Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug designer, has already shipped a win for Wealthpress subscribers from our first feature returned in April this season. Billions have been invested into a huge selection of biotechs all competing to produce a medicine or maybe therapy for severe COVID 19 situations which trigger death, and none have succeeded. Except for Cytodyn, if early indications are established in the current trial now underway.
But right after a serious plunge on the company’s monetary claims and SEC filings, an image emerges of company management working with a “toxic lender” to funnel seriously discounted shares to the lender frequently. An investment in Cytodyn is actually a strictly speculative bet on my part, and when the anticipated upward price movement doesn’t appear following results in the company’s stage 2b/3 trial for severe-to-critical COVID 19, I will exit the investment.
If the company’s drug does in fact reliably preserve life in severe-to-critical COVID19 patients, then a groundswell of investor support can force the organization into new, higher-grade human relationships, which would allow for the redemption of debentures and elimination of reliance on fly-by-night financings for example those discussed below.
Cytodyn’s sole focus is actually developing therapies based on a monoclonal antibody known as “leronlimab”, technically referred to as “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor type five (CCR5)”. This engineered antibody was obtained of Progenics Pharmaceuticals as “PRO 140”, a recently-acquired subsidiary of Lantheus Holdings Inc (NASDAQ:LNTH), back in 2012.
Total price of acquisition amounts to $10 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 and development by Cytodyn has shown the potential to reduce regular drug cocktails with myriad pills into a specific monthly injection, in some cases, with zero unintended effects. To date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific team has realized the antibody’s impact on the CCR5 receptor has incredibly positive therapeutic implications for everything from some stable tumours to NASH (Non-alcoholic steatohepatitis), the liver function disorder which afflicts up to 12 percent of the US public, and up to twenty six % globally.
But the real emergent and likely transformational program for leronlimab, as stated at the beginning, (which is already getting branded as Vyrologix by Cytodyn), is made for the Acute Respiratory Distress Syndrome (ARDS) brought on by COVID-19 which precludes the Sequential Organ Failure wearing fatal situations of COVID infections.
Leronlimab apparently prevents the CCR5 receptor from over-responding to the virus and launching the now household word “cytokine storm”. Some proportion of patients apparently return from the brink following 2 treatments (and in some cases, 1 treatment) of leronlimab, even if intubated.
The company completed enrollment of a phase 2b/3 trial on December 15 to “evaluate the efficacy and safety of leronlimab for clients with severe-to-critical COVID-19 indications is a two arm, placebo controlled, double blind, randomized, adaptive style multicenter study,” according to the company’s media release.
This trial period concluded on January 12 ish, and if the outcomes are positive, this can make leronlimab a high remedy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
While the vaccines that are currently diffusing are definitely lending hope for a normalization of society by mid 2021, the surging global rates of illness mean the immediate future is already overwhelming health care systems throughout the world as increasingly more folks require ability to access Intensive Care Unit hospitalization.
During my first interview with Dr. Nader Pourhassan returned contained March of 2020, his extreme interest for the prospects of the drug’s success was evident.
It was prior to the currently raging next wave had gathered vapor, as well as he was then noticing individuals who were getting leronlimab under the FDA’s Emergency Investigative New Drug exemption.
Within the time, nevertheless,, this little independent biotech without significant funding along with a decidedly unhappy public listing on the naked short-sellers’ fantasy OTC marketplace was getting prepared to put on for a listing on NASDAQ, along with the deck was stacked against it.
Full Disclosure: I have 10,000 shares from an average price of $6.23
Although the planet concentrates breathlessly on the optimism for a new vaccine to restore their social liberties, 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. For these people, a vaccine is practically useless.
This particular drug has “blockbuster potential” authored all over it.
With 394 individuals enrolled inside the Phase 2b/3 trial as of December sixteen, and initially information expected this week, any demonstrable consistency in the information will record the world’s focus in essentially the most profound way. Quick sellers might be swept apart (at minimum temporarily) as the company’s new share priced amounts qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses prepared for sale right now, with an extra 2.5 huge number of purchased for each of 2021 plus 2022 in a manufacturing agreement with Samsung, based on the CEO of its.
The Downside
so 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 answer is “OTC”.
Apart from dealing with a share price under $3, the company hasn’t been able to meet and keep some other quantitative requirements, including good shareholders’ equity that is at least five dolars million.
But in the NASDAQ world, there are non quantifiable behaviours by organizations that can cause waiting times to NASDAQ listings. Overtly promotional communications are among such criteria that won’t ever result in a refusal letter…nor a NASDAQ listing.
