Courtesy of MGK_2: CytoDyn Webcast 4/11/2023
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CytoDyn Webcast 4/11/2023
2:51 Cyrus Arman: Thank you Christina and Thank you to our shareholders, panelists and various members of the media who have joined us today. The primary topics that we want to cover include an update on the partial clinical hold status with the FDA, an update on the clinical development plan for our next NASH trial, a couple new Key additions to our Leadership Team, additional clinical Life Cycle efforts, that are ready to preserve and enhance the value of Leronlimab and its derivatives, a financial update, they will be exempted, by Antonio and we will conclude with a Q&A session that will address questions that were submitted prior to the Webcast and as a reminder, we generally accept questions ahead of our scheduled quarterly updates, and we do our best to address some through the prepared statement and then provide further clarification at the end of the webcast.
03:58: As usual, before we begin, I want to remind everyone, of CytoDyn's mission: and I do this because, for many of us, this is why we choose to be here at CytoDyn and frankly not somewhere else, right? We believe we have a moral obligation to generate therapies, to improve people's lives, and we firmly believe that Leronlimab and the various derivatives that are being generated from it, fall in the category of therapies that can improve people's lives. We achieve this through a focused and disciplined development strategy, and in doing so, we will create a value generating path that will result in economic returns for our investors. This is why we are here. This is why we show up every day. This is why we do the work we do for patients and for our shareholders.
04:51: So turning now to our primary topic: which is the status of the partial clinical hold from the FDA. As a reminder, for everyone on the call, in March of 2022, just over a year ago, the FDA's division of AntiVirals within the offices of Infectious Diseases placed a partial clinical hold on the Company IND HIV program and a full clinical hold on a separate IND for our Covid 19 program. Though, at the time, CytoDyn was not actively enrolling new patients under either the INDs that were placed on Hold, and we choose to voluntarily withdraw the INDs for the Covid 19 program. We subsequently made the business decision to no longer develop leronlimab in Covid 19 patients. Since March 2022, we have been working diligently to resolve the partial clinical hold on the HIV program, and also taking time to insure that we were putting in the appropriate care and attention required to address the FDA's concerns. Part of this entailed successfully working through data access, data formatting issues, related to the CRO that was responsible for collecting and managing the clinical data, that we actually needed to address the FDA's concerns.
06:13: From the original Partial Hold Letter, that we received in March 2022, the FDA had identified various items that needed to be addressed as part of a complete response to that clinical hold. I'll go through those items now. and Provide you an update on the status, where we are at. So the FDA requested an updated investigator brochure, there was a request to come to compliance with annual reporting requirements for all the active INDs with adequate quality annual reports which we agreed with the FDA to address through annual development safety update reports, SARS. There has been a further request for a safety management and pharmacovigilance program, to find a place for an aggregate safety data analysis which included an analysis of all cardio vascular events across all the clinical trials that involved Leronlimab. This was further expanded to include all system that we had data on and also the benefits / risks assessment for the HIV population being studied as part of that indication.
07:42: It is important to note, that with the exception of the benefits/risk analysis for the HIV indication, we took the items that had been requested by the FDA, really needed to be addressed regardless of the indication for or the disease being studied. During the 3rd fiscal quarter which ended at the end of February 2023, we submitted the documents that were requested by the FDA, in the original March 2022 partial clinical hold letter. Subsequently, the FDA responded to us, through written communication, requesting some additional information and clarification regarding the benefits / risk assessment for the HIV population and made an additional supplemental requests that we, the company, also provide a general investigational plan for the HIV program IND going forward. So, in March 2023, just last month, we responded and submitted the additional information, and the clarifications requested for those 2 items. The FDA then responded back with a 3rd further written communication to us, again relating to the benefit / risk assessment as well as requesting submission of a new Protocol for HIV indication to be studied once the Partial Hold is lifted or some clarification that CytoDyn may not continue to develop Leronlimab in that indication.
09:24: So, at the end of March 2023, just last month, we had, an informal meeting with the FDA, where the agency clarified some of our more specific questions with respect to the information that we would like to see addressed. The risk / benefit portion, of the clinical hold and work on finalizing the supplemental submissions to address the items that we discussed with the agency during that informal meeting and we remain fully committed to the submission of the complete response to lift the partial clinical hold for that indication.
