CytoDyn, Inc. OTCQB: CYDY Short Report, 9:30am April 14, 2020

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Financial Highlights:

 

The last quarter has been yet another poor one as far as CYDY financial performance is concerned. Cash-in-hand has increased, however, this has likely been the result of share issuance as the number of outstanding shares increased from less than 400 million at the end of 2019 to more than 470 million currently. Furthermore, net losses reached a whopping $35 million last quarter a significant increase when compared to average quarterly losses during 2019 which amounted to $14.6 million. For more information on CYDY financials please have a look at our previous short report on this ticker.

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Leronlimab and COVID-19:

Coronavirus Disease 2019 (COVID-19)

Also called as SARS-CoV-2, COVID-19 was identified as the cause of respiratory illness outbreak in Wuhan, China. Although the exact origin is uncertain, the disease is highly contagious that transmits from person-to-person via respiratory droplets by sneezing, cough and personal contact. The symptoms include fever, cough with shortness of breath. Upon exposure, the symptoms may appear within 2 to 14 days and infected patients may either remain symptomless or suffer severe illness or fatal events due to ‘cytokine storm’. Cytokine storm is an immunological event that involves an immune system reaction mediated by various immune molecules such as chemokines and cytokines to eliminate disease-causing virus.

Pro-inflammatory immune chemical components such as interleukins (IL-6, IL-8), monocyte chemoattractant protein 1 (MCP-1 and MCP-3), interferon gamma-induced protein 10 (IP-10), tumor necrosis factor-α (TNF-α), and C-C motif chemokine ligand 5 (CCL-5) are usually elevated in severe influenza and also in COVID-19 patients. Uncontrolled or overt cytokine storm is the main cause of death in COVID-19 infection. As of now, no proven medical treatments are available and largely depend on symptomatic management.

Cytodyne’s Leronlimab (PRO 140) 

Cytodyne (CYDY) has added COVID-19 as one of the indications of Leronlimab recently, after late 2019 outbreak. Leronlimab is an investigational humanized IgG4 monoclonal antibody that blocks CCR5 receptor (CCL5 acts as a ligand (something fits with respective receptors like lock and key) for the receptor CCR5). CCR5 receptor is believed to play an important role in the disease process of HIV infection, cancer spreading, non-alcoholic liver fat deposition (NASH), graft versus host disease and possibly COVID-19 infection, and being investigated by CYDY in various phases of clinical trials involving over 800 patients. Leronlimab is said to mitigate cytokine storm by blocking CCR5 receptors (thus preventing CCL-5 ligand binding), which is involved in the initiation of inflammatory process and cytokine storm.

Reliability of CCR5 targeting – What previous studies found?

According to CYDY, Leronlimab is a CCR5 antagonist that elicited remarkable efficacy in COVID-19 patients at day 0, 3 and 7 with dramatic immune restoration and reduction of cytokines such as IL-6 and TNF-alpha. These results are believed to be helpful and correlating with a patient’s recovery.

Although CYDY treatment drug Leronlimab relies on IL-6 reduction to alleviate COVID-19 disease severity and to restore immune function, contradictingly, previous studies found – modulating or depleting IL-6 level cannot attenuate or mitigate cytokine storm events.

Even if Leronlimab attenuates pro-inflammatory cytokines such as TNF-α, IL-6, or CC chemokine ligand 2 to prevent the cytokine storm, the death event is unlikely to be prevented in COVID-19 patients, as reported by another study. Meaning, the cytokine inhibition does not protect against death in COVID-19 associated cytokine storm and exploration of anti-viral drugs is preferable to prevent death events.

This study suggests – treating cytokine storms associated with H5N1 (bird flu) cannot treat the disease or protect the patient from death. Similarly, as noted in a recent publication in the Lancet cytokine inhibitor treatment cannot prevent or confer protection against COVID-19 infection.

A recent Chinese study jointly conducted by Wuhan Biopharmaceutical Company and academicians found that – it is not CCR5 receptors but CCR2 receptors or IP-10 and IL-8 receptor (CXCR1/2) are involved in protection from immune inflammatory response and medications that antagonizes these receptors elicit significant protection against respiratory ailments. Importantly, blocking TNF-α, IL-6 and CCL-5 receptor (CCR5) elicited just MODEST improvements in disease progression and death events. These findings suggest the clinical relevance/significance of CCR2 receptors and invalidity of CCR5 receptor targeting by Leronlimab in COVID-19 patients.

