Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug developer, has already delivered a win for Wealthpress subscribers from our 1st feature returned in April this season. Billions have been invested straight into a huge selection of biotechs all competing to create a medicine or perhaps treatment for serious COVID 19 instances that result in death, as well as none have succeeded. Except Cytodyn, if early indications are established in the present trial now underway.
But after a deep dive on the company’s monetary claims and SEC filings, an image emerges of business management operating who have a “toxic lender” to funnel severely discounted shares to the lender regularly. An investment in Cytodyn is a strictly speculative bet on my part, and when the anticipated upward price movement does not appear after results of the company’s stage 2b/3 trial for severe-to-critical COVID 19, I am going to exit the investment.
In case the company’s drug does actually reliably spend less lifestyles in severe-to-critical COVID19 patients, then a groundswell of investor assistance may push the business into new, higher-grade human relationships, which would permit for the redemption of elimination and debentures of reliance on fly-by-night financings for example those described below.
Cytodyn’s sole focus is actually creating treatments used on a monoclonal antibody known as “leronlimab”, technically referred to as “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor type 5 (CCR5)”. This particular engineered antibody was purchased from Progenics Pharmaceuticals as “PRO 140”, a recently-acquired subsidiary of Lantheus Holdings Inc (NASDAQ:LNTH), back in 2012.
Total price of acquisition amounts to ten dolars million and a five % net royalty on business sales.
The drug was acquired on its first promise as an HIV therapy, for which continued research as well as development by Cytodyn has shown the capability to reduce regular drug cocktails with myriad pills into a specific monthly injection, sometimes, with 0 unwanted side effects. To date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific staff has discovered the antibody’s effect on the CCR5 receptor has incredibly optimistic therapeutic implications for everything from some stable tumours to NASH (Non-alcoholic steatohepatitis), the liver function condition which afflicts up to twelve percent of the US public, and up to twenty six % globally.
But the real emergent and potentially transformational application for leronlimab, as stated at the start, (which is already getting branded as Vyrologix by Cytodyn), is made for the Acute Respiratory Distress Syndrome (ARDS) due to COVID-19 which precludes the Sequential Organ Failure in fatal instances of COVID infections.
Leronlimab it seems that blocks the CCR5 receptor from over responding to the virus as well as launching the today household word “cytokine storm”. Some proportion of patients obviously return from the brink after two treatments (and in a number of instances, 1 treatment) of leronlimab, even when intubated.
The company finished enrollment of a stage 2b/3 trial on December 15 to “evaluate the efficacy and safety of leronlimab for patients with severe-to-critical COVID-19 indications is actually a two-arm, randomized, double blind, placebo controlled, adaptive style multicenter study,” based on the company’s press release.
This trial period concluded on January 12 ish, and if the results are good, this can make leronlimab a top therapy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines that are now diffusing are certainly lending optimism for a normalization of society by mid 2021, the surging worldwide rates of contamination suggest the immediate future is already overwhelming health care systems throughout the world as a lot more men and women call for access to Intensive Care Unit hospitalization.
During my first interview with Dr. Nader Pourhassan back in March of 2020, the serious enthusiasm of his for the prospects of this drug’s effectiveness was evident.
It was prior to the now raging second wave had gathered vapor, and also he was then noticing individuals who were receiving leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
At the time, even thought, this small independent biotech without any major funding and a decidedly unhappy public listing on the naked short-sellers’ dream OTC marketplace was getting ready to apply for a listing on NASDAQ, and the deck was stacked from it.
Full Disclosure: I have 10,000 shares at an average expense of $6.23
Although the planet concentrates breathlessly on the optimism for a brand new vaccine to regain the social liberties of theirs, the 10 ish fraction of COVID infectees who descend into the cytokine storm driven ARDS actually have their day saved by this apparently flexible drug. To them, a vaccine is pretty much pointless.
This particular drug has “blockbuster potential” authored all over it.
With 394 people enrolled inside the Phase 2b/3 trial as of December 16, along with first information expected this week, any demonstrable consistency in the details will record the world’s interest in probably the most profound way. Quick sellers could be swept aside (at least temporarily) simply because company’s brand new share priced levels qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses all set for sale right now, with an extra 2.5 huge number of ordered for each of 2021 as well as 2022 in a manufacturing understanding with Samsung, according to its CEO.
really if leronlimab/PRO 140/Vyrologix is so great, why the stock’s been stuck in sub-1dolar1 five penny stock purgatory for such a long time?
The speedy remedy is “OTC”.
Apart from faced with a share price under three dolars, the company hasn’t been in a position to meet and maintain certain other quantitative prerequisites, including good shareholders’ equity that is at least $5 million.
