CytoDyn Inc.: Understanding Leronlimab

 

Investment Thesis:

CytoDyn (OTCQB:CYDY) has the very promising large molecule (biologic) Leronlimab in Phase 1-3 for various indications including HIV, Cancer, and Immunology (Covid-19). The stock has been a battleground between bullish and bearish views. Recent setbacks in use for Covid-19 helped to fuel negative perceptions but I believe this was the logical attempt by regulators to find an effective therapy and the company to further its progress in case it proved effective for Covid-19. It does appear that Leronlimab is a therapy that will prove effective in treatment of one or more disease states.

The treatment of HIV appears to be where the most clinical progress has been made in the US and internationally and a large potential market exists. In my view, the company is relatively high risk even for a clinical stage biotech company for a few reasons including: approval needed for indication, strong and entrenched competition within the HIV treatment space, and a current valuation that reflects some of the potential of Leronlimab. That said there is large potential for positive investment outcomes if Leronlimab is approved and is acquired or can compete effectively against current standards of care dominated by Gilead (GILD) and Viiv Healthcare, a joint venture between Pfizer (PFE), GlaxoSmithKline (GSK) and Shionogi (OTCPK:SGIOY).

There is also the possibility that indications are expanded into cancer or immunology which could prove to be very beneficial to patients, the company and investors. My focus will be on HIV as a grounding point. The company is currently traded on the US OTC market and tradeable options for limiting risk are not available. I recommend that the risk-tolerant investor add CytoDyn to their portfolio for upside potential but manage position size carefully to minimize risk.

CytoDyn Inc.

CytoDyn Inc. is a clinical stage biotechnology company that is focused on developing and commercializing large molecules (biologics) for human use. Its lead product is Leronlimab (PRO 140), an anti-viral agent that has shown strong promise in the treatment of HIV. The company has a history dating back to 2002 and at some point, was almost insolvent. CytoDyn is headed by Nader Z. Pourhassan, Ph.D. who is a mechanical engineer by training but was important in the acquisition of Leronlimab which has changed the potential fortunes of the company. The company is based in Vancouver, Washington.

What is Leronlimab

Leronlimab is a large molecule (biologic) monoclonal antibody that targets CCR5 receptors which are thought to be important in the viral spread of HIV within the body. CCCR5 deficiency (lack of CCR5) is believed to have resulted in the only 2 cases of HIV “cure” in the world via gene transplantation. Leronlimab is a self-administered subcutaneous injection (not tablet, capsule). As a biologic, it is not generated from chemicals like many “small molecule” products but rather from the growth of proteins from living cells that create the same substance that exist naturally in the human body. If CytoDyn gets Biologic License Approval “BLA” from the FDA, its trade name will be Vyrologix™.

Patient Need:

HIV (human immunodeficient virus) harms your immune system by destroying a type of white blood cell that helps your body fight infection. AIDS (Acquired Immune Deficiency Syndrome) is the final stage of HIV, not all people who have HIV get AIDS. According to the World Health Organization, there are an estimated 38 million people worldwide that have acquired HIV. Unlike many years ago, the current prognosis for HIV is actually pretty good. Antiretroviral medications therapies or “ART” mean that HIV can be managed and that “viral load” levels can be suppressed to reduce the risk of spreading HIV to others. That said there are complications and drawbacks with the current ART regimens that patients undertake.

Limitations of Existing Therapies

Some of the key limitations as I see it can be listed as follows:

• Drug resistance to one or more of the ART or HAART (highly active antiretroviral therapy) is reportedly common and an important factor for patients.
• Adverse reactions or loss of therapy effectiveness due to drug interaction with other drugs taken by the patient.
• Risk of liver damage/impairment particularly with patients that also have Hepatitis.
• Immune Reconstitution Syndrome whereby your body generates a strong autoimmune response when you begin ART therapy. This can make your condition worse at least temporarily.
• Dosing regimen and patient adherence. Typically, patients required to take one or more tablets daily for life. This appears to be less of a drawback than in the past as there are one tablet options available rather than multi-drug cocktails.

I've linked the package insert for Gilead Sciences' product Biktarvy which describes risks associated with drug resistance, liver damage and Immune Reconstitution Syndrome for reference.

Potential Benefits of Leronlimab

Some of the benefits as outlined by CytoDyn are as follows:

• According to CytoDyn, there have been no drug resistance generated in over 800 patients in the last 4 years. This makes sense as Leronlimab is a biologic generated from living cells and meant to mimic your body's natural function and not a chemically-derived drug as are most current therapies.
• No serious adverse events during their clinical trials.
• Leronlimab appears to not have high liver toxicity associated with ART/HAART therapies and if confirmed risk of renal impairment is greatly diminished.
• Leronlimab is currently designed to be injected once a week. This in theory makes compliance easier as it is not a daily tablet. I’ll note that a once-a-day tablet such as the Gilead product BIKTARVY does not seem onerous in my opinion and some patients do not like needle injection.

Potential Drawbacks of Leronlimab

• The main issue I see at this point with Leronlimab is that it is currently designed to be a combination therapy with other existing therapies. This does not provide additional patient compliance ease but adds another step to their therapy. It is currently designated for patients who are facing drug resistance.
• There is discussion that the FDA may look at Leronlimab as a monotherapy for HIV which would be very positive as it would not be part of a larger regimen to treat HIV for patients.
• Some patients will not like self-injection.

• In summary, it does appear that Leronlimab can provide HIV patients with significant benefit. In my view, the key positive attributes are that the risk of developed or acquired drug resistance appears to be low and liver toxicity for Leronlimab appears to be better than existing therapies. If Leronlimab was approved as a monotherapy (sole therapy needed) for HIV, I believe this would also be a significant benefit. That said current products on the market do appear to be effective in limiting viral load for HIV and most no longer require a multi-dose “cocktail” regimen. Less than daily dose administration is a benefit as well, but some patients will be averse to self-injection.

  Clinical Status

• Leronlimab currently has several ongoing trials for several indications including cancer and immunology. 

•  CytoDyn has on-going studies for a wide range of indications. The company provided a comprehensive virtual update on its pipeline on December 10, 2020.

  From my perspective at this point, the most important non-HIV updates are the start of a Phase 2 clinical trial for Leronlimab for treatment of non-alcoholic steatohepatitis "NASH" and continued patient recruitment progress on a Phase 3 clinical trial for treatment of mild to moderate respiratory symptoms of respiratory disease caused by Covid-19 (so-called “Long Haul Covid-19”).

  CytoDyn has indicated that Leronlimab may be approved for Covid-19 in the Philippines in the near term (as early as January 2021) and this would be significant.

• Cancer and Immunology are potentially large market indications with patient need so future progress on these would be very welcome by CytoDyn investors.

• https://seekingalpha.com/article/4395017-cytodyn-inc-understanding-leronlimab-and-hiv