Most importantly, Cytodyn has also not been in a position to access capital under standard ways, because of its being listed on the OTC, in addition to thus un attractive on that basis alone to white shoe firms.
And so, they have been cut down to accepting shareholder-hostile OID debentures with ugly sales terms that generate a short-seller’s stormy dream.
In November, they took 28.5 zillion coming from Streeterville Capital of that only $25 million was paid to the company; $3.4 million will be the discount the Streeterville areas, and $100k is actually reserved to protect the expenditures. Streeterville is actually associated with Illiad Trading and Research, that is controlled by John Fife of Chicago Ventures Inc. Iliad has been called a “legendary so called poisonous lender”, by rival research tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the price, Cytodyn has got to pay again $7.5 million per month. If they do not have the cash, they spend within stock; the majority of not long ago, within a sales cost of $3.40 a share.
These days consider if you are an opportunistic low-rent lender and you have gained an assured 2.2 million shares coming your way in the very first week of every month. Any cost above the sales price is pure profit. Remember – this guy isn’t an investor; he’s a lender.
He’s not operating on the hope that Cytodyn stock may go parabolic in the event that leronlimab is deemed a remedy for ARDS; his online business model is to limit risk and maximize upside through discounted conversion of share.
This is the brief seller’s wet dream I’m talking about. Not only would be the lender enticed to go brief, but any short trading container repair shop in town who are able to fog a mirror and examine an EDGAR filing know that every month, like clockwork, there’s going to be two million+ shares striking the bid lowered by to $3.40.
The SEC isn’t impressed, and on September 3, 2020, filed a criticism.
The Securities as well as Exchange Commission these days filed charges from John M. Fife of Companies and Chicago he controls for acquiring and selling more than 21 billion shares of penny stock without the need of registering to be a securities dealer with the SEC.
The SEC’s complaint, alleges that in between 2015 and 2020, Fife, as well as his companies, Chicago Venture Partners, L.P., Iliad Research in addition to the Trading, L.P., St. George Investments LLC, Tonaquint, Inc., in addition to the Typenex Co-Investment, LLC, frequently involved in the company of purchasing convertible paperwork at penny stock issuers, transforming these notes into shares of inventory at a big discount from the market price, and offering the freshly issued shares to the marketplace at a sizable profit. The SEC alleges which Fife as well as the businesses of his engaged in around 250 convertible transactions with around 135 issuers, sold greater than 21 billion newly-issued penny stock shares into the market, and obtained greater than sixty one dolars million in profits.
Streeterville Capital isn’t stated as an entity in the complaint. Which hints it was very likely utilized by Cytodyn as well as Fife to avoid detection by the SEC that this same scheme was getting perpetrated on Cytodyn at the time of its complaint.
But that’s not the only reason the stock can’t observe some upward momentum.
The company has been offering stock privately at ridiculously minimal prices, to the stage where by one wonders just who exactly are the fortunate winners of what amounts to no cost millions of dollars?
To wit:
Furthermore, beginning inside the month of November 2020 and also for each of the next 5 (5) calendar days thereafter, the Company is actually required to reduce the exceptional balance with the Note by $7,500,000 per month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes will likely be acknowledged to the transaction of each month Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the 15 % prepayment premium.
Additionally detracting from the business’s gloss is actually the propensity of handling for endlessly promotional communications with shareholders. During an investor webcast on January 5th, the business had a compilation of audio testimonials from individuals using PRO 140 for HIV treatment, backed by tear jerking music, and therefore replete with mental language devoid of information.
Worse, the company’s phone number at the bottom part of press releases comes with an extension for Nader Pourhassan, the CFO, and Mike Mulholland, the CEO, but neither one particular is actually a “valid extension” in accordance with the automated phone system.
That is the type of approach that the FDA and SEC view unfavourably, and it is likely at the very least in part the reason for their continued underdog status at both agencies.
The company also has turned out to be unresponsive to requests for interviews, and thus with the story coming out under only these ill advised publicity stunts, shorts are actually attracted, and big money investors, alienated.
But think of this “management discount” as the chance to buy a sizable role (should one be so inclined) in what could really well prove to be, in a question of weeks, given that the top therapy for serious COVID19 related illness.
I expect the data in the trial now concluded for just such a sign can release the business into a whole new valuation altitude that will permit it to overcome these shortfalls.
Average trading volume is steady above six million shares 1 day, and before the conclusion of this week, we’ll know precisely how effective leronlimab/PRO 140/Vyrologix is at saving lives from the worst of COVID 19. In case the outcomes are positive, this can be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)