Biotech

Wading through the STAT News FUD Attack on CytoDyn Inc. (OTCMKTS: CYDY)

CytoDyn Inc. (OTCMKTS: CYDY) announced superb top-line data in their mild to moderate COVID-19 phase 2 trial and did not disappoint; however, the message was hijacked by STAT’s reporter Adam Feuerstein.  The top line report was released at 9:15 EST and by 9:23 EST (8 minute later) Feuerstein had done a full analysis of the data and tweeted that they failed the study.  The initial reaction was correct and resulted in a powerful rise in price to $5.09 in the premarket and immediately started dropping precipitously after the tweet.  The amazing part of this story is that long term investors are still falling for Feuerstein’s underhanded tricks, which in this case was a blatant lie.  “Fool me once, shame on you.  Fool me twice, shame on me.”  There have been over a dozen attacks investors should have known this was coming, but Feuerstein preys on the uninformed.  The premarket drama is manufactured purposely to get unsophisticated investors to sell first and ask questions later.  The reality of the situation is that leronlimab is an approvable drug.  Youtube personalities DrBeen and DrYo took to the airwaves doing video interviews last night to explain the trial results and both confirmed that it was an excellent report and that leronlimab was indeed an approvable drug.  When asked about FDA Approval Dr. Patterson went so far as to say

“I would say my answer would be yes.  .  .  .  This is a victory and I’ll just say that”

Meeting the Primary Endpoint is Meaningless in Phase 2 

It was clear from the chat board activity after the release that most investors don’t understand what a phase 2 investigational trial is about.  It’s a trial designed to evaluate the effectiveness of the drug and the side effects.  The investigational part is trying to figure out the right dosage and the best possible endpoint to use in the phase 3 trial.  If the world wasn’t in a pandemic situation then this phase 2 data would help craft a phase 3 study.  During the phase 3 study, the NEWS2 indicator, a secondary endpoint in name only, would likely become the primary endpoint because it more accurately measures the cytokine storm part of the disease, as well as relevant clinical outcomes. Unfortunately the world is in a pandemic situation where no drug has met an endpoint except by Fauci’s decree that remdesvir would be the new standard of care even though it failed to reduce mortality.  In a pandemic the rules relax, and allow the drug company to ask for emergency approval since it showed efficacy and safety.  This was the first drug on earth to meet any endpoint in a COVID-19 randomized double blind clinical trial.  There are no other Mild to Moderate trials because it is the hardest patient population to prove efficacy. 

Dissecting Clinically Significant Data

Lerononlimab did not meet its primary endpoint but appeared to get really close, close enough for them to call it clinically significant. So the question that should be asked is “why did that happen?”  It really boils down to the definition of the endpoint.  They were measuring the clinical symptom score which includes fever, myalgia, dyspnea and cough.  Many people in the trial just weren’t that sick which is why their press release stated

The subgroup analysis indicates that among patients with more symptoms at baseline, those who received leronlimab had a greater treatment effect than patients who received the placebo.”                          

What this means is that leronlimab only seems to work on sicker patients experiencing the cytokine storm.  This is completely in line of the mechanism of action that CCR5 inhibition stops the trafficking of macrophages and their release of cytokines.   

Drug Should be Approved in Short Order

There are many shots on goal with many different regulatory arms in different nations.  The company said that they will 

Submit its Top-line Report for this trial to the U.S. Food and Drug Administration for review later this week.”

This drug isn’t a one trick pony and the NEWS2 endpoint was developed by the Royal College of Physicians in England.  So the likelihood of approval in England is quite high because this is the first trial to have statistically significant efficacy data and uses their own scoring system.  It is important to note that no other trial in mild to moderate COVID-19 patients anywhere in the world has reported any efficacy.  The CEO of CytoDyn Nader Pourhassan said

“In the mild- to-moderate population, it is important to have a therapeutic option for COVID-19 in patients who are showing signs of rapid clinical deterioration. Patients receiving leronlimab showed a statistically significant improvement using NEWS2 clinical parameters. We will make a case for immediate approval of leronlimab for this population of COVID-19 patients, not only in the U.S., but in the U.K. and other countries around the world.”               .    

Based on past dialogue, it’s reasonable to speculate that the other countries will be looking to approve it like Mexico, some European Union Countries, China, Japan, South Korea, and perhaps even Brazil. These discussions in foreign countries actually put the pressure on the Trump Administration to step up and lead with FDA approval, because if they don’t, they could very well see an American developed drug with limited supply make its way overseas where they are willing to approve it and pay for it.    

