CytoDyn (OTCMKTS: CYDY) Accelerates Recruitment to 250 Patients in Pivotal COVID-19 Trial

CytoDyn Inc. (OTCMKTS:CYDY) on a conference call yesterday revealed that approximately 250 patients have been recruited in their CD12 severe to critical COVID-19 trial. Their pathway to approval requires them to enroll only 43 additional patients against the backdrop of 120,000 new daily infections. Recruiting critical patients during this pandemic would seem like an easy task, but big pharma’s presence and easy to sign up procedures seem to command priority recommendations with the physicians and CytoDyn’s non-toxic drug leronlimab was not in the conversation. Over the past 9 days, CytoDyn’s new recruitment consultant Brian Brothen seemed to be able to change the narrative in a major way. CytoDyn appears to be closer than ever to being the next therapeutic up for approval in COVID-19.

Top Therapeutic Recommendations

The top clinical trials for therapeutics in order of recommended use by clinicians seemed to go to remdesivir, REGN-COV, and LY-CoV55 in that order. Gilead Science’s (NASDAQ: GILD) surprise FDA approval of remdesivir as the first COVID-19 treatment has actually improved CytoDyn’s recruitment of severe patients. CytoDyn no longer had to compete with a household name made famous by President Trump in a clinical trial. There was much fanfare after Trump used Regeneron’s (NASDAQ: REGN) neutralizing antibody cocktail, but that gave way to the reality that it didn’t work in late stage patients dying of the cytokine storm. On October 7th Regeneron filed for an Emergency Use Authorization (EUA) galvanizing physicians support only to have it’s support crumble less than 30 days later after the Drug Safety Monitoring Board (DSMB) recommended stopping enrollment in hospitalized COVID-19 patients. On the same day as Regneron, Eli Lilly filed an EUA for its therapeutic, but was quickly rejected for safety concerts a week later. October was an impossible month for CytoDyn, or for that matter any other small biotech to recruit patients due to big pharma’s top 3 therapeutic options which monopolized the narrative for physicians.

The Pitch

In a pandemic environment, doctors treating COVID-19 patients prefer simple yet effective treatments. Brian Brothen’s job is to point out to frontline doctors how easy it is to administer leronlimab over other therapies that require extensive monitoring and extended hospitalization. Another selling point is the streamlined data capture which reduces the overall staffing needed to support the study. The crux of the matter for physicians is that leronlimab reduces the incidence of Severe Adverse Events (SAEs) by 60%. Brothen’s goal is to help front line doctors considering experimental treatment see that leronlimab is the superior option to try. In addition, his job is to smooth out any problems onsite that may be affecting patient enrollment. In the physicians decision making process he wants leronlimab at the top of the list and not the 4th, 5th or 6th option.

Campaigning for Leronlimab

The void of big pharma therapeutic options has really left the door wide open for CytoDyn to capitalize on expanding its patient recruitment. A patient recruiting consultant by the name of Brian Brothen with over 25 years of experience was brought in by Dr Scott Kelly to accelerate enrollment. Dr. Kelly was quick to point out in the conference call that his aggressive plan of increasing enrollment seems to be working. Brian was quick to hit the campaign trail and in the past 9 days, 11 more patients were recruited over what appears to be 3 sites. Conservatively speaking, Brian seems to be getting 1 patient every three days from each site. There are a total of 15 active sites and on this call, they announced that Tampa was coming onboard. He has 12 sites to go on his road trip and is expected to cover them over the next 3 weeks. Simple math allows investors to predict patient recruitment in the coming weeks. The original 3 recruiting sites might yield an additional 9 patients along with 12 new patients from 4 more site visits and then an additional 21 along with 12 new patients. This total equates to 54 patients in the next 18 days assuming a very conservative rate of patient recruitment. The company only needs 43 patients to reach its next interim readout which could come as soon as November 20, 2020. CytoDyn has set a high bar and expects Brian to visit Tampa, Houston, Dallas, New Jersey, New York, and Boston before November 11th.

