The biotech CytoDyn (OTCQB:CYDY) has resolved a legal dispute with Dr. Richard Pestell, the company’s former medical officer who had been “fired with cause” in July 2019.
Today, CytoDyn announced that it had reached a “non-cash settlement” with Dr. Pestell, agreeing to release 8.3 million shares of its stock held in escrow.
In August 2019, the Australian oncologist and endocrinologist Pestell filed a legal complaint with claims related to wage collection, breach of contract, declaratory judgment, wage collection and defamation.As part of its settlement with Pestell, CytoDyn will also transfer assets acquired from ProstaGene in 2018.
Pestell was the founder and CEO of ProstaGene from February 2011 to November 2018.
A 2018 SEC document cites Pestell as the “Stockholder” of ProstaGene, while Pestell served as vice chairman of the board, chief medical officer and board member at CytoDyn from September 2018 to Jul 2019.
The company also agreed to offer seven million shares of its stock at $0.37 per share.
CytoDyn also noted that it was “exploring ways in which Dr. Pestell can reengage with the Company to help realize (lead candidate and CCR5 inhibitor) leronlimab’s full potential in oncology.”
CytoDyn also stated in a news release that it “regrets Dr. Pestell’s departure from the Company and the subsequent public statements made by its former CEO about Dr. Pestell.”
“We are pleased to resolve this matter as part of our comprehensive efforts to restore credibility with the medical and scientific communities,” said Antonio Migliarese, chief financial officer and interim president, in a news release. “We look forward to the opportunity to utilize Dr. Pestell’s expertise to further the development of leronlimab.”
CYDY shares ticked up 7% to $0.34 in afternoon trading.
Filed Under: Drug Discovery, Oncology