Biotech CytoDyn Inc. (CYDY) has announced an exclusive distribution and supply agreement with American Regent for its investigational Covid-19 treatment leronlimab in the United States.
Under the terms of the agreement, CytoDyn will supply leronlimab to American Regent for distribution, and receive quarterly payments based on a profit-sharing arrangement. American Regent is a Daiichi Sankyo Group company and a top-10 injectable manufacturer.
“Having this distribution agreement in place ahead of the readout from CytoDyn’s Covid-19 clinical trials further emphasizes CytoDyn’s commitment to making leronlimab immediately available to patients based on the successful completion of its ongoing clinical trials,” commented Nader Pourhassan, CytoDyn CEO.
CytoDyn is currently enrolling a Phase 2b/3 clinical trial for 390 severe and critically ill Covid-19 patients, which is a randomized, placebo-controlled with 2:1 ratio (active drug to placebo ratio).
The company has also completed its enrollment of a Phase 2 randomized clinical trial with 75 patients in the mild-to-moderate COVID-19 population.
Leronlimab is an investigational humanized IgG4 mAb that blocks CCR5, a cellular receptor that is important in HIV infection, tumor metastases, and other diseases.
Shares in CytoDyn have exploded by over 500% year-to-date, and top HC Wainwright analyst Yi Chen recently reiterated a buy rating on the company citing upcoming data readouts from the Covid-19 trials. Given the recent rally, his $4 price target now indicates 34% downside from current levels. (See CYDY stock analysis on TipRanks)
However, the analyst also referred to CYDY’s initiation of a Phase 2 trial of leronlimab for the treatment of non-alcoholic steatohepatitis (NASH) as a potential catalyst for the stock. “Initiation of this Phase 2 study shows leronlimab’s wide applicability across a variety of indications, in our view, and positive proof-of-concept results in NASH may drive additional upside to our current price target” stated Chen.
His current price target includes a discounted cash flow-based asset value of $2.4B for leronlimab in the HIV and COVID-19 indications, with 85% and 50% probabilities of approval, respectively, and 12% discount rate, 2% terminal growth rate, and excludes $23M debt.
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