CytoDyn Inc. (CYDY) Earnings Call Transcript & Summary

Greetings, and welcome to today's CytoDyn Investment Community Webcast. My name is Kevin, and I'll serve as your moderator today. [Operator Instructions]. As a reminder, this call is being recorded today, December 29. I'd now like to turn the call over to Cristina De Leon. You may begin.

Hello, everyone, and thank you for joining us today. This is Cristina De Leon with CytoDyn. Joining us on today's webcast is our President, Cyrus Arman. Before we begin, it is essential that we provide you with important cautionary language related to certain federal securities laws. Our remarks during today's webcast will include forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are difficult to predict. Actual results may be materially different from any future results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other matters, statements regarding leronlimab's potential efficacy in certain immunology and oncology indications; the status and potential consequences of regulatory actions and government investigations and inquiries; the company's ongoing ability to raise additional new capital that clinical trials may not commence or proceed as planned; products that appear promising in early trials may not subsequently prove to be viable on safety or efficacy grounds; products may not receive regulatory approval or market acceptance; competition may reduce the commercial potential of our products; we may experience product recalls, manufacturing issues or product liability; and our patents may be challenged or unenforceable. Although forward-looking statements help to provide complete information about the company, forward-looking statements may be less reliable than historical information. The company undertakes no obligation to update publicly these forward-looking statements, except as required by law. Please refer to our recent quarterly and annual reports filed with the Securities and Exchange Commission for more information about the risks and uncertainties that could cause actual results to differ materially versus our current expectations. I will now turn the webcast over to Cyrus Arman.

Thank you, Cristina, and thank you to our shareholders, analysts and the members of the media who have also joined us today. I want to take a moment to point out that we're not going to be taking any live questions during this call but that we plan to field questions during our next quarterly update. And during that call, we also intend to address ongoing business operations. So before we begin, I want to remind everyone of CytoDyn's mission, which I think is particularly relevant given the nature of the topics that we're going to be discussing today. We believe that we have a moral obligation to generate therapies to improve people's lives. We achieve this through a focused and disciplined development strategy. And in doing so, it creates a value-generating path resulting in economic returns for our investors. Okay. So turning now to the matter at hand. In light of the recent events in the last couple of weeks, I felt that it was imperative that I address concerns about CytoDyn's former CEO, Nader Pourhassan, the indictment filed by the Department of Justice and the complaint filed by the SEC. Now I want to begin by saying that I had not only anticipated and was prepared that these events could occur, but I also actually countered for this possible outcome when I did my initial due diligence of the company before joining, even if the exact timing of the indictment wasn't clear before last week. So my primary concern is and always will be the health of the company, and it's my strong personal belief that these events are in no way considered to be determinative to the continued development of leronlimab and the company's potential in the coming years. As we previously disclosed, we've been working and cooperating with the DOJ and SEC in their respective investigations. Now last week, on December 20, the government's charging documents were made available to the public. These documents outlined a number of charges by both the DOJ and SEC against Mr. Pourhassan as an individual. The company had previously terminated Mr. Pourhassan's employment on January 24 of this year, and he's had no affiliation with our company since that time. The charges brought by the DOJ and SEC against Mr. Pourhassan center around what we believe is really best viewed as an individually orchestrated effort for personal gain. It included allegations of misleading representations regarding the time line for the submission of the BLA as well as the completeness of the prior BLA application as well as information regarding leronlimab and its use in COVID. So as discussed in my prior calls, for various business reasons, the company has withdrawn the BLA and has since made the decision not to pursue COVID-19 at this time. So really, we see this indictment as simply just the natural progression of an investigation that was initially disclosed in the company's 10-K filing in July 30 of last year in 2021. I look forward to continuing to cooperate with the regulatory agencies and being able to fully close out this process for the company in the coming months. In the meantime, we will continue to work on developing leronlimab and generating value for our shareholders. But to be clear, I don't want the data that we've generated and observed in the clinical trials to get lost in all of these events. And it appears that a number of news articles that have been written over the last couple of weeks have actually conflated Mr. Pourhassan's alleged actions with the potential for leronlimab and the validity of the clinical signals that we've observed. And I'd specifically like to address that concern now. So as we discussed during our recent R&D update presentation, leronlimab has generated a number of very promising signals, and I believe it continues to test well in efficacy, tolerability and toxicity metrics. Our clinical signals and the process for generating such data, of course, will continue to be subject to the FDA's review and regulation and ultimately a product approval for the U.S. Now I want to be absolutely clear on this next point. The events of the last couple of weeks don't change my original belief that leronlimab is a uniquely promising drug with a highly compelling set of attributes that make it a really excellent potential candidate for clinical use in the future. And keep in mind that my basis for this belief comes from 15 years of industry experience and examining over 1,000 different clinical programs. As a company, we believe that the charges by the DOJ and SEC against Mr. Pourhassan, again, as an individual, really should be viewed as separate and distinct from leronlimab, the drug's potential and our plans to develop in the coming months and years. We do not believe that these allegations will serve in any way to undermine the continued development of the product. This is also a good time for us to highlight the fact that we're essentially an entirely new management team at this point, both at the executive management level as well as at the Board level. The Board and the management are fully committed to a culture of compliance from the top down, and we are entirely committed to our mission, which includes providing economic returns for our investors. So as a new management team, we've actually also performed our own reviews and assessments of the clinical data generated to date, and we found no evidence of data manipulation or falsification on any level. And I continue to have very strong confidence for the potential of leronlimab in our lead indications. And I'm also very excited about the potential of the long-acting CCR5 inhibitor that is being developed for HIV in addition to NASH and oncology. So as I mentioned earlier, and it's probably worth repeating, the company has and will continue to cooperate with the SEC and DOJ. And after consultation with our counsel, we don't have any further comments on the issues related to these legal actions against Mr. Pourhassan at this time. We expect next year, 2023, to be catalyst driven in terms of growth and development for the company. And we think that the table is set for a large number of significant developments to occur in early '23, including the submission of our complete response to the partial clinical hold for HIV, new additions to the leadership team, our corporate rebranding. And then following those events, we plan on initiating a NASH trial as well as continuing the advancement of the long-acting CCR5 molecule. So I, along with the rest of the team, we're very excited about the future of the company. We look forward to entering next year with a cleaner bill of health and a renewed focus on our mission. We think 2023 is going to be a positive milestone year. I want to thank you all for your time today, and I wish you all a happy New Year, and I look forward to speaking with you again at our next quarterly update call.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.