COVID-19 is a Graveyard of Drugs

Arthritis drugs that blocked IL-6 such as Actemra (tocilizumab) and Kevzra (sarilumab) manufactured by Sanofi (NYSE: SNY) and Regeneron Pharmaceuticals (NASDAQ: REGN) were supposed to calm the cytokine storm but failed to meet their endpoints. What’s interesting is that GlaxoSmithKline (NYSE: GSK) is also trying with their rheumatoid arthritis drug otilimab but it targets the GM CSF cytokine which is a different approach but this drug is not approved so it requires a large trial size that may take too much time to complete. Jakafi (ruxolitinib) was originally approved for patients with myelofibrosis, a rare type of bone marrow cancer.   It is manufactured by Incyte (NASDAQ: INCY) and was repurposed for COVID-19 but failed in the critical patient population.   We all know the saga of Hydroxychloroquine where it passed and then it failed and now realizing that there exists this tiny window where it may work but the doctors have such mixed messaging.  Although Gilead Sciences (NASDAQ: GILD) got emergency use approval of remdesivir the exclusion criteria due to the toxicity really place this drug with one foot in the grave if something better comes along.  

Promising Treatment Options

The only treatment options in contention for a quick approval are Humanigen (NASDAQ : HGEN) lenzilumab which just got approval to roll out its Phase 3 study in Brazil.  Sorrento (NASDAQ: SRNE) is trying to hit COVID-19 on multiple fronts.  It has a small molecule drug in Phase 2, called Abivertinib which is a lung cancer drug that is being repurposed for its ability to lower the cytokine storm.  They also have an antibody that is supposed to neutralize the spike protein and a vaccine candidate.  Equillium (NASDAQ: EQ) is riding high after it announced that its candidate itolizumab reduced mortality in hospitalized COVID-19 patients.  These results led to Indian approval of the first drug candidate for COVID-19 in the world. It’s important to note that this approval came off of a trial of only 20 patients that received the active ingredient but the results were statistically relevant. The mechanism of action is that the drug binds to the CD6 receptors on T-Cells and thereby prevents proliferation and leads to a reduction in inflammation.      

The dark horse candidate may be Ampio Pharmaceuticals (NASDAQ: AMPE) which recently started a phase 1b/2a trial with Ampion.  It has a robust safety profile like leronlimab and a unique mechanism of action that targets the entire inflammatory cycle and not just one cytokine. It may be able to fly through trials like leronlimab and is the only other drug that seems to work on multiple cytokines.  Another treatment option is Athersys (NASDAQ: ATHX) and its MultiStem treatment that is working for approval in acute respiratory distress syndrome (ARDS).  

Coming Ethics Probe for STAT News?

STAT News reporter Adam Feuerstein seems to have an axe to grind with CytoDyn’s CEO Nader Pourhassan.  He has made many attacks, but serious ethical issues are coming to the forefront.  Feuerstein’s early peek at Gilead’s data resulted in an epic $10 billion run up in anticipation that remdesivir was going to get COVID-19 approval.   Congress was calling for an SEC investigation into the leak.  There is now evidence that Feuerstein is tampering with patients in CytoDyn’s clinical trials.  This email is just short of harassment as he tries to dissuade a leronlimab patient from continuing to use leronlimab in favor of Trodelvy a drug made by Immunomedics (NASDAQ: IMMU) that he supports.  Investors need to understand the depths that this “reporter” will dive to in order to make a story.

Investment Summary

Investors need to wake up and recognize the STAT is selling a message of Fear Uncertainty and Doubt (FUD).  STAT is the epitome of fake news reporting.  They lied and said CytoDyn failed the phase 2 trial yet CytoDyn presented statistical significance in their secondary endpoint of NEWS2.  Perhaps STAT should think about doing more than 8 minutes of due diligence before they comment in the future, but investors need to do their part and stop reacting to it.  This pounding the stock has taken for being the first in COVID-19 to hit their endpoint has completely derisked the stock.  There is little to no downside left, and much upside on what amounts to approval that is probable.  The stock should currently be at new highs but won’t get there until investors digest that they have been conned by Feuerstein.  

The company is planning a conference call after the bell that may reveal more of its plan for uplisting which could be a major catalyst by bringing in institutional holders.  The CD12 severe to critical trial is also fast approaching their interim recruitment level of 195 patients, but the truth unfolding is the data is so good on the CD10 mild to moderate trial that the drug may be approved before the readout is done.  The political threat of foreign approval to the Trump administration and pressure to find something in the USA that works may finally work its way to the oval office or national news.  When the foreign countries like the United Kingdom look at approving the drug they first look at safety and then would be looking at clearly defined efficacy in the endpoint that they developed with a (p < .02).  Investors duped into believing this was a failed trial may be waking up in the near future to a UK approval and wonder what happened.        

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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. The author may hold either long or short positions in the securities discussed.

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Wading through the STAT News FUD Attack on CytoDyn Inc. (OTCMKTS: CYDY)
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