CytoDyn President and CEO Nader Pourhassan begged his investors to stop trashing the FDA after the agency issued a rare public rebuke over the company’s public statements on a pair of failed COVID-19 clinical trials.
“You can throw all kinds of eggs and tomatoes, whatever you like, at me. I deserve it,” Pourhassen said. “But please don’t do that to the regulatory agency.”
Pourhassan responded to a barrage of angry questions from investors a day after the FDA accused the company of cherry-picking data to suggest leronlimab was effective in treating severe COVID-19 patients. The agency said it was compelled to make the statement because of “significant public interest” in the drug.
“It has become clear that the data currently available do not support the clinical benefit of leronlimab for the treatment of COVID-19,” the FDA said in the statement.
CytoDyn’s shares dropped more than 27% when markets closed following the news. The shares continued to decline slightly today to around $1.95 apiece, forcing CytoDyn to make a public statement.
The call began with the general counsel reading a lengthy forward-looking statement disclosure, then Pourhassan tried to rein in investors who seemed to take the rare public commentary from the usually tight-lipped agency as a shot across the bow for the small biotech that’s trying to get an emergency authorization for a COVID-19 drug.
“The FDA has not done anything wrong, we did something wrong,” Pourhassan said. He added that the FDA did not warn them about the statement before it was issued.
In fact, Pourhassen said—at least 11 times—that he was “grateful” for the FDA since leronlimab was previously a shelved drug that was dusted off for the COVID-19 trials.
“We ask people to please respect this process,” Pourhassen said. “This is a wonderful situation, that's what we think.”
Pourhassen was asked by an investor whether CytoDyn would seek to correct the information in the FDA statement.
"No, because there was no false statement made. We're very grateful to FDA, and we want to work with him. Please allow us to work with FDA," the chief executive said, urging investors not to say anything that is “offensive” to the FDA or CytoDyn’s team involved in the regulatory filing. “I get very, very embarrassed and very hurt when I hear people say things that are not correct.”
CytoDyn is also facing a class action lawsuit that alleges the company made false and misleading statements about the viability of leronlimab in treating COVID-19. General Counsel Arian Colachis said they would “vigorously” defend the allegations.
Pourhassen repeatedly said he was embarrassed to respond to some of the questions, including one questioning whether the participation of a Gilead executive in the review of leronlimab was a conflict of interest. Gilead has one of the few treatments authorized for treating COVID-19 patients called remdesivir.
The CEO’s own job seemed to be on the line, with several investors asking why they should continue to support him as head of the company when the current management keeps “over promising, providing misleading information and seemingly pumping our share price.”
Pourhassan said shareholders have a right to vote him out if they choose, and he will not fight if the board were to tell him it’s time to go. But he stressed that statements the company made about leronlimab’s potential were forward-looking. He promised that he would be even more careful from now on to make sure he’s not saying anything that’s unrealistic. The CEO also expressed confidence in the rest of his management team.
Whether CytoDyn learned a lesson from the FDA’s smackdown remains to be seen. On the same day as the investor call, the company issued additional “subpopulation” data from one of the two trials at issue, CD12, claiming success on “almost all of its major secondary endpoints.”
These data will be used to support an emergency authorization in the Philippines, according to the company. CytoDyn is also seeking similar OKs in Brazil and India, where significant coronavirus outbreaks are still underway.
Pourhassen was asked whether the new data represent a contradiction with their assertion that the FDA’s statement was accurate.
“There’s no contradiction here that I see,” Pourhassen said. “I think shareholders should be very happy that we are on the same page as the FDA and they are working with us to get on the next level.”