Clearly, we are able to see the inability of Leronlimab in preventing the death events just by reducing certain immune chemicals such as IL-6 and TNF-α.

Furthermore, another recent Chinese study involving 53 COVID-19 patients suggested the role of various cytokines in the disease severity and progression. Out of 48 different cytokines, 14 cytokines were significantly elevated during hospitalization in COVID-19 patients. Among these14 cytokines, IP-10, MCP-3 and IL-1ra showed remarkable elevation that was highly associated with lung oxygen concentration and partial pressure factors (lung function assessment parameters in COVID-19 patients). The study researchers noted – these three cytokines were independent predictors for/closely associated with the progression of COVID-19 (including in severe cases) or disease worsening and fatal outcome. What we should note is – the clinical significance of CCR5 was not observed in this Ground Zero study and hence blocking CCR5 with Leronlimab sounds absurd!

Taking the above study into consideration – increased MCP-3 level has been observed in COVID-19 patients in China. Biologically, MCP-3 has a remarkable property of binding with CCR5 with high affinity and also inhibiting the activation of CCR5, thus serving as a natural antagonist for CCR5.

Extrapolating these findings, CCR5 receptors in COVID-19 are COMPETITIVELY pre-occupied by MCP-3 molecules, resulting in lack of availability of CCR5 for Leronlimab treatment. Meaning, Leronlimab treatment will have no effect in COVID-19 patients due to lack of drug target (CCR5 receptors), thus questioning the rationale of Leronlimab treatment in COVID-19.

These findings suggest – targeting only one cytokine such as CCR5 by Leronlimab is an unviable and ineffective option to treat COVID-19 infection and prevent death in these patients.

To add teeth to this notion, more independent studies are available to suggest Leronlimab is not a better option for COVID-19 infection treatment or to prevent death in these patients.

Although most of these cited scientific studies are based on influenza, the underlying cytokine pathology, specifically ‘cytokine storm’ is a common feature for influenza and COVID-19 patients, which leads to serious harm or even death.

Leronlimab does more harm than benefit?

According to CYDY, Leronlimab is a potential inhibitor of CCR5 receptor that blocks the receptor and its actions in various cancers and also in COVID-19 infection. Theoretically, blocking CCR5 by Leronlimab is believed to be useful in prevention of fatal inflammatory responses such as cytokine storm. However, previous studies found otherwise!!

This study concluded – deficiency of CCR5 (similar to blocking of CCR5 by antagonists such as Leronlimab) leads to hyper-acute inflammatory response that is often fatal; whereas CCR2 deficiency (like administering receptor antagonists) leads to milder inflammatory response with reduced lung pathology and increased survival rates.

Clearly, in our opinion CCR5 is NOT a viable drug target for COVID-19 treatment, as it is being touted by CYDY. This review clearly underscores the inefficacy of Leronlimab against COVID-19 with possibilities of worsening of cytokine storm.

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Recent promotion:

Like many tickers listed in the OTC that experience significant price runs, CYDY has been featured on several promotional websites over the last couple of months. The most notable one is emerginggrowth.com which has put out several articles on CYDY over the last couple of weeks ((1),(2),(3)), all of which clearly mention on a disclaimer at the bottom of the article that emerginggrowth.com was compensated by CYDY.

Emerginggrowth.com actually went as far as publishing a hit piece on Culper Research, a fund that published a report on CYDY that highlighted many of the red flags CYDY has raised over the last few years.

Another promotional outlet that has recently featured CYDY is proactiveinvestors.com ((1),(2),(3)). As its “terms” page states, some of the articles published on the website are indeed promotional, going as far as stating in its CYDY disclaimer that it has received $25,000 in compensation from CYDY. (Note: this disclaimer is region specific meaning that it is not visible from all IP addresses).

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SEC letter:

On February 10, 2020, The SEC’s Division of Corporate Finance wrote a letter to CYDY’s CFO, Mr. Craig S. Eastwood. In it, the SEC asked Mr. Eastwood to disclose information that he redacted from certain filing exhibits as he claimed that “the redacted information is not material and would cause competitive harm if publicly disclosed”. This wouldn’t usually raise too many eyebrows but in CYDY’s case is yet another addition to its track record of red flags.

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Red Flags:

note: for full information on other red flags please read our previous short report on CYDY.