim trial results in August which places the final readout in October should they get quick enrollment. This means that quick enrollment in Brazil could really restore confidence in CYDY.
CYDY had been on a go it alone strategy for well over a year so the unwinding of the distribution deal with American Regent is significant. They were CytoDyn’s partner for COVID-19. Pourhassan was asked
“Why did the US distribution partner end the contract? We ended it – the contract with them, we believe a contract with big pharma could happen this year and if we don’t have any pending contract like that is the best path for the company.”
The company was also asked about their pursuit of NIH funding for Long-Haulers. Pourhassan was quick to explain that the NIH pathway was too slow and Long-Haulers was too important for shareholders. Strategically management thought it was better to get much stronger data so that they could partner more easily. They also felt that they could go back to the NIH at any time, but for the time being it was more important to move quickly. Since CYDY is the first readout in Long-Haulers with efficacy, partnering is more likely for big pharma looking to get a platform drug that fills holes in their pipeline with either cancer or NASH.
Long term investors in CYDY are anxious because there is a perception that management is jumping all over the place. They also whole heartily think that the FDA is penalizing the company and is going to continue to treat them unfairly. The thing that isn’t resonating with long term investors is that management is very quickly adapting its strategy to the evolving COVID-19 landscape. They saw how the vaccine was drying up the pool of severe COVID-19 patients and moved operations to Brazil and India to run the clinical trials. They had to deal with an FDA that was intent on more data and it appears they finally got a trial design with 4 doses that is unlikely to fail.
Investors are well aware that leronlimab works when they hear that some HIV patients have taken it for close to 7 years. They understand the successes in the cancer trials, the subgroups of COVID-19, and now the new Long-Hauler data. Investors appear to be playing a waiting game that restores their confidence that management is able to close on new business.
A couple of weeks ago the Philippines represented a good shot at getting a Purchase Order which would enable CYDY to file an 8-K for revenue which leads to many more downstream opportunities including a NASDAQ uplisting. The webinar dismissed the notion of meaningful revenue in the near future and reset expectations. This has created a washout in the shares as the shorts hammer away. Investors have decided to listen to all the noise surrounding CytoDyn instead of the chirping birds and the amazing data that was just released for Long-Haulers. A 190% decrease in symptoms in one of the newest and largest unmet medical needs is an extremely positive outcome that has fallen on deaf investors ears.
Investor sentiment is just plain wrong, but that should correct itself in short order. Here’s why. The whole tone of the Company seems to be setting up for an epic run driven by news after news starting with the dose justification on June 30th which has been delayed for months. This really looks like an elaborate rope a dope scenario where leronlimab starts coming out swinging with positive announcement after positive announcement. The foundation is built and it’s a solid just look at the last data set. No one, not even the shorts believe the drug doesn’t work. At issue is whether or not CytoDyn can advance the clinical trial. In about a week many investors will find out. This week could represent an incredible buying opportunity for the investor that understands it’s not if the drug is approved but when. It’s not a matter of one drug approval but a matter of many drug approvals in many countries. It’s always darkest before dawn and there is blood in the streets. Fears of the FDA and management are a figment of the shorts imagination. This is an ideal time to step into CYDY with only a week left to go before the 4th of July rebirth of the company.
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