10:05: This brings us to our next topic: which are the development plans for a subsequent NASH trial. So, in parallel to, the work that I just described, we are also developing a clinical synopsis for our next NASH program. While the IND for the NASH program is issued by the division of Hepatology and Nutrition from a different office within the FDA, in this case, the office of Immunology and Inflammation and it is technically, not directly impacted by the existing Clinical Hold on the IND side, as a company, as a sponsored clinical trials, we intend to insure that we are going to make all potential sponsor responsibilities related to safety reporting that could be requested by the division of Hepatology. So, as such, we plan to request, a Type B meeting with the division to concur on the design and a proposed clinical trial for the next NASH study. We would then subsequently plan to submit a protocol amendment to the existing NASH IND and include any and all supporting documents that would pertain to patient safety. That would allow us to begin new investigations within that NASH clinical population. So then, we are committed to working with the regulators to develop leronlimab in NASH and in other indications, specifically in oncology, as we have previously discussed, and we're preparing these materials for the regulators.
12:00: We are also taking the appropriate steps to insure that we have the proper personel in house to execute on our clinical plans. And so this includes the recent addition of Jane Conlon Werner as our new Executive Director of Quality. I think we are incredibly fortunate to have been able to recruit Jane to join us here at CytoDyn. She has extensive experience in Clinical as well as CNC Quality and compliance function review. At, both, large Biopharmaceutical companies and smaller Biotech companies like CytoDyn and I really think that Jane's experience in these areas is going to be critical to future clinical success and that work timing ??for her. This really demonstrates our committment to insuring quality and compliance across the organization.
12:56: Additionally, we have also firmly established Dr. Scott Hansen as our Head of Research and Basic Science. Dr. Hansen is currently an Associate Professor at OHSU. and within this newly formalized role, Dr. Hansen will support our clinical development activities, related to biomarker and assay development for future clinical trials, as well as supporting and leading some of our earlier staged efforts, geared towards the development of longer acting molecules targeted to CCR5.
13:33: As a part of those efforts, we have also recently entered into a joint development agreement with a 3rd party Research and Development Bio-Tech company to develop long acting or more longer acting molecule CCR5 blocking. So, in addition to potentially leading to a improved or modified therapeutic, that, we believe that has greater acceptance by those patients and physicians and this could help to yield extended intellectual property section that would increase the underlying value of our patent portfolio.
14:13: So we are pleased Dr. Hansen joined the team. He is here with us on this call. And I'll turn over to him now so he can elaborate further on his backround, and his experience with Leronlimab in his own lab. Scott?
14:33 Scott Hansen: Thank you Cyrus. I have about 25 years of experience in the fields of virology, oncology and immunology. At OHSU, I currently lead one of the largest and prominent, non-human primate research labs in the country. My laboratory covers a remarkable breadth of work including research projects on malaria, numerous viral and bacterial diseases, immunology and cancer. As you all know, many of these research areas, that I'm studying are relavant to CytoDyn's own development plans. However, what I am most known for, is developing Cytomegalo Virus or CMV as a next generation vaccine platform. Based on this technology, I helped cofound a small BioTech company, preserved the IP around the new vector platform, and take it through the clinical development process. Till I took the new clinical development process for the CMV vector platform, I created a quality system, to write QA, QC oversite of my laboratory, and basically, what that means if you are not in this space, it uses good documentation and good clinical laboratory practices, so that the results from the assays from the laboratory can be recorded to the regulatory agencies such as the FDA. I think that the system is really important for supporting ongoing research studies and clinical trials for CytoDyn. I think it could be very helpful.
16:00: So how did I come to work for CytoDyn? It has actually been 2 years ago, in March, 2021, Dr. Jonah Sacha, a collegue of mine at OHSU, and long time collaborator with CytoDyn, asked me to help with the Receptor Occupancy and BioMarker analysis for Leronlimab on an exploratory basis. I was blown away by the data we were generating at the lab. I'm kind of embarrassed to say, but at the time, I didn't know much about Leronlimab, besides that it was a monoclonal antibody, against a CCR5 receptor, and that it was used to prevent HIV infections. So what I was observing in the laboratory from the experiments I was doing, there was numerous Immuno-modulatory effects including possible immune cell proliferation, calcium signaling, monocyte proliferation, CCR5 receptor stabilization. Can probably go on and on about this. Something I kind of keep down a lot about but, I told Cyrus that I would try to keep this brief and short.
17:15: One of the things I wanted to share related to this is that one of the first conversations I had related to this with CytoDyn leadership after running a few half days in the laboratory, they told the leadership team, this isn't just a molecule to prevent HIV, it is much more than that. Which I think I got a few people in the room to chuckle, because I think obviously, they already knew that. Basically, why I'm telling you this, I was hooked from that point on, and ever since, I've been taking a deeper dive into the mechanism of action for the various disease states including HIV, NASH and Cancer. For each of these therapeutic areas, I believe there is actually a mechanistic rationale for the use of Leronlimab. And that is actually why I am here to re-iterate what Cyrus said earlier. This is why I became a scientist. This is why I am here. I think this a phenominal molecule.
