CytoDyn's legal fight against CRO Amarex ends in $12M settlement

CytoDyn’s legal fight with Amarex Clinical Research appears to be coming to an end. The biotech announced July 9 that it has reached a settlement in which the CRO, a former partner of the company, will pay CytoDyn $12 million on top of eliminating a $14 million bill.

“We believe this settlement is an excellent outcome for CytoDyn shareholders and substantially improves the company’s balance sheet,” CytoDyn CEO Jacob Lalezari, M.D., said in a press release. “Importantly, the settlement ends the potential distraction and uncertainty associated with protracted litigation and allows the company to immediately advance its clinical trials and research and development initiatives.” 

Amarex provided CRO services to CytoDyn for clinical trials of its CCR5 receptor agonist leronlimab as a treatment for HIV. Low-quality data prompted the FDA to place a hold on all programs for the drug—the HIV component was lifted in early February after two years—and led CytoDyn to withdraw its application for approval as a combination treatment for patients with HIV who were resistant to antiretroviral therapy. CytoDyn blamed Amarex for the poor data quality and sued the company for damages. 

As part of the settlement agreement, Amarex has paid CytoDyn $10 million and will pay the remaining $2 million over the next 12 months. A $6.5 million surety bond paid by CytoDyn to Amarex was released to the biotech as well, and CytoDyn’s $14 million bill from Amarex was eliminated. The settlement ends all legal claims between the companies, according to the release. 

The battle between CytoDyn and Amarex is one chapter of a larger saga in the companies’ troubled history. In late 2022, the former CEOs of both firms were charged by the U.S. Department of Justice for defrauding investors by lying about FDA submission timelines and leronlimab’s efficacy against COVID-19 in an effort to boost CytoDyn’s stock price. They both are set to go to trial in November 2024, according to case documents

Meanwhile, CytoDyn is still continuing its quest to launch leronlimab. So far this year, the biotech has launched preclinical studies on the drug in metabolic dysfunction-associated steatohepatitis, or MASH, and the brain cancer glioblastoma. Preclinical data on its use in MASH and the start of a clinical trial for the drug in glioblastoma are expected later in 2024.