CytoDyn (OTCMKTS: CYDY) Subtly Signals Pivot Into Philippines and Vaccine Market

On Sunday Night CytoDyn Inc. (OTCMKTS:CYDY) quietly placed a link in their developing news section to a 2016 medical journal article that showed that CCR5 antagonist enhances memory CD8 T-Cell immune response. This came after a quietly placed link on Friday Night to a press release that the President Rodrigo Duerta granted the Filipino FDA the power to allow emergency use of COVID-19 vaccines and treatments. They have a conference call on Thursday December 10th, 2020, and it's shaping up to be a game changer. It's unclear what each of these means separately, but when taken together it could be the making of a combination therapy or monotherapy for COVID-19 or both. After the investor conference call Thursday, the stock could be primed for a significant run should the company expand on either or both of these topics.

Philipine EUA Potential

In October CytoDyn announced the appointment of Chiral Pharma to secure leronlimab for local FDA approval in the Philippines. New Marketlink Pharmaceutical Corporation (NMPC) is the parent company of Chiral Pharma and has been in business over 14 years and is known for its distribution of specialty pharmaceuticals. In order to get approval in the Philippines a local sponsor and CRO is needed to secure a License to Operate (LTO). FDA Circular No. 2015-003 general guidelines indicate that

“no clinical trial of a foreign sponsor may be conducted in the country unless an FDA-licensed CRO takes up the responsibility for the foreign sponsor.”

It is reasonable to think that in the past two months Chiral Pharma has been able to secure the CRO and put the package together for Emergency Use Authorization (EUA). The Philippines is at great risk when considering the demographics and the prevalence of diabetes which is a significant co-morbidity in COVID-19. According to the International Journal of Infectious Diseases hypertension is the top comorbidity affecting 21.1% of the population followed by diabetes which represents 9.7% of COVID-19 deaths. In the Philippines 6.3% of the population or 3,993,300 people are stricken with the disease and this doesn't include the pre-diabetic patients.Duertes Executive Order 121 (EO 121) specifically states if the following three conditions are met a DRUG or vaccine shall be issued

• It is reasonable to believe that the drug or vaccine may be effective to prevent, diagnose or treat COVID-19;
• The known and potential benefits of the drug or vaccine when used to diagnose, prevent or treat COVID-19 outweigh the known and potential risks of the drug or vaccine if any; and
• There is no adequate, approved and available alternative to the drug or vaccine for diagnosing, preventing or treating COVID-19.

Leronlimab meets the test in all three areas. In its phase 2 readout leronlimab had clinically significant topline results in the reduction of the clinical symptom score and statistically significant results in lowering the NEWS2 score. While the United States FDA likely had an issue with the number of people enrolled in the study and the power of the results the data speaks volumes that it is reasonable to treat COVID-19. The safety profile of leronlimab was 60% better than the placebo group with respect to the reduction of SAE’s and passes with flying colors for safety.The final element is there is no alternative treatment in the Philippines. On April 2nd, early in the pandemic, the Philippines FDA approved Roche Holdings (OTCMKRS: RBBHY) drug tocilizumab and Abbvie (NASDAQ: ABBV) drug Kaletra (lopinavir/ritonavir). At the time these IL-6 inhibitors were thought to be the path forward but it was clearly evident by mid summer that tocilizumab and Kaletra failed their clinical trials. The Filipino FDA is eager to have a therapeutic and leronlimab looks like the ideal candidate with the correct backing. If history serves as a guide the FDA in the Philippines has a tendency to act first and ask questions later. There was the slimmest data set on these IL-6 inhibitors before an EUA was granted so with the most advanced therapeutic in the United States and the local Filipino presence the stage is set for a very quick EUA approval.