18:11: So today, data that we generated has been used in 3 manuscripts. Two are currently published and one currently pending publication. And I am pleased to say today that Dr. Sacha and I have recently began working on a 4th manuscript. And I think it is important to get these manuscripts out there because they really demonstrate the potential therapeutic use of Leronlimab in these disease states. I am excited to join the company in a more official capacity. I think one of the big questions people may be wondering, is if I will be leaving OHSU? and the answer is No. At least, not at this time. CytoDyn does not currently have the necessary laboratory space for me to be effective and in position and provide research, support for mechanism of action in upcoming clinical trials. I basically need a laboratory. OHSU and CytoDyn already have a strong relationship. Our work is supported by ongoing sponsored research agreements and at this time, will continue with the arrangement. Thank you again Cyrus, for the opportunity and I look forward to working with everybody in the company in a more formal capacity and basically getting the job done.
19:30 Cyrus Arman: Thank you Scott, we are incredibly excited to have you on the team in this more formal capacity and we are incredibly fortunate that you and Dr. Sacha continue to colaborate along with OHSU in general on the development of the molecule and potential longer acting derivatives for the molecule. While we brought in Jane and Scott to the team, we continue to seek out a new Chief Medical Officer. We fully intend to make that hire once we find the appropriate candidate. That remains an ongoing search for us. I'll now turn the call over to Antonio Migliarese our CFO for our financial update.
20: 27 Antonio Migliarese: Thank you Cyrus. Good afternoon all. I'll be providing a brief financial update today. As everyone is aware, yesterday we filed our 10Q for the quarter ended February 28, 2023. Today, we will be touching on some select financial information and data from that filing. As we plan on touching on only some select financial information, we encourage listeners to visit the company's website and access the form 10Q in its entirety for a full understanding of the company's full financial results and position. This is accessible via our website. ...
21:28: In our most recent 10Q filing, filed yesterday, we demonstrated a continued support of investors through financing and fund raising activities and the company's continued focus on aligning the availability of capital with the needs of the business while continuing to judiciously manage and reduced expenses with focused spending. We posted the cash collateral required for the Amarex surety bond which will remain classified as restricted cash until the Amarex litigation is resolved. Most importantly, this resulted in the release of the liens on the company's patents which were previously secured by the cash collateral posted by an investor which has now been replaced. Having this restricted cash sitting on our balance sheet strengthens it.
22:12: The company has retired an additional $3 million of outstanding convertible debt in exchange for common stock. Further, we recently agreed with the note holders, to extend the maturity date of these notes 2 years, until April of 2025. As part of the extension, the company agreed to 2.5 extension fee which increases the outstanding balance, however, this extension provides the company the flexibility and allows it to remain in good standing with the note holders and the terms of the note.
22:45: Our reported cash balance as of February 28, 2023 consisted of approximately $5.1 million cash and additional $6 million restricted cash. Our cash balance as of last year end was May 31, 2022 was $4.2 million. The increase in cash has been a result of recent fund raising efforts and our continued committment to reduce ongoing operating expenses. Cash proceeds provided by financing transactions for the 3rd quarter and year to date were $14.7 million and $28.6 million respectively compared to $4.6 million and $40.1 million for the same periods in fiscal year 2022. We continue to be focused on stretching and making funds last as long as possible in order to be as opportunistic as possible with our financing efforts.
23:38: Cash used in operating activities for the 3rd quarter and year to date were $6.2 million and $21.7 million respectively compared to $11 million and $71.7 million for the same periods in the prior fiscal year. The significant improvement in cash used in operating activities is primarily related to an improvement in the company's operating model. In particular, GNA and R&D expenses offset by payments to outstanding vendors. I will focus on our operating loss today as most of the other expenses included in our net-losses are non cash expenses. Operating expenses for the 3rd quarter and year to date in fiscal year 2023 were $3.9 million and $36.8 million respectively compared to $19.4 million and $66.6 for the same period in fiscal year 2022. The decreases were primarily related to the significant reductions in GNA, R&D, and pre-launch inventory write offs except for the year to date period which was offset by an increase in inventory write offs. The decrease in GNA expenses was primarily related to reduction in legal fees, personel costs, abstence of the prior fiscal year proxy, and insurance premium offset by increase external auditor costs. The decrease in R&D expenses was primarily driven by the completion costs of closing of clinical trials and activities which were on going in the previous fiscal year, Covid 19, NASH, HIV, Oncology, and HIV BLA, offset by expenses related to the clinical hold related work.
