Nader Pourhassan has been ousted as CEO and president by the board of directors of embattled Vancouver, Wash.-based CytoDyn, the company announced Tuesday. Chief Financial Officer Antonio Migliarese will serve as interim president while the company searches for a new CEO.
Pourhassan’s termination comes as the company faces investigations from the U.S. Securities and Exchange Commission and the U.S. Department of Justice. The company was also strongly rebuked by the U.S. Food and Drug Administration in May.
The FDA chastised the company for its claims about an experimental drug, leronlimab, which it tested in a failed clinical trial for COVID-19. The rebuke was followed by subpoenas from the SEC and the DOJ for documents related to company statements about the use of leronlimab in HIV, cancer, and COVID-19, as part of ongoing investigations.
“Landing in trouble with the FDA, SEC, and DOJ in a single year is one helluva biotech bingo card,” said STAT News in its annual roundup of biopharma’s “Worst CEO’s” – which included Pourhassan. And if that was not enough, the company also last year faced lawsuits from shareholders and a failed attempt at a board takeover by activist shareholders.
The takeover bid provided an even weirder twist to CytoDyn’s year. The takeover attempt was led in part by former CytoDyn advisor Bruce Patterson, a physician and CEO of diagnostics company IncellDx. Patterson is also affiliated with the Front Line Covid-19 Critical Care Alliance, which endorses the ineffective drug ivermectin to treat COVID-19 in protocols he helped develop. Patterson treats patients using IncellDX products, according to a report in Mother Jones.
In a lawsuit over the takeover bid, a Delaware judge said that the shareholder group did not provide information about an “obvious conflict.” Patterson had previously lobbied CytoDyn to buy IncellDX. “The board legitimately suspected that Patterson and others were keen on revisiting the failed attempt to combine IncellDx and CytoDyn,” the judge said.
According to the Portland Business Journal, Pourhassan earned $10 million in compensation last year, more than any other Portland-area executive except those working for Nike. Board director Jordan Naydenov earned close to $1 million.
The company has ongoing clinical trials of leronlimab for several conditions, but in a recent report to the SEC the company said “our cash reserves are extremely low,” Fierce Biotech reported. The company’s stock rose sharply earlier in the year, buoyed by hopes that leronlimab might be effective against COVID-19, and has since dropped substantially.