But in the NASDAQ world, one can find non-quantifiable behaviours by organizations that can cause slow downs to NASDAQ listings. Overtly advertising communications are among these kinds of criteria that will never result in a refusal letter…nor a NASDAQ listing.
More to the point, Cytodyn has additionally not been in a position to access capital under traditional means, thanks to its being listed on the OTC, and thus un attractive on that foundation alone to white shoe firms.
Thus, they’ve been cut down to accepting shareholder hostile OID debentures with unsightly sales terms that generate a short-seller’s wet dream.
In November, they borrowed 28.5 million coming from Streeterville Capital of which just $25 million was paid to the company; $3.4 huge number of will be the discount the Streeterville areas, and $100k is actually set aside to protect the expenses. Streeterville is linked with Illiad Trading and Research, which is controlled by John Fife of Chicago Ventures Inc. Iliad has been termed as a “legendary so called toxic lender”, by rival studies firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the deal, Cytodyn needs to pay back again $7.5 million every month. In case they don’t have the cash, they pay inside stock; the majority of not long ago, within a sales price of $3.40 a share.
These days just imagine when you are an opportunistic low rent lender and you’ve received an assured 2.2 million shares coming your way in the first week of each month. Any price tag above the sales cost is pure profit. Remember – this guy isn’t an investor; he is a lender.
He is not operating on the hope that Cytodyn stock may go parabolic if leronlimab is deemed a remedy for ARDS; his business model is to limit risk and maximize upside through affordable transformation of share.
This’s the quick seller’s wet dream I’m discussing. Not merely would be the lender enticed to go short, but any short trading pail repair shop in town who are able to fog a mirror and go through an EDGAR filing know that every month, like clockwork, there is going to be 2 million+ shares hitting the bid down to $3.40.
The SEC isn’t impressed, additionally, on September 3, 2020, filed a criticism.
The Securities and Exchange Commission these days filed charges from John M. Fife of Companies and Chicago he controls for acquiring and marketing much more than 21 billion shares of penny inventory without any registering to be a securities dealer with the SEC.
The SEC’s criticism, alleges that in between 2015 as well as 2020, Fife, and the companies of his, Chicago Venture Partners, L.P., Iliad Research in addition to the Trading, L.P., St. George Investments LLC, Tonaquint, Inc., and Typenex Co Investment, LLC, frequently interested in the company of purchasing sports convertible notes at penny stock issuers, transforming these notes into shares of stock at a large discount from the market price, and selling the freshly issued shares to the marketplace at a substantial profit. The SEC alleges that Fife and the businesses of his engaged in more than 250 convertible transactions with roughly 135 issuers, sold more than 21 billion newly-issued penny stock shares to the market, and obtained more than sixty one dolars million in profits.
Streeterville Capital is not mentioned as an entity in the complaint. Which suggests it was likely applied by Cytodyn as well as Fife to avoid detection by the SEC this same plan was being perpetrated on Cytodyn at the time of the complaint of its.
But that’s not the sole reason the stock cannot preserve some upward momentum.
The company has been selling inventory privately at ridiculously minimal prices, to the stage in which one wonders just who exactly are the lucky winners of what requires free millions of dollars?
Furthermore, starting in the month of November 2020 and also for each of the next five (5) calendar months thereafter, the Company is actually obligated to lower the outstanding balance belonging to the Note by $7,500,000 per month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes will be acknowledged to the transaction of each monthly Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the 15 % prepayment premium.
Also detracting from the business’s shine is actually the propensity of management for excessively marketing communications with shareholders. During an investor webcast on January 5th, the company had a compilation of sound testimonials from individuals applying PRO 140 for HIV treatment, backed by tear-jerking music, and then replete with emotional language devoid of information.
Even worse, the company’s telephone number at the bottom of press releases has an extension for Mike Mulholland, the CFO, and Nader Pourhassan, the CEO, but neither one particular is actually a “valid extension” according to the automated system.
That’s the type of approach that the FDA and SEC view unfavourably, and is likely at least in part the reason for the continued underdog status of theirs at both agencies.
The company has also turned out to be unresponsive to requests for interviews, and so while using story coming out less than only these ill-advised publicity stunts, shorts are actually attracted, and big cash investors, alienated.
But think of this specific “management discount” as the ability to buy a sizable position (should someone be so inclined) contained what may very well turn out to be, in a question of weeks, given that the top therapy for serious COVID19 related illness.
I expect the details from the trial now concluded for just such a sign could release the organization into a whole new valuation altitude that will enable it to overcome these shortfalls.
Average trading volume is actually continuous above 6 million shares 1 day, and right before the end of this week, we’ll find out exactly how effective leronlimab/PRO 140/Vyrologix is at saving lives from the worst of COVID 19. If the outcomes are positive, this could be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)