25:22: The increase in the inventory write offs for the 9 month period was primarily due to the withdrawl of the BLA during the second quarter and the company's inventory no longer qualifies for inventory capital association for accounting purposes. I'd like to note that although the inventory is not being accounted for, on our books, we are still physically maintaining the inventory and it is "in good standing" to be able to be used for future clinical trials. Moving forward, starting with the next 10K filing, our deadlines will be changing. Our 10K will be due 90 days after year end and the 10Qs will be due 45 days after each quarter ends. This due to the company's filed leap status changing to a non-accelerated filer. As we continue to advance the organization forward, we will be continued to be focused on judiciously managing expenses, continuing to identify potential opportunities for value creation, and identifying diluted and non diluted financing alternatives. Similar to all other pre-revenue Bio-Tech companies, we require significant capital to support our future success. The current board and management are committed to raising capital at the most advantageous time and terms available. By using the capital raise to support focused execution the clients business objectives, which we believe will result in maximum value creation over time.
27:00: Cyrus Arman: Question and Answer:
Christina: Has the safety hold been lifted? If not, then Why? What are the current trial plans?
Cyrus: At the current time, the partial clinical hold for HIV remains in place. Based on our most recent interactions with the FDA, we believe that we do have a clearer understanding of the information requests regarding the benefit / risk assessment for the HIV MDR population in question. As well as the additional forward looking general investigation planned along with a full clinical protocol that has been requested by the agency. As I mentioned earlier, we are working on finishing that supplemental submission to address those items.
Christina: If the hold is not lifted, is it a vital part for proceeding with any of the other indications including HIV and NASH?
Cyrus: So the IND for the NASH clinical program is issued through a different division of the FDA, and it is technically, not directly impacted, by the existing partial clinical hold. For HIV, there are certain small term reporting requirement for any clinical trial to proceed and some of those requirements included the type of documentation that we were asked to prepare as part of the complete response to the clinical hold. So with that in mind, we are currently preparing materials for re-initiation clinical trials in NASH as well as the complete response on the HIV side. So these things are happening in tandem. Simultaneously.
Christina: Has there been actual client enrollment from any clinical trials and if so, which one?
Cyrus: CytoDyn has conducted over 20 clinical trials across several major therapeutic areas including infectious diseases, immunological conditions, various cancers, and through all of these trials, which have been conducted under INDs, with various divisions of the FDA, we have collected data on over 1,500 patients who have been exposed to Leronlimab and that is the data that forms the basis for much of the data submission that we are now providing the FDA.
Christina: Does the company have any data as to the long term consequences of CCR5 blockage? What are the clinical ramifications of this?
Cyrus: I have to be clear that despite the large number of patients that have received Leronlimab, the clinical program that I just mentioned, Leronlimab has not received any full regulatory approval for use by the FDA or any other agency and so I essentially can not make any definitive conclusions or statement about long term efficacy or long term safety of the drug. What I can say anecdotally, is that there are a fair number of patients who are enrolled in CytoDyn's sponsored extension trials for the CD01 and CD02 and CD03 programs who had been receiving Leronlimab as a long term viral suppression therapy for many years. And all of these patients safety data are included in the aggregate safety summary which has been submitted to the FDA for their review. So we haven't seen anything in our analysis that is bad by the FDA currently.
Christina: Any update with Arbitration with Amarex? And the Damage claim against Amarex?
Cyrus: We anticipated that this would be a question that would come up. I'll take a moment to provide who Amarex is, and what happened and what our company's relationship is with Amarex. Amarex previously served as CRO for CytoDyn starting in or around 2014 providing management and consulting services for nearly all of CytoDyn's clinical trials involving Leronlimab and during that time Amarex managed about 20 different CytoDyn sponsored studies. Among other issues, following the discovery of certain specific oversights associated with a prior submission to the FDA, it became increasingly apparent to CytoDyn that Amarex is not performing its services on par with industry standards or in some cases not at all. Over the past 12 months, we were able to obtain a 3rd party audit, which we discussed previously, which confirms these suspicions and uncovered significant non performance and under performance by Amarex. We believe that this conduct and underperformance results in a clear breach of contractural agreements between the 2 parties. We are in the process of seeking damages related to that breach of contract. In terms of where we are from a proceeding stand point. We have already filed the claim against Amarex. In those proceedings, among other claims for damages, we would be seeking reimbursement for services that were invoiced by Amarex and simply never performed and services that were negligent or services that were performed well below industry standard. We continue to pursue that. this case and we look forward to the opportunity to present more fully, but do to the fact that this is still pending legal matter, there is not much more we can say at this time.
Christina: Thank you Cyrus, no additional questions.
Cyrus: We continue to expect 2023 to be a catalyst for the year. This includes the resolution of the partial clinical hold for HIV, the addition of the CMO to the team, the initiation of a new NASH trial and the continued development of the longer acting CCR5 molecule, the potential being to increase the value of our patent portfolio and at the proper time, do a corporate rebranding as well.
Thank you all for your time today. Look forward to speaking at the next quarterly update or potentially sooner if needed. Thank you.
