CytoDyn President and CEO Nader Pourhassan, Ph.D., is out, and Chief Financial Officer Antonio Migliarese is in, at least for the interim, in the latest twist in one of the wildest tales in biotech.
The embattled company, which has been trying for the past year to prove its therapy leronlimab can work in diseases from cancer to COVID-19 to HIV, unveiled the leadership change Tuesday afternoon. Pourhassan’s termination is effective Jan. 24, and he has been removed from the board of directors as well. He's been CEO since 2012.
The board will now start searching for a replacement with the candidate ideally “possessing the requisite pharmaceutical industry experience to enhance the company’s efforts to achieve regulatory approval and commercialization of leronlimab.” Migliarese will continue to serve as CFO as he picks up the duties of interim president.
Board Chairman Scott Kelly, M.D., who also serves as chief medical officer, will step down from the board as well to “enhance the board’s independence,” the company said. Tanya Durkee Urbach will take his seat.
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“Now is the right time for the next phase of CytoDyn’s evolution, as we focus on continuing the clinical progress of leronlimab and ultimately securing regulatory approval and commercialization,” Kelly said in a statement. “We thank Dr. Pourhassan for his vision and passion for developing leronlimab into a platform molecule with the potential for multiple therapeutic indications.”
There’s a lot to unpack in the CytoDyn story. Leronlimab is a monoclonal antibody that the biotech has tested in a handful of indications. The drug failed a COVID-19 trial last year, despite the company’s insistence that it could treat patients with severe disease. The FDA disagreed, publicly chastising CytoDyn for cherry-picking data to suggest the failed drug was a success.
The public statements also caught the scrutiny of the Department of Justice and the Securities and Exchange Commission (SEC). CytoDyn has been subpoenaed by both agencies for documents related to leronlimab and public statements about its potential use in COVID-19, triple-negative breast cancer and HIV.
After the rare public smackdown, Pourhassan presided over a bizarre press conference in which he begged investors to stop trashing the FDA.
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“You can throw all kinds of eggs and tomatoes, whatever you like, at me. I deserve it,” he said. “But please don’t do that to the regulatory agency.”
That’s not all the drama. Last year, the FDA sent over some instructions to help CytoDyn recover an application for leronlimab in HIV after the company accidentally sent in the wrong data sets.
CytoDyn’s investors are a dedicated group that swarm Twitter (and Fierce Biotech’s inboxes) to defend leronlimab at the slightest mention of the treatment’s troubles. One group of investors has even pitched its own solution to get leronlimab across the finish line in cancer.
The incoming CEO will have a tough role to fill. This person will need to help CytoDyn regain credibility and smooth over the mistakes of 2021, and, hopefully, put up some more data to support leronlimab’s approval in one of the indications the company is aiming for.
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But there's not a lot of money in the company's coffers to get that done. In a recent report to the SEC (PDF), the company said “our cash reserves are extremely low,” and substantial additional financing would be needed to “satisfy our current payment obligations and to fund our operations.”
“If we fail to raise additional funds on a timely basis, we may be forced to delay, reduce the scope of, or eliminate one or more of our clinical trials or postpone our regulatory submissions and commercialization initiatives, which would adversely affect our business, financial condition, and stock price. If we deplete our cash reserves, we may have no choice but to discontinue our operations and liquidate our assets,” the filing said.
CytoDyn has already missed a payment to Samsung, which provides contract manufacturing services for the company, in the amount of $13.5 million. An additional payment of $22.8 million is due Jan. 31.
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And then there’s a dispute with a former contract research organization, which CytoDyn says has caused a delay in filing leronlimab in HIV.
The new chief executive will have to deal with these issues all while presiding over an investor army for a company that has seen a share decline from a high of $7.15 apiece a year ago to just 53 cents in premarket trading Wednesday.
But as the market opened, CytoDyn's shares popped nearly 12% to 58 cents, suggesting the investor community is happy to see a change.