Biotechnology company CytoDyn has new leadership after its board of directors removed Nader Pourhassan as chief executive effective Jan. 24. The company’s chief financial officer, Antonio Migliarese, will be his interim president.
CytoDyn faced heat after testing its drug leronlimab to treat COVID-19. The U.S. Food and Drug Administration was compelled to issue a statement in May saying, “It has become clear that the data currently available do not support the clinical benefit of leronlimab for the treatment of COVID-19.”
The company used results from a small subgroup of test participants to suggest there was a “mortality benefit in certain patients” who took the drug, said the FDA’s statement.
“None of these analyses met statistical significance when using established and reliable analytical methods that correct for multiple comparisons.”
In the past year, CytoDyn also faced lawsuits and a board takeover attempt by shareholder activists, which failed. And, it was subpoenaed by the U.S. Department of Justice and the Securities and Exchange Commission regarding the company’s public statements around leronlimab as a treatment for COVID-19. Both subpoenas were disclosed in a July SEC filing.
In a January SEC filing, CytoDyn disclosed that the company’s cash reserves are “extremely low, requiring that we raise substantial additional financing to satisfy our current payment obligations and to fund our operations.”
The company failed to pay Samsung, one of its contract manufacturing organizations, $13.5 million that was due Dec. 31.
“We must raise substantial additional funds in the near term to meet our payment obligations and fund our operations,” read the filing. “If we fail to raise additional funds on a timely basis, we may be forced to delay, reduce the scope of, or eliminate one or more of our clinical trials or postpone our regulatory submissions and commercialization initiatives, which would adversely affect our business, financial condition and stock price.
“If we deplete our cash reserves, we may have no choice but to discontinue our operations and liquidate our assets.”
Pourhassan was the highest paid executive not employed by Nike in the Portland metro area, earning just over $10 million a year, according to the Portland Business Journal. He was appointed president and chief executive of the company in 2012, after serving as interim president for three months. He served as the chief operating officer and managing director of business development prior to that.
Before joining CytoDyn, Pourhassan taught college-level engineering at The Center for Advanced Learning, a charter school in Gresham. He holds a doctorate in mechanical engineering from the University of Utah.
Along with Pourhassan’s removal, Dr. Scott Kelly, chair of the board and chief medical officer at CytoDyn, announced he’d be stepping down as chair to allow the board to have more independence. He will, however, stay on the board of directors.
Tanya Durkee Urbach was elected as the new board chair. She is an independent director with experience in corporate governance, corporate finance, business growth and securities litigation, compliance and regulatory issues, said Kelly.
“We thank Dr. Pourhassan for his vision and passion for developing leronlimab into a platform molecule with the potential for multiple therapeutic indications,” said Kelly in a statement to the press.
A committee of board members has been charged with beginning the search for a new chief executive. The committee will be looking to find a candidate that has the required pharmaceutical industry experience in an effort to advance the company’s progress toward gaining regulatory approval and commercializing its drug leronlimab.
“Now is the right time for the next phase of CytoDyn’s evolution, as we focus on continuing the clinical progress of leronlimab and ultimately securing regulatory approval and commercialization,” said Kelly.
The board is focusing on finding the best candidate, said Kelly, adding that the search will be looking for someone with the right experience and skills needed to maximize the potential of its leronlimab drug for patients, partners and shareholders. CytoDyn’s leronlimab is a therapeutic antibody, which the company is studying for use in multiple areas including infections disease, cancer and autoimmune conditions.