CytoDyn Webcast 4/11/2023
2:51 Cyrus Arman: Thank you Christina and Thank you to our shareholders, panelists and various members of the media who have joined us today. The primary topics that we want to cover include an update on the partial clinical hold status with the FDA, an update on the clinical development plan for our next NASH trial, a couple new Key additions to our Leadership Team, additional clinical Life Cycle efforts, that are ready to preserve and enhance the value of Leronlimab and its derivatives, a financial update, they will be exempted, by Antonio and we will conclude with a Q&A session that will address questions that were submitted prior to the Webcast and as a reminder, we generally accept questions ahead of our scheduled quarterly updates, and we do our best to address some through the prepared statement and then provide further clarification at the end of the webcast.
03:58: As usual, before we begin, I want to remind everyone, of CytoDyn's mission: and I do this because, for many of us, this is why we choose to be here at CytoDyn and frankly not somewhere else, right? We believe we have a moral obligation to generate therapies, to improve people's lives, and we firmly believe that Leronlimab and the various derivatives that are being generated from it, fall in the category of therapies that can improve people's lives. We achieve this through a focused and disciplined development strategy, and in doing so, we will create a value generating path that will result in economic returns for our investors. This is why we are here. This is why we show up every day. This is why we do the work we do for patients and for our shareholders.
04:51: So turning now to our primary topic: which is the status of the partial clinical hold from the FDA. As a reminder, for everyone on the call, in March of 2022, just over a year ago, the FDA's division of AntiVirals within the offices of Infectious Diseases placed a partial clinical hold on the Company IND HIV program and a full clinical hold on a separate IND for our Covid 19 program. Though, at the time, CytoDyn was not actively enrolling new patients under either the INDs that were placed on Hold, and we choose to voluntarily withdraw the INDs for the Covid 19 program. We subsequently made the business decision to no longer develop leronlimab in Covid 19 patients. Since March 2022, we have been working diligently to resolve the partial clinical hold on the HIV program, and also taking time to insure that we were putting in the appropriate care and attention required to address the FDA's concerns. Part of this entailed successfully working through data access, data formatting issues, related to the CRO that was responsible for collecting and managing the clinical data, that we actually needed to address the FDA's concerns.
06:13: From the original Partial Hold Letter, that we received in March 2022, the FDA had identified various items that needed to be addressed as part of a complete response to that clinical hold. I'll go through those items now. and Provide you an update on the status, where we are at. So the FDA requested an updated investigator brochure, there was a request to come to compliance with annual reporting requirements for all the active INDs with adequate quality annual reports which we agreed with the FDA to address through annual development safety update reports, SARS. There has been a further request for a safety management and pharmacovigilance program, to find a place for an aggregate safety data analysis which included an analysis of all cardio vascular events across all the clinical trials that involved Leronlimab. This was further expanded to include all system that we had data on and also the benefits / risks assessment for the HIV population being studied as part of that indication.
07:42: It is important to note, that with the exception of the benefits/risk analysis for the HIV indication, we took the items that had been requested by the FDA, really needed to be addressed regardless of the indication for or the disease being studied. During the 3rd fiscal quarter which ended at the end of February 2023, we submitted the documents that were requested by the FDA, in the original March 2022 partial clinical hold letter. Subsequently, the FDA responded to us, through written communication, requesting some additional information and clarification regarding the benefits / risk assessment for the HIV population and made an additional supplemental requests that we, the company, also provide a general investigational plan for the HIV program IND going forward. So, in March 2023, just last month, we responded and submitted the additional information, and the clarifications requested for those 2 items. The FDA then responded back with a 3rd further written communication to us, again relating to the benefit / risk assessment as well as requesting submission of a new Protocol for HIV indication to be studied once the Partial Hold is lifted or some clarification that CytoDyn may not continue to develop Leronlimab in that indication.
09:24: So, at the end of March 2023, just last month, we had, an informal meeting with the FDA, where the agency clarified some of our more specific questions with respect to the information that we would like to see addressed. The risk / benefit portion, of the clinical hold and work on finalizing the supplemental submissions to address the items that we discussed with the agency during that informal meeting and we remain fully committed to the submission of the complete response to lift the partial clinical hold for that indication.
