Troubled CytoDyn ditches COVID-19 indication, enters tricky NASH landscape with new leader at helm

Like many biotechs amid the prolonged bear market, CytoDyn is axing some of its lead programs and trimming down its pipeline. The company's job may be harder than most, however, as it faces an ongoing clinical hold and has decided to focus its efforts on the tricky indication of nonalcoholic steatohepatitis (NASH).

With new leader Cyrus Arman, Ph.D., at the helm, the company will be testing its lead asset only in patients with NASH, HIV or cancer. The announcement, made on an investor call after market close Wednesday, is the latest in a winding series of blockades and pivots.

CytoDyn’s lead asset, a monoclonal antibody dubbed leronlimab, has a convoluted past. In March, the FDA slapped a partial clinical hold on the biotech's HIV program and a full clinical hold on its COVID-19 program. At the time, the company sought out partners to rescue key programs, but to no avail. 

Now, CytoDyn is ditching all attempts in COVID-19. The move follows a failed trial in this indication last year, though CytoDyn had insisted its drug could treat patients with severe disease. The FDA publicly disagreed and called out the company for cherry-picking data to suggest the therapy was a success.

After the agency blasted the company, the Department of Justice (DOJ) and the Securities and Exchange Commission subpoenaed the company and its executives. Both the DOJ and the Federal Trade Commission are conducting investigations, and CytoDyn said it continues to cooperate in ongoing matters.

Then, following a memorable press conference in which former CEO Nader Pourhassan, Ph.D., begged investors to stop trashing the FDA, the leader was ousted in January. CytoDyn’s board began the hunt for a replacement that could help the company regain credibility and hopefully lead leronlimab to success in at least one indication.

Enter Arman. The former chief business officer for Nimble Therapeutics has his work cut out for him. But he stepped into the role as CytoDyn president in July armed with a new strategy and direction.

“Going forward, our external persona and corporate brand is going to evolve and align with our new strategy,” Arman said on the investor call.

Part of that new strategy includes shedding all pipeline projects that aren’t in oncology, HIV or NASH. That means the company will no longer be pursuing leronlimab as a potential treatment for COVID-19, graft-versus-host disease, stroke or multiple sclerosis.

Like other biotechs, CytoDyn cited limited resources and underscored the need to focus on areas with the most promise. The biotech has a unique opportunity, according to Arman, to help patients suffering from both HIV and NASH. The company started to submit required paperwork to the FDA this month in efforts to have the clinical hold lifted for the HIV program, Arman said Wednesday.

Meanwhile, the notoriously tricky NASH indication has stumped many, with big names such as Pfizer failing to find success. However, in recent weeks, several smaller biotechs such as Altimmune and Oramed have seen clinical progress in earlier-stage assets.

As for oncology, CytoDyn’s focus will be in certain solid tumors, namely colorectal cancer, breast cancer and potentially non-small cell lung cancer as a combination agent, according to Arman.

“We intend to run these cancer studies over a sufficient period of time so we can generate a robust and meaningful clinical data set that a potential partner would find compelling,” the CytoDyn president said.

When asked during the call’s Q&A session whether CytoDyn was just as open to a buyout as a partnership, Arman said the company is committed to maximizing shareholder value and that any buyout offer would be considered.

“Ultimately, any buyout would have to be approved by the shareholders themselves,” Arman said. “So, I’ll leave it at that.”