CytoDyn's Legal Battle with Amarex Settles for $12M

The legal conflict between CytoDyn and Amarex Clinical Research appears to be nearing resolution. CytoDyn recently announced a settlement on July 9, in which Amarex, a former partner, agreed to pay CytoDyn $12 million and cancel a $14 million debt.

CytoDyn CEO Jacob Lalezari, M.D., stated in a press release that the settlement benefits CytoDyn shareholders and significantly enhances the company’s financial standing. He emphasized that resolving the legal dispute would eliminate distractions and uncertainties, allowing the company to focus on advancing its clinical trials and research and development projects.

Amarex provided clinical research organization (CRO) services for CytoDyn, particularly for the clinical trials of leronlimab, a CCR5 receptor agonist used to treat HIV. Due to substandard data quality, the FDA halted all programs involving the drug. The hold on the HIV component was lifted in early February after two years, but CytoDyn had to withdraw its application for leronlimab as a combination treatment for patients resistant to antiretroviral therapy. CytoDyn attributed the poor data quality to Amarex and subsequently sued for damages.

As part of the settlement, Amarex has already paid $10 million to CytoDyn, with the remaining $2 million to be paid over the next 12 months. Additionally, a $6.5 million surety bond that CytoDyn had paid to Amarex was returned to CytoDyn, and the $14 million debt was canceled. This settlement concludes all legal claims between the two companies.

This legal battle is only one part of the turbulent history between CytoDyn and Amarex. In late 2022, the former CEOs of both companies were charged by the U.S. Department of Justice with defrauding investors. They allegedly lied about FDA submission timelines and exaggerated leronlimab’s effectiveness against COVID-19 to inflate CytoDyn’s stock price. Both former CEOs are scheduled for trial in November 2024.

Despite these challenges, CytoDyn continues to pursue the development of leronlimab. This year, the company has initiated preclinical studies of the drug in metabolic dysfunction-associated steatohepatitis (MASH) and glioblastoma, a type of brain cancer. CytoDyn anticipates releasing preclinical data on leronlimab’s use in MASH and beginning a clinical trial for glioblastoma later in 2024.