10:05: This brings us to our next topic: which are the development plans for a subsequent NASH trial. So, in parallel to, the work that I just described, we are also developing a clinical synopsis for our next NASH program. While the IND for the NASH program is issued by the division of Hepatology and Nutrition from a different office within the FDA, in this case, the office of Immunology and Inflammation and it is technically, not directly impacted by the existing Clinical Hold on the IND side, as a company, as a sponsored clinical trials, we intend to insure that we are going to make all potential sponsor responsibilities related to safety reporting that could be requested by the division of Hepatology. So, as such, we plan to request, a Type B meeting with the division to concur on the design and a proposed clinical trial for the next NASH study. We would then subsequently plan to submit a protocol amendment to the existing NASH IND and include any and all supporting documents that would pertain to patient safety. That would allow us to begin new investigations within that NASH clinical population. So then, we are committed to working with the regulators to develop leronlimab in NASH and in other indications, specifically in oncology, as we have previously discussed, and we're preparing these materials for the regulators.
12:00: We are also taking the appropriate steps to insure that we have the proper personel in house to execute on our clinical plans. And so this includes the recent addition of Jane Conlon Werner as our new Executive Director of Quality. I think we are incredibly fortunate to have been able to recruit Jane to join us here at CytoDyn. She has extensive experience in Clinical as well as CNC Quality and compliance function review. At, both, large Biopharmaceutical companies and smaller Biotech companies like CytoDyn and I really think that Jane's experience in these areas is going to be critical to future clinical success and that work timing ??for her. This really demonstrates our committment to insuring quality and compliance across the organization.
12:56: Additionally, we have also firmly established Dr. Scott Hansen as our Head of Research and Basic Science. Dr. Hansen is currently an Associate Professor at OHSU. and within this newly formalized role, Dr. Hansen will support our clinical development activities, related to biomarker and assay development for future clinical trials, as well as supporting and leading some of our earlier staged efforts, geared towards the development of longer acting molecules targeted to CCR5.
13:33: As a part of those efforts, we have also recently entered into a joint development agreement with a 3rd party Research and Development Bio-Tech company to develop long acting or more longer acting molecule CCR5 blocking. So, in addition to potentially leading to a improved or modified therapeutic, that, we believe that has greater acceptance by those patients and physicians and this could help to yield extended intellectual property section that would increase the underlying value of our patent portfolio.
14:13: So we are pleased Dr. Hansen joined the team. He is here with us on this call. And I'll turn over to him now so he can elaborate further on his backround, and his experience with Leronlimab in his own lab. Scott?
14:33 Scott Hansen: Thank you Cyrus. I have about 25 years of experience in the fields of virology, oncology and immunology. At OHSU, I currently lead one of the largest and prominent, non-human primate research labs in the country. My laboratory covers a remarkable breadth of work including research projects on malaria, numerous viral and bacterial diseases, immunology and cancer. As you all know, many of these research areas, that I'm studying are relavant to CytoDyn's own development plans. However, what I am most known for, is developing Cytomegalo Virus or CMV as a next generation vaccine platform. Based on this technology, I helped cofound a small BioTech company, preserved the IP around the new vector platform, and take it through the clinical development process. Till I took the new clinical development process for the CMV vector platform, I created a quality system, to write QA, QC oversite of my laboratory, and basically, what that means if you are not in this space, it uses good documentation and good clinical laboratory practices, so that the results from the assays from the laboratory can be recorded to the regulatory agencies such as the FDA. I think that the system is really important for supporting ongoing research studies and clinical trials for CytoDyn. I think it could be very helpful.
16:00: So how did I come to work for CytoDyn? It has actually been 2 years ago, in March, 2021, Dr. Jonah Sacha, a collegue of mine at OHSU, and long time collaborator with CytoDyn, asked me to help with the Receptor Occupancy and BioMarker analysis for Leronlimab on an exploratory basis. I was blown away by the data we were generating at the lab. I'm kind of embarrassed to say, but at the time, I didn't know much about Leronlimab, besides that it was a monoclonal antibody, against a CCR5 receptor, and that it was used to prevent HIV infections. So what I was observing in the laboratory from the experiments I was doing, there was numerous Immuno-modulatory effects including possible immune cell proliferation, calcium signaling, monocyte proliferation, CCR5 receptor stabilization. Can probably go on and on about this. Something I kind of keep down a lot about but, I told Cyrus that I would try to keep this brief and short.
17:15: One of the things I wanted to share related to this is that one of the first conversations I had related to this with CytoDyn leadership after running a few half days in the laboratory, they told the leadership team, this isn't just a molecule to prevent HIV, it is much more than that. Which I think I got a few people in the room to chuckle, because I think obviously, they already knew that. Basically, why I'm telling you this, I was hooked from that point on, and ever since, I've been taking a deeper dive into the mechanism of action for the various disease states including HIV, NASH and Cancer. For each of these therapeutic areas, I believe there is actually a mechanistic rationale for the use of Leronlimab. And that is actually why I am here to re-iterate what Cyrus said earlier. This is why I became a scientist. This is why I am here. I think this a phenominal molecule.
