Replies to post #25951 on Cytodyn Inc (CYDY)

[Bored Lawyer]

Thanks for posting.

[BlackDoggie]

Spot on. Material funding is clearly paramount at this point. Hopefully we hear something sooner rather than later.

[buckysherm]

Damn !

[Amatuer17]

Expect further delays

He does not have funds just to move CMO activity forward - he is talking acquisition and starting cancer trial and may need pivotal trial.

[finesand]

Inov- Spot On ($15M CMO Costs etc) (edited)

So here is our (01 and myself) initial 10-K summary, which indeed explains a lot of the delays. Spoiler: They just don't have the funding, which would be about $100M (incl safety) for CD02 + CD03 and all related costs to walk through approval alone.

Comments in italic brackets by 01

Financials http://archive.fast-edgar.com//20180727/AP2ZK62EZM2R9ZZZ2R2M2ZXMB2KGZZ22ZIA2/#tx840102_51
- Current liabilities are $16.73M
- $13.16M equity deficit
- $50M+ net loss roughly doubled from 2017

- Net cash used in operating activities $30M '18, $27M '17
- $7.5M per qtr
- Plus the increase to $16.73M current liabilities '18 from $6.14M '17 -> +10.6M
- So annual real burn: $11M + $30M = $41M or $10.25M per qtr

- Now add the acquisition (dilution) and new pipeline (dilution + burn)

Discussion http://archive.fast-edgar.com//20180727/AP2ZK62EZM2R9ZZZ2R2M2ZXMB2KGZZ22ZIA2/#tx840102_11

- (ProstaGene Acquisition Still Undefined:) The transaction is subject to completion of due diligence review, customary definitive documentation, deal structure and requisite corporate and regulatory approvals. The final terms of the transaction will be available upon the execution of definitive documentation.

- CD02: Management projects that the total estimated costs for this trial, including the open label portion, may range from $12 million to $13 million.

CD02-Ext: management estimates the cost of this study to be approximately $5 million to $6 million.

CD03: We are currently evaluating a higher dose arm (525 mg), with a 50% increase from the original dosage (350 mg), as well as a 700mg dose. We believe that a higher dose will result in a higher response rate, which is supported by preliminary data.
The estimates for the total cost of this trial currently range from $22 million to $25 million, but such estimates will be updated upon the determination of the increased number of sites, the rate of patient enrollment and the overall duration of the trial, all of which could cause the total trial costs to vary. We expect enrollment to be completed in 2018, subject to the foregoing variables
(Enrollment done end of 2018 PLUS 48 weeks trial)
(Maybe done end of 2019!)


GvHD: In March 2018, we announced that the IDMC for our PRO 140 Phase 2 trial in GvHD had completed a planned interim analysis of trial data on the first 10 patients enrolled
amendments included switching the pre-treatment conditioning regimen from aggressive MA conditioning to an RIC, and switching from a blinded one-for-one randomized placebo-controlled design to an open-label design under which all enrollees receive PRO 140. The amendments also provide for a 50% increase in the dose of PRO 140 (to 525 mg) to more closely mimic preclinical dosing. The next review of data by the IDMC will occur following enrollment of 10 patients under the amended protocol after each patient has been dosed for 30 days. Management estimates the cost of this trial to be approximately $3.5 million to $4 million.

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The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company incurred a net loss of $50,149,681 for the year ended May 31, 2018 and has an accumulated deficit of $173,139,396 through May 31, 2018, which raises substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Liquidity and Capital Resources

Our Company’s cash position at May 31, 2018 decreased approximately $0.5 million to approximately $1.2 million, as compared to a balance of approximately $1.8 million, as of May 31, 2017. The net decrease in cash from a year ago was attributable to net cash used in operating activities of approximately $29.9 million, offset in part by net cash provided by financing activities of approximately $29.4 million.

As of May 31, 2018, we had negative working capital of approximately $13.4 million compared to negative working capital of approximately $23,000 at May 31, 2017, an increase in negative working capital of approximately $13.4 million attributable primarily to cash used in operations.

Due to our current liquidity condition, our CMO has suspended certain preparations for future commercialization activities which are integral for the timely completion of a BLA filing. Relations with the CMO remain accommodative and resumption of certain CMC activities will be contingent on a material improvement in our liquidity. * Certain other CMO activities related to BLA preparations remain on schedule at present, and provided liquidity improves, we are confident that existing BLA schedules will be maintained. Several qualification batches that may be commercially suitable remain on schedule for year-end 2018, but may be delayed into early 2019, unless liquidity improves in the near future.
(WOW)
(so money is the biggest concern and reason for the big delay now)

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Capital Requirements

The future trends of all expenses will be driven, in large part, by the future outcomes of the clinical trials and their correlative effect on general and administrative expenses, in addition to the manufacturing of new commercial PRO 140, along with the increasing activities to prepare and file a BLA. We will require a significant amount of additional capital in the future for our clinical trials and to advance our manufacturing activities of PRO 140 necessary for completion of our BLA filing. (sure)

CMO undertakings are anticipated to require approximately $15 million of additional capital over the next several fiscal quarters, including the estimated costs to fill, label, and package product into the final commercial package for commercial sale.
...
As of the date of this filing, it is management’s conclusion that the probability of achieving the subsequent future clinical development and regulatory milestones is not reasonably determinable, thus the future milestone payments payable to Progenics and its sub-licensors are deemed contingent consideration and, therefore, are not currently accruable.

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Notes:

So all in all, this is a bit like a developing miner unable to go commercial alone, doing analysis and paperwork until somebody buys them out or they find the funding themselves.

All above costs over ~12 month including approval work would be: $41M (burn above) + 15M CMO + $5.5M royalty milestone + $30M additional trial-burn and safety = about $92M for HIV-1 CD02 + CD03 alone - excluding new cancer pipeline and acquisition costs (purchase and running costs for new personnel).

Raising around $100M would be required for CD02 + CD03 FDA approval 'going alone' which also would fix the balance sheet of course. IMHO

/01


We will incorporate the 'going alone' financing need into the evaluation, surely hope it can be raise >= 50c NET