MHRA Recruiting Sites - Pivotal Catalyst

For the past couple of weeks CytoDyn has been patiently waiting for the United Kingdom to start recruiting patients in its severe to critical trial. On yesterday’s conference call the Company explained that the regulators were taking steps to normalize the protocol with their CRO, Amerax. The CEO, Nader Pourhassan said that they would

“Hopefully announce enrollment very soon.”

Should these sites in the UK start recruiting patients, it would have a dramatic impact on the enrollment. Brian Brothen was tasked with accelerating recruitment, but if MHRA sites start recruiting it could very well complete the trial very quickly. This is a key catalyst to looking forward.

Fundraising, OWS, and NASDAQ Uplisting

The company is constantly fundraising, but continues to avoid dilution at all costs. Its last two rounds of financing were above market deals at $4.50 and $10.00 in the amount of $40 million. CytoDyn has a sizable number of warrants that are in the money, and have not been exercised. Pourhassan made a plea for the warrant holders to exercise their warrants. If there was to be another financing deal it's reasonable that the deal would be on terms similar to the last deal. A big revelation during the call was that Operation Warp Speed (OWS) is in discussion with their team and seems ready to move in parallel with the FDA. The trigger for their involvement seems to be linked to a EUA. They are not the only major source of funding. Dr Pourhassan indicated that other sources of funding could come from a “billionaire” benevolent to the cause of getting a therapeutic to market. The NASDAQ uplisting is still in play. The CFO confirmed that their uplisting has not been denied and could happen if their stock rises above $4.00. The uplisting seems to be tied to whether or not the company is able to secure marketing approval.

Quick Pathways to Approval

The MHRA gave CytoDyn the green light to file their BLA but many investors have failed to grasp the sheer magnitude of this statement and what is behind it. The BLA is a couple hundred thousand page document. This isn't something that is quickly changed in MS Word and then gets printed out because BLA’s could be up to 200,000 pages. The good news is that CydoDyn had been working on a version for about 2 years before this meeting and it is essentially in the same format and acceptable to the UK. Dr Mahboob is on the team finalizing the BLA for submission. The company is also working to secure a UK distribution deal. After the BLA is submitted most investors fail to realize that the MHRA only takes about 2 weeks to review the package to get the USA equivalent of a PDUFA date. rs it feels like the FDA is sitting on their hands with respect to an EUA. A very crucial announcement was made during the call. Nader said

“The FDA firewall statistician has received the unblinded data and was not told to stop the trial”

Also mentioned in the call was a meeting with the Canadian FDA. It's widely expected that they too will give CytoDyn the green light.

Upcoming Catalysts

• MHRA HIV BLA approval - off label use could allow COVID-19 patients and cancer patients to get the drug in the UK
• Long Hauler's study led by Dr Chris Rectnor - the final protocol modifying the endpoints should be submitted to the FDA next week
• 2 patients for cure study died - searching for new patients

• Receptor occupancy could take 4 months

Investment Summary

Investor’s have been waiting for months for an approval but it never seems to materialize. The company finished its mild to moderate CD10 trial and it was the first drug to score statistical relevance in a COVID-19 trial yet the FDA was against issuing an EUA. The latest move by the DSMB indicated that leronlimab was tracking to meet its primary endpoint of 28 day all cause mortality. This is only pivotal stage clinical trial with mortality as an endpoint. A reduction in mortality is the gold standard in clinical trials. Many investors are fatigued and thinking what is it going to take? The CEO has clearly telegraphed a lot of news is about to break in the near future but investors have their eyes fixated on an EUA. An EUA is a big deal but the FDA made it clear that they could make a ruling on that as soon as the next interim readout at 75% enrollment. The proper perspective for investors is that quick enrollment could lead to quick approval. There seems to be a very strong case that enrollment is going to skyrocket in the near future. If that is in fact the case then shareholders should be gobbling up shares at these discounted levels. It seems very clear that an approval is just around the corner and could come from the MHRA or the Americans.

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