“It’s really a crime to see something that’s this effective not being mentioned in more detail” – Dr. Bruce Patterson
When a company like CytoDyn comes out with excellent news day after day and has the potential to be the next best thing in coronavirus treatments in the near term and no one pays attention, blame is going to fall squarely on the shorts. It was evident last Friday at the height of coronavirus fears when the company announced an investor conference call update headline with a seemingly endless supply of positive news forthcoming. After the announcement hit the wire investors started piling on to buy it then the rally ran into a brick wall and started going lower again. The headline highlighted the Phase 2 trial for COVID-19, BLA update, BTD, Basket trial filing, and licensing opportunities. It was clear that this was going to be a very positive update. The conference call delivered but the reaction is still tepid as the bulls and the bears are duking it out. Right now the shorts can still cling to the hope that CytoDyn hasn’t filed their BLA yet and will not complete the filing until the end of March, but investors are also to blame or asleep at the switch here because in by the beginning of the month the FDA could come through with a Breakthrough Therapy Designation (BTD) approval worth billions of dollars.
Recapping the Update Call
The company finally named the drug. Leronlimab is now called Vyralogix. Bruce Patterson their lead consultant came on to explain the mechanism of action. The play by play was in the conference call but Dr Patterson gave one of the clearest explanations of why leronlimab was going to work for the coronavirus. It’s important to note that Dr. Patterson was spot on with his prediction regarding metastatic cancer and now the company has close to five back to back cancer patients with zero Circulating Tumor Cells (CTCs). The company is expected to have an answer on BTD within the next 30 days in Metastatic Breast Cancer (MBC). This could represent a monumental shift in the trajectory of the company.
The company is also working closely with the Chinese, Taiwan, and South Korean’s on licensing the product that would come with immediate sales. The company indicated they had 24,000 doses available to ship and that it could be spoken for by 2 different entities. A definitive deal could come as soon as next week that should involve the actual purchase of product. Any of these deals would result in the injection of patients within days or weeks. If the mechanism of action behind this drug is accurate it means that an expected response would be in days to a week after injection. This news could reverberate around the world and push the FDA to signal a green light for trials to begin. There are also hospitals with coronavirus patients piling up in the USA and they want to try something and that could put pressure on the FDA to act because the evidence is overwhelming that the drug is safe and people do in fact have a right to try.
CytoDyn also broke the news on the call that they started their trial for Graft versus Host Disease (GvHD). The bar here for success is very low with respect to the number of patients needed. Their initial plan is to dose 5 patients. If those 5 patients do no contract GvHD within 6 months that would be considered a successful trial. Although this would be considered an orphan drug indication it is worth billions. The implication however is vast, because this opens the door for the testing of anti-rejection medicines for organ transplantation. This would be an even larger market than GvHD. A lot of focus has been on cancer but GvHD and NASH are some very big wild cards that could see licensing potential.
Uplisting and funding was also a major topic covered. The company is entertaining multiple offers
and gave a flavor that they have offers as low as $25 million and it ranges as
high as $100 million and could go higher with syndication. They are trying to balance between pledging
the IP as collateral and getting as much money as they can. They are in the process of negotiating terms
but they also have to consider the potential sales that could bring in funding
from the sales of leronlimab to the Chinese, Taiwanese, or South Koreans.
Doctors and Researchers Paying Attention
There is a meeting of oncologist happening on March 19th in San Francisco with oncologists and other stakeholders who have been part of the process so far to share experiences and raise awareness of this drug within their oncology community. These oncologists are seeing results that have never been seen in cancer before and they are in the “pinch me is this real” stage. Dr. Patterson is also expected to educate everyone on the mechanism of action of how the drug works. They are also planning on sharing patient experiences with each other.
Patients Making Accolades
The cancer patients impacted by the use of this drug are not staying quiet. They want to speak out and it looks like their testimonials are forthcoming. Due to scheduling and the required FDA permissions the testimonials were delayed. The company has the testimonials and will make that public in the near future. The continuous patient updates are showing no signs of cracking their trend at reducing CTC’s. In fact more are coming in the next couple weeks. These updates should continue to reinforce that the drug is working. Major oncologist with well-respected reputations have concluded that this is a paradigm changing drug and so have the cancer patients injected with the drug. The only one’s not convinced are investors and if history serves as a guide fundamentals always win in the end.
Conclusion
Whether or not you believe there are nefarious forces at work keeping the price of CytoDyn down it doesn’t excuse the long term investor’s responsibility to tell others about the potential of this platform technology. There has been a real disconnect as investor’s focus on everything in the periphery instead of what is right in front of them. The drug clearly works in cancer and HIV and is an absolute game changer in both. The cancer patients have ZERO CTC’s which is a feat that was never accomplished let alone ever attempted in a clinical trial because the bar is so high. For approval as a surrogate endpoint CytoDyn simple needs to get and sustain CTC’s under 5 for a period of time. The first patient is just shy of 6 months progression free survival and all the patients dosed quickly head to zero CTC’s. This is clearly not a fluke since the theory and animal studies predicted such success. This appears to be a show me market, but for those investors with a little imagination that this is a generational paradigm changing drug like Humira they could be richly rewarded should the company execute on just a portion of its plans. Setting aside all the hype regarding COVID-19 if this drug performs at just a fraction of what is expected in clinical trials overseas the stock could be in for a monumental run.