18:11: So today, data that we generated has been used in 3 manuscripts. Two are currently published and one currently pending publication. And I am pleased to say today that Dr. Sacha and I have recently began working on a 4th manuscript. And I think it is important to get these manuscripts out there because they really demonstrate the potential therapeutic use of Leronlimab in these disease states. I am excited to join the company in a more official capacity. I think one of the big questions people may be wondering, is if I will be leaving OHSU? and the answer is No. At least, not at this time. CytoDyn does not currently have the necessary laboratory space for me to be effective and in position and provide research, support for mechanism of action in upcoming clinical trials. I basically need a laboratory. OHSU and CytoDyn already have a strong relationship. Our work is supported by ongoing sponsored research agreements and at this time, will continue with the arrangement. Thank you again Cyrus, for the opportunity and I look forward to working with everybody in the company in a more formal capacity and basically getting the job done.
19:30 Cyrus Arman: Thank you Scott, we are incredibly excited to have you on the team in this more formal capacity and we are incredibly fortunate that you and Dr. Sacha continue to colaborate along with OHSU in general on the development of the molecule and potential longer acting derivatives for the molecule. While we brought in Jane and Scott to the team, we continue to seek out a new Chief Medical Officer. We fully intend to make that hire once we find the appropriate candidate. That remains an ongoing search for us. I'll now turn the call over to Antonio Migliarese our CFO for our financial update.
20: 27 Antonio Migliarese: Thank you Cyrus. Good afternoon all. I'll be providing a brief financial update today. As everyone is aware, yesterday we filed our 10Q for the quarter ended February 28, 2023. Today, we will be touching on some select financial information and data from that filing. As we plan on touching on only some select financial information, we encourage listeners to visit the company's website and access the form 10Q in its entirety for a full understanding of the company's full financial results and position. This is accessible via our website. ...
21:28: In our most recent 10Q filing, filed yesterday, we demonstrated a continued support of investors through financing and fund raising activities and the company's continued focus on aligning the availability of capital with the needs of the business while continuing to judiciously manage and reduced expenses with focused spending. We posted the cash collateral required for the Amarex surety bond which will remain classified as restricted cash until the Amarex litigation is resolved. Most importantly, this resulted in the release of the liens on the company's patents which were previously secured by the cash collateral posted by an investor which has now been replaced. Having this restricted cash sitting on our balance sheet strengthens it.
22:12: The company has retired an additional $3 million of outstanding convertible debt in exchange for common stock. Further, we recently agreed with the note holders, to extend the maturity date of these notes 2 years, until April of 2025. As part of the extension, the company agreed to 2.5 extension fee which increases the outstanding balance, however, this extension provides the company the flexibility and allows it to remain in good standing with the note holders and the terms of the note.
22:45: Our reported cash balance as of February 28, 2023 consisted of approximately $5.1 million cash and additional $6 million restricted cash. Our cash balance as of last year end was May 31, 2022 was $4.2 million. The increase in cash has been a result of recent fund raising efforts and our continued committment to reduce ongoing operating expenses. Cash proceeds provided by financing transactions for the 3rd quarter and year to date were $14.7 million and $28.6 million respectively compared to $4.6 million and $40.1 million for the same periods in fiscal year 2022. We continue to be focused on stretching and making funds last as long as possible in order to be as opportunistic as possible with our financing efforts.
23:38: Cash used in operating activities for the 3rd quarter and year to date were $6.2 million and $21.7 million respectively compared to $11 million and $71.7 million for the same periods in the prior fiscal year. The significant improvement in cash used in operating activities is primarily related to an improvement in the company's operating model. In particular, GNA and R&D expenses offset by payments to outstanding vendors. I will focus on our operating loss today as most of the other expenses included in our net-losses are non cash expenses. Operating expenses for the 3rd quarter and year to date in fiscal year 2023 were $3.9 million and $36.8 million respectively compared to $19.4 million and $66.6 for the same period in fiscal year 2022. The decreases were primarily related to the significant reductions in GNA, R&D, and pre-launch inventory write offs except for the year to date period which was offset by an increase in inventory write offs. The decrease in GNA expenses was primarily related to reduction in legal fees, personel costs, abstence of the prior fiscal year proxy, and insurance premium offset by increase external auditor costs. The decrease in R&D expenses was primarily driven by the completion costs of closing of clinical trials and activities which were on going in the previous fiscal year, Covid 19, NASH, HIV, Oncology, and HIV BLA, offset by expenses related to the clinical hold related work.
