CytoDyn Inc (OTCMKTS:CYDY) just announced that it has made a number of key modifications to its planned phase III protocol, and that management will host a call to discuss the modifications at market close on Tuesday. Markets look to have not yet acted on the news – likely as a result of many waiting for the call to take place and for the company to serve up some clarification on the implications of the alterations. We're going to sit in on the call to pick up some insight, but ahead of it taking place, we think there's an opportunity to get in ahead of the crowd.Here’s what's important.The trial in question is a planned pivotal for CytoDyn's lead candidate, PRO-140. The company picked up the drug from Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) back in 2012, and it's part of a family of new HIV target treatments called viral entry inhibitors. The MOA for these type of drugs is exactly how it sounds – it stops the HIV virus from entering T cells. PRO-140 targets a receptor called CCR5. HIV uses this receptor to enter T cells. PRO-140 attaches to it and masks it from the virus.It's a development stage approach, but trials to date have served up some strong evidence of efficacy. A phase IIb extension study, which represents the latest of the available data, kicked off on the back of a phase IIb. The phase IIb enrolled 40 patients, and to whittle this down to the most promising, with the goal of carrying these most promising candidates through to the above mentioned extension. Of the 40, 35 were classed as evaluable, and 20 of these completed the 12-week viral load suppression period and became eligible for the extension. Fifteen of these 20 carried forward into the extension. Four of these 15 were disqualified (for reasons not related to the drug) and one was a treatment failure, so the extension ended up with 10 evaluables. One of these just reached a full two years of viral load suppression (the holy grail in this sort of therapy) and the remaining patients are all approaching this period.So what's the deal with the protocol changes?Well, initially, the company had planned to enroll 150 patients and the endpoint relating to viral load reduction is altered from a viral load of 0.7log to viral load of 0.5log. Both of these changes are going to make a massive difference to the drug's prospects – if not from a chances of approval perspective (although the endpoint easing is going to improve these chances a bit) then from a time to approval perspective.This later point is important for a couple of reasons, but the one we see as being the biggest upside is cost. CytoDyn has been relying on dilutive raises for the last twenty-four months or so, as a source of funds for its development of PRO-140. A $10 million RDO just reinforced the cash on hand position, but a 150 patient pivotal would likely have cost two or three times this number to complete, and would also likely not have wrapped up until late 2017, early 2018.The 80% patient enrollment reduction will have a similar percentage impact on the company's trial completion costs, and this will reduce the dilution shareholders have to endure near term, ahead of any FDA approval. Management expects that the trial could readout on the primary as soon as first quarter 2017, bringing the catalyst from long term to very near term.So, as mentioned, management is going to get on a call and discuss the reasons/implications of this in a little more detail at market close on Tuesday. While we are unsure of the reasoning behind the alterations, the chances that they are going to negatively impact CytoDyn are slim, and we think that there's some upside potential if the company can confirm the above discussed cost and time implications. The company is flat ahead of the call, making it an attractive vent driven entry right now.Subscribe below and we'll make sure we keep you updated as CytoDyn offers more insight into the state of its trial, and its lead candidate going forward!Disclosure: We have no position in CYDY and have not been compensated for this article.
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