Nader Pourhassan, who led CytoDyn for nearly 10 years, was convicted in December 2024 of misleading investors regarding the biotech’s investigational COVID-19 and HIV drug, which artificially inflated its share price.
The Department of Justice has sentenced Nader Pourhassan, the former CEO of CytoDyn, to 30 months in prison after he was convicted of securities fraud and insider trading.
Pourhassan intentionally made misleading claims about leronlimab, an experimental antibody that CytoDyn was developing for HIV and COVID-19, according to a Department of Justice release on Monday. The ex-CEO’s scheme ran from 2018 to 2021 and served to “artificially inflate” CytoDyn’s stock price and attract new investors, the DOJ stated.
Pourhassan then sold 4.8 million company shares that he owned, earning $4.4 million in the process.
The former top executive “exploited a deadly public health crisis to intentionally deceive investors and the public out of millions—all so that he could enrich himself,” U.S. Attorney Kelly Hayes, for the District of Maryland, said in a statement. Aside from jail time, Pourhassan was also ordered by the court to pay more than $5.3 million in restitution and surrender over $4.4 million.
Leronlimab, a humanized IgG4 monoclonal antibody, was initially being developed for HIV before CytoDyn decided to pivot and propose the therapy for COVID-19. In May 2021, however, the FDA publicly contradicted these plans, noting that “the data currently available do not support the clinical benefit of leronlimab for the treatment of COVID-19.”
The rebuke came after leronlimab failed a Phase III study in March 2021, unable to significantly boost survival in hospitalized COVID-19 patients versus placebo. Pourhassan nevertheless dug into the data and put a positive spin on the outcomes. “We believe these results are the best results ever achieved for this population in a Phase 3 clinical trial,” he claimed at the time.
Monday’s sentencing comes after a federal jury in Maryland in December 2024 found Pourhassan guilty of four counts of securities fraud, two counts of wire fraud and three counts of insider trading. Alongside Pourhassan, the jury also found guilty Kazem Kazempour, who at the time of Pourhassan’s scheme was CEO of Amarex Clinical Research, a third-party contract research organization that ran CytoDyn’s studies.
Kazempour, according to the original complaint, collaborated with Pourhassan and earned more than $340,000. Kazempour was convicted of one count of securities fraud and one of wire fraud—though these have since been vacated, according to a press announcement from the law firm representing Kazempour last Thursday. He will face a new trial, according to the statement.
Pourhassan became CytoDyn’s CEO in September 2012 and held that post until January 2022, when the company’s board of directors voted to let him go and search for another executive that could better lead the commercialization of leronlimab.