25:22: The increase in the inventory write offs for the 9 month period was primarily due to the withdrawl of the BLA during the second quarter and the company's inventory no longer qualifies for inventory capital association for accounting purposes. I'd like to note that although the inventory is not being accounted for, on our books, we are still physically maintaining the inventory and it is "in good standing" to be able to be used for future clinical trials. Moving forward, starting with the next 10K filing, our deadlines will be changing. Our 10K will be due 90 days after year end and the 10Qs will be due 45 days after each quarter ends. This due to the company's filed leap status changing to a non-accelerated filer. As we continue to advance the organization forward, we will be continued to be focused on judiciously managing expenses, continuing to identify potential opportunities for value creation, and identifying diluted and non diluted financing alternatives. Similar to all other pre-revenue Bio-Tech companies, we require significant capital to support our future success. The current board and management are committed to raising capital at the most advantageous time and terms available. By using the capital raise to support focused execution the clients business objectives, which we believe will result in maximum value creation over time.
27:00: Cyrus Arman: Question and Answer:
Christina: Has the safety hold been lifted? If not, then Why? What are the current trial plans?
Cyrus: At the current time, the partial clinical hold for HIV remains in place. Based on our most recent interactions with the FDA, we believe that we do have a clearer understanding of the information requests regarding the benefit / risk assessment for the HIV MDR population in question. As well as the additional forward looking general investigation planned along with a full clinical protocol that has been requested by the agency. As I mentioned earlier, we are working on finishing that supplemental submission to address those items.
Christina: If the hold is not lifted, is it a vital part for proceeding with any of the other indications including HIV and NASH?
Cyrus: So the IND for the NASH clinical program is issued through a different division of the FDA, and it is technically, not directly impacted, by the existing partial clinical hold. For HIV, there are certain small term reporting requirement for any clinical trial to proceed and some of those requirements included the type of documentation that we were asked to prepare as part of the complete response to the clinical hold. So with that in mind, we are currently preparing materials for re-initiation clinical trials in NASH as well as the complete response on the HIV side. So these things are happening in tandem. Simultaneously.
Christina: Has there been actual client enrollment from any clinical trials and if so, which one?
Cyrus: CytoDyn has conducted over 20 clinical trials across several major therapeutic areas including infectious diseases, immunological conditions, various cancers, and through all of these trials, which have been conducted under INDs, with various divisions of the FDA, we have collected data on over 1,500 patients who have been exposed to Leronlimab and that is the data that forms the basis for much of the data submission that we are now providing the FDA.
Christina: Does the company have any data as to the long term consequences of CCR5 blockage? What are the clinical ramifications of this?
Cyrus: I have to be clear that despite the large number of patients that have received Leronlimab, the clinical program that I just mentioned, Leronlimab has not received any full regulatory approval for use by the FDA or any other agency and so I essentially can not make any definitive conclusions or statement about long term efficacy or long term safety of the drug. What I can say anecdotally, is that there are a fair number of patients who are enrolled in CytoDyn's sponsored extension trials for the CD01 and CD02 and CD03 programs who had been receiving Leronlimab as a long term viral suppression therapy for many years. And all of these patients safety data are included in the aggregate safety summary which has been submitted to the FDA for their review. So we haven't seen anything in our analysis that is bad by the FDA currently.
Christina: Any update with Arbitration with Amarex? And the Damage claim against Amarex?
Cyrus: We anticipated that this would be a question that would come up. I'll take a moment to provide who Amarex is, and what happened and what our company's relationship is with Amarex. Amarex previously served as CRO for CytoDyn starting in or around 2014 providing management and consulting services for nearly all of CytoDyn's clinical trials involving Leronlimab and during that time Amarex managed about 20 different CytoDyn sponsored studies. Among other issues, following the discovery of certain specific oversights associated with a prior submission to the FDA, it became increasingly apparent to CytoDyn that Amarex is not performing its services on par with industry standards or in some cases not at all. Over the past 12 months, we were able to obtain a 3rd party audit, which we discussed previously, which confirms these suspicions and uncovered significant non performance and under performance by Amarex. We believe that this conduct and underperformance results in a clear breach of contractural agreements between the 2 parties. We are in the process of seeking damages related to that breach of contract. In terms of where we are from a proceeding stand point. We have already filed the claim against Amarex. In those proceedings, among other claims for damages, we would be seeking reimbursement for services that were invoiced by Amarex and simply never performed and services that were negligent or services that were performed well below industry standard. We continue to pursue that. this case and we look forward to the opportunity to present more fully, but do to the fact that this is still pending legal matter, there is not much more we can say at this time.
Christina: Thank you Cyrus, no additional questions.
Cyrus: We continue to expect 2023 to be a catalyst for the year. This includes the resolution of the partial clinical hold for HIV, the addition of the CMO to the team, the initiation of a new NASH trial and the continued development of the longer acting CCR5 molecule, the potential being to increase the value of our patent portfolio and at the proper time, do a corporate rebranding as well.
Thank you all for your time today. Look forward to speaking at the next quarterly update or potentially sooner if needed. Thank you.
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