Vaccine Market Growing

The key Phase 3 players in the vaccine market Johnson & Johnson (NYSE: JNJ), Pfizer (NYSE: PFE), Novavax (NASDAQ: NVAX), Moderna (NASDAQ: MRNA) and AtraZeneca:(NYSE: AZN). According to Operation Warp Speed (OWS) mRNA-1273, AZD 1222, and BNT162 are the top candidates. The first vaccine approval was in the United Kingdom last week. Pfizer is expected to deliver its first dose this coming week and they plan to prioritize its distribution by giving it to nursing home residents, health care workers, and people over the age of 80. Both Pfizer and Moderna have applied for EUA’s in the United States and they are widely expected to obtain approval in the coming weeks.The vaccines do have side effects for a majority of the people inoculated. The second dose is the more pronounced, but all three of the top contenders have reported mild or moderate side effects like injection site pain, fatigue, aching muscles for a couple of days. Dr. William Schaffner has been quoted extensively, he said

"A sore arm and feeling crummy for a day or two is a lot better than COVID,"

Questionable Levels of Vaccine Immunity Create Opportunity

The long term durability of a vaccine is questionable because there hasn't been enough time to evaluate them properly. In the quest to get a vaccine to market quickly, the typical endpoints have been modified. The primary endpoint in the vaccine trials are sickness in the form of a cough that is validated with a COVID-19 test. With past vaccines the medical community was concerned with reducing the disease severity. Moderna is the only company keeping track of vaccinations that result in hospitalizations and that speaks volumes that the vaccine is designed to reduce the severity of the disease that is it. In fact, none of the vaccine makers can rule out that vaccinated subjects can carry the disease.

Sterilizing Immunity Possibility in Combination with Leronlimab

Some vaccines are designed to have incredible stopping power to the point whereby the virus is unable to replicate in a person. This is referred to as sterilizing immunity. The current vaccines require one or two shots which is a tell tale sign that the current vaccines are far from being a sterilizing vaccination. If they cannot give you immunity in the first dose it’s because the vaccine isn’t designed to generate a sterilizing response. These vaccinations appear to only help you to develop neutralizing antibodies that are designed to weigh down the virus while your body mounts an immune response.The journal article recently highlighted by CytoDyn was very relevant. It was titled “Temporary CXCR3 and CCR5 Antagonism Following Vaccination Enhances Memory CD8 T Cell Immune Responses” with a conclusion that a CCR5 inhibitor “could be a promising strategy to generate large numbers of protective CD8+ T-cells.” The mouse study evaluated Takeda’s investigational CCR5 inhibitor when taken with an influenza vaccination. The article explained the most promising vaccines with a goal of sterilizing immunity “augment both the number and function of memory CD8+ T-cells.” Blocking CCR5 essentially improved the quality and the quantity of CD8+ T-cells in the study. The quality was improved because the memory T-cells were able to change into IFN-gamma effectors cells on stimulation with an antigen. This means that when the virus invades the T-cells signal the adaptive and the innate immune response to eradicate the virus. Since leronlimab is also a CCR5 inhibitor, the theory suggests leronlimab would work the same way in the presence of a vaccine.

Adjuvant Therapy for All Vaccines

The major issue with the vaccines is creating this memory response fast enough. By co-administering leronlimab with the vaccine it would block CCR5 and force the production of high quality CD8+ T-Cells in sufficient numbers to mount a sterilizing response. This would have to be tested, but the theory seems sound. Leronlimab may be the missing link in all the vaccines. This means that leronlimab could lessen the infectivity of all vaccines that are given including the new COVID-19 vaccines. This could be a major leap forward in the field of vaccinations.

Investment Summary

The conference call on Thursday could bring a number of surprises. It’s possible that the company might be very close to completing enrollment in its CD-12 clinical trial which puts a likely approval 60 days from now. This news would immediately alter the stocks price trajectory higher. The Drug Safety Monitoring Committee (DSMC) may have taken a peek at the data since they completed 75% enrollment and may have found there is enough evidence to support an EUA on the primary endpoint of mortality. An update on the long haulers study was also expected since it has not been published on www.clinicaltrials.org. There could be more NASH patient recruitment or a report from their lab with respect to the cancer patients. The company may have expanded their recruitment to additional sites in the United Kingdom. BLA filings for Canada and the MHRA may be close to completion. The company introduced 2 emergency use stroke cases and may take the opportunity to update investors with some anecdotal data. The market mover may be a Philippines EUA filing or approval.Adjuvant therapy to COVID-19 or any vaccine is an incalculable market, so if they developed any intellectual property or are starting any studies this is just another indication that reengages big pharma and the corresponding buyout speculation. CytoDyn has an enormous platform technology in many large disease indications. For investors to sit on the sideline with all this potential is unconscionable. The COVID-19 indication is worth at least $10 billion which translates into a share price of $16.95. Expect a violent upward price surge after the investor call.As always, good luck to all (except the shorts)!

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