CytoDyn’s Preliminary Phase 1b/2 Cancer Results Likely to Receive Breakthrough Therapy Designation (BTD)

CytoDyn Inc. (OTCMKTS: CYDY) announced excellent preliminary results from its Phase 1b/2 clinical trial in metastatic triple negative breast cancer (mTNBC) that were well beyond the parameters needed to achieve ultimate approval if looking at historical controls. They had a 450% increase in overall survival (OS) at the 12 month point. Since this was a Phase 1a/2 study which has no control so this increase in OS is calculated off of a historical control. However, when Phase 1b/2 studies are this strong in a disease with an unmet medical need the company will typically apply for breakthrough therapy designation (BTD). The challenge for the company in communicating that message was that they already announced that they applied in January of 2020. This is probably why the headline announcement had such qualifying language. The result of that filing for the BTD was feedback from the FDA in mid-2020 that the company should send them more data for consideration.

“CytoDyn will seek FDA guidance on proceeding with an expedited regulatory plan for approval of leronlimab with existing FDA Fast Track designation for mTNBC”

This headline was written by an attorney to accommodate the fact that they already filed for a BTD, and since it was never rejected it remained officially open. This would make a headline that they plan to file a BTD technically inaccurate. Since they are already fast tracked the only expedited approval higher is a BTD. So the language they used was just a clever way of saying BTD without upsetting the FDA. So they are essentially repackaging these results for the FDA to have a fresh look at their data. The next step in the process after the FDA reviews the data is for the FDA to rule on the designation and provide guidance for continuing the trial or an approval.

Trial Design

There’s a little bit of an apples-to-oranges comparison, though Trodelvy’s inclusion criteria specified mTNBC patients with exposure to at least two systemic chemotherapies (3rd line treatment), but also included those with unresectable locally recurrent cancer, as opposed to purely the more aggressive, metastatic tumors that CytoDyn’s leronlimab included. CytoDyn treated first-line patients, which means that they might have disease potentially less resistant to chemotherapy, but this also opens up a much larger market for CytoDyn. Additionally, CytoDyn did enroll patients exposed to chemo as chemo was used as an adjuvant or neoadjuvant (after or before surgery). So, the cancers must have been somewhat resistant to chemo already. Lastly, CytoDyn did not exclude patients with brain metastases if they were stable (treated or untreated), whereas Trodelvy’s phase 3 trial did.CytoDyn stated that the patients similar to those enrolled in its trial typically have a mPFS of about 2 months, whereas a review of first-line mTNBC treated patients in the “real world” showed that the mPFS was 4.2 months. So, there might be a difference in the patient baseline characteristics that we cannot see, since CytoDyn stated 2 months as the typical mPFS. Either way, this represents an improvement over standard first-line therapy.Since the true composition of patients is unknown, it gives rise to speculation in the other extreme, that 21 patients were compassionate use which means that they weren’t recruited in the phase 2 or the basket trial. If that was the case, then, this data is going to cause a stir around the world as being a game changer in cancer. Compassionate Use patients typically have a greater than 50% chance of death and in cancer that outcome is expected in the coming days to weeks. If this group of patients responded after just one dose it's unfathomable that the FDA would not respond in a decisive fashion issuing a BTD.The bottom line is that this therapy appears to work and it could be a very important first-line, well tolerated drug in the arsenal to combat mTNBC. Median overall survival (mOS) for this group tends to be 8-13 months even with multiple therapies administered, and CytoDyn is sitting at least 12 months at its interim readout. This just demonstrates yet another approvable endpoint.

Breakthrough Therapy Designation (BTD)

CytoDyn has been working on this BTD since January 2020. There are many things that they learned about the FDA over this interim. The most important lesson is that the FDA is data driven. So they knew that completing Phase 1b might not be enough evidence to tilt the scales in their favor for a BTD filing. The company however did indicate that 2 out of 9 were “responders” but that was not defined. CytoDyn also knew that they needed a higher dosage of the drug and at these higher dose levels the data would be compelling. This meant completion of at least the phase 1b portion of the trial that they just announced. They also needed patients at this higher level as well.What is unclear at this point is how far along they have progressed in recruiting in their Phase 2 and whether these mTNBC patients remain in treatment and which trial these patients are from. The facts are that 9 patients were dosed in the Phase 1b escalation trial and that there were no safety signals. The other 21 patients could be from the compassionate use trial or the basket trial or even the Phase 2 study. The other morsels of information in the latest press release are setting the stage for impressive measures of efficacy and a possibility of determining responders before treatment. Here is the key smoking gun quote from CytoDyn

"The fact that greater than 70% of patients saw positive changes in circulating tumor cells after a single dose of leronlimab was made even more informative by their dramatic increases in both progression-free survival and overall survival. The fact that a large group of patients taking leronlimab had an mPFS of approximately 6 months is well beyond that experienced with current treatment options available to these women, who typically have mPFS of approximately 2 months. This result is even more amazing as these women did not even reach mOS in 12 months, considering the typical mOS in this population is only 6 to 7 months."

Dissecting this quote we find Breakthrough Therapy Designation gold. From the headline title CytoDyn explained that after 4 doses 70% of these 30 ppl or 21 out of 30 got to CAML levels that are associated with a huge survival benefit over 4.5 times normal. They also mentioned that greater than 70% saw positive changes in the Circulating Tumor Cells (CTC’s) in just the first dose. Seeing movement in a major efficacy marker after just one dose makes a very strong argument that this is a disease modifying drug. Putting this into context a treatment potentially exists with an exceptional safety profile and makes the treatment at least 4 times better in just the first 4 doses. That begs the question: what would happen if they did it longer? The concept behind measuring CTC’s is that the number of tumor cells circulating in your system is correlated to long term survival. The less the tumor cell sheds cancer cells the better the prognosis. It's basically common sense. The CELL Search test below shows a 40% 5 year survival benefit if you get the CTC’s under 5. With ALL the patients at zero CTC’s it's hard to comprehend that the FDA would not agree that the drug is exhibiting a survival benefit with this biomarker alone.The other part of the quote talks about progression free survival. Progression Free Survival (PFS) is defined as the length of time during and after the treatment of a patient's cancer, that the cancer doesn't get worse. The company talked about median Progression Free Survival (mPFS). This is highlighted in yellow in the chart above. Leronlimab in comparison to Trodelvy is better. It's important to keep in mind that Trodelvey received a BTD in a similar indication and ultimately received approval.

Trodelvy Purchase for $21 Billion

In a side by side comparison it is clear that leronlimab is no worse than Trodelvy which was awarded a BTD. Since Trodelvy and leronlimab’s interim data have similar efficacy comparisons, it is reasonable to think that they should share the same pathway to approval which was a BTD. In a worst case approval scenario, leronlimab still maintains the edge compared to Trodelvy due to its superior safety profile. The more likely scenario factors in the preliminary data and leaves a lot of room for upside surprises on release of the full data set. Given that more upside surprises are likely it really puts the pressure on big pharma to act sooner versus later.Gilead Sciences (NASDAQ: GILD) justified the astronomical purchase of Immunomedics and Trodelvy for $21 billion based on the concept that it was a platform technology. Trodelvy and its mTNBC indication has a total available market of only 7,500 cancer patients annually. In essence this meant that GILD paid $2.8 million per patient, but yet only expected to recoup $25K in revenue per patient. At 100% market penetration the math works out to $187.5 million per year in revenue. Investors need to remember that Trodelvy is nothing more than targeted chemo that actually increases the side effects of chemo (See Chart Above). The price was set for a drug that works on multiple cancers which means the value is in the tens of billions for a drug with an impeccable safety profile and works on multiple indications of cancer.

Value of BTD

One of the most comprehensive research articles ever done on BTD pegs the value at $8.3 billion for an approval of a drug in a large indication. With the current number of shares sitting at 620 million a BTD approval for CYDY is ultimately worth $13.39 per share. What the market is failing to do is properly discount the value of that $13.39 per share. There is also a risk that CytoDyn gets a BTD in Long-Haulers or NASH. ALL THE MOUSE MODELS of leronlimabs efficacy have translated to human trials. So really the market should be digesting the probability of 2 BTD’s but it seems to be hung up on endogenous factors like the 13-D group and Stat News instead of the science which is screaming “THE DRUG WORKS!”

Criteria of a BTD Has Been Met

• Intended alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition
• Preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

Many investors that read this article may be skeptical that leronlimab with all its regulatory obstacles in multiple clinical trials would be able to pull off a BTD. So it's important to take out emotion and just look at the criteria. The trial meets the first criteria of treating a life-threatening disease. The point should be uncontested. The next criteria is “clinical evidence” the drug may demonstrate substantial improvement. The key to this is the definition of clinical evidence and this could be in a clinical trial setting or it could be in compassionate use patients. Animal trials results that reduced metastasis by 98% would not cut it. They saw 2 responders out of 9 in the Phase 1b so given the poor prognosis that represents 22% improvement, but it's unclear about the other 7 except that 70% of them had a reaction in the first dose. What is so interesting is the numbers are coincidently shaping up to 21 people responding on the first dose and it's assumed that the 21 people in the basket trial or the mTNBC trial got the 700mg dose. If that group was just stabilized that would be a medical miracle the FDA could not ignore. The FDA has recently awarded BTD to Takeda with a clinical trial size of only 28 patients. The final element is a “clinically significant endpoint.” According to ASCO that means a “two-fold” increase. The baseline response rate is 5% (Table Above), so a 2 fold increase is 15% and leronlimab had a 22% responders rate. Therefore leronlimab met all the criteria for BTD. On the next investor call scheduled for Thursday July 22, CytoDyn may go over what evidence they intend to present to the FDA.

Investment Summary

There is a mountain of evidence pointing to efficacy in cancer. This evidence was obtained in clinical trial settings. The evidence is not anecdotal and seems to be consistent on all types of cancers. The mechanism of action (MOA) and preclinical data all support the excellent clinical trial results. The results are better than GILD’s Trodelvy which was approved and also got a BTD with trial results on par with leronlimab. There are considerable potential upside revisions to the preliminary clinical data which seems to have been taken at the one month point (4 doses). A number of people in the study pushed median survival beyond a year and may go much further as clinical trial participants continue to respond to therapy. The safety of the drug used in cancer seems unimpeachable. The drug loudly meets the requirements of BTD. No matter how upset the FDA may or may not be, it cannot change the fact that the drug works. The only risk is that the FDA could ask for more data as they did in the CD12 trial, but that simply isn't realistic given the large number of patients in the study. Most of the time, CYDY goes down after the investor call, but if the stock doesn’t appreciate considerably in the next 2 trading days it may finally do the unthinkable. Investors may be instore for a massive short covering rally as investors get the dose of reality that the FDA relationship is in fact fine and that the interim results fit the goldilocks definition of a Breakthrough Therapy Designation.

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Disclosure: Insider Financial and its owners do not have a position in the stocks posted and have posted this article for free without editorial input. This article was written by a guest contributor and solely reflects his opinions.