Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late stage biotech drug creator, has already shipped a win for Wealthpress members from our first feature back in April this season. Billions have been invested into hundreds of biotechs all competing to produce a cure or perhaps treatment for severe COVID-19 instances that cause death, and none have been successful. Except Cytodyn, if early indications are confirmed in the current trial now underway.
But right after a deep jump on the company’s monetary claims as well as SEC filings, an image emerges of company management functioning with a “toxic lender” to direct severely discounted shares to the lender regularly. An investment in Cytodyn is a purely speculative bet on the part of mine, and when the anticipated upward price movement doesn’t occur following results in the company’s period 2b/3 trial for severe-to-critical COVID-19, I will exit the investment.
In case the business’s drug does actually reliably preserve lifestyles in severe-to-critical COVID19 patients, then a groundswell of investor support may force the company into completely new, higher-grade relationships, which would permit for the redemption of elimination and debentures of reliance on fly-by-night financings such as those described below.
Cytodyn’s sole focus is creating treatments used on a monoclonal antibody known as “leronlimab”, technically described as “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor type five (CCR5)”. This particular engineered antibody was acquired 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 5 % net royalty on business sales.
The drug was acquired on the first promise of its as an HIV treatment, for which continued research and development by Cytodyn has highlighted the potential to reduce daily drug cocktails with myriad pills right into an individual monthly injection, sometimes, with zero unwanted side effects. To day, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific staff has found the antibody’s influence on the CCR5 receptor has extremely optimistic therapeutic implications for everything from certain solid tumours to NASH (Non alcoholic steatohepatitis), the liver feature ailment which afflicts up to twelve % of the US population, and up to twenty six % globally.
But the real emergent also potentially transformational application for leronlimab, as mentioned at the beginning, (which is already being branded as Vyrologix by Cytodyn), is for the Acute Respiratory Distress Syndrome (ARDS) brought on by COVID 19 that precludes the Sequential Organ Failure in fatal situations of COVID infections.
Leronlimab apparently prevents the CCR5 receptor from over-responding to the virus and launching the today household word “cytokine storm”. Some proportion of patients evidently return from the brink after 2 treatments (and in a number of cases, one treatment) of leronlimab, even when intubated.
The company finished enrollment of a stage 2b/3 trial on December 15 to “evaluate the efficacy as well as safety of leronlimab for individuals with severe-to-critical COVID-19 indications is actually a two arm, placebo controlled, double blind, randomized, adaptive design and style multicenter study,” according to the company’s press release.
This trial period concluded on January 12 ish, of course, if the outcomes are positive, this will make leronlimab a premier treatment for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines that are presently dispersing are definitely lending optimism for a normalization of modern society by mid 2021, the surging worldwide rates of disease mean the immediate future is today overwhelming health care systems throughout the world as more and more folks call for ability to access Intensive Care Unit hospitalization.
During the 1st job interview of mine with Dr. Nader Pourhassan returned in March of 2020, his extreme interest for the prospects of the drug’s success was evident.
This was prior to the now raging next wave had gathered vapor, as well as he was then seeing patients who were receiving leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
At the time, nevertheless,, this small independent biotech with no significant funding along with a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting ready to apply for a listing on NASDAQ, as well as the deck was stacked against it.
Full Disclosure: I posses 10,000 shares at an average cost of $6.23
Even though the world concentrates breathlessly on the optimism for a new vaccine to restore the social liberties of theirs, the 10 ish percentage of COVID infectees that descend into the cytokine storm-driven ARDS actually have their day saved by this seemingly versatile drug. To them, a vaccine is pretty much pointless.
This drug has “blockbuster potential” written all over it.
With 394 people enrolled in the Phase 2b/3 trial as of December 16, in addition to first data expected this week, any demonstrable consistency in the data is going to capture the world’s interest in the most profound way. Short sellers could be swept aside (at the very least temporarily) while the business’s new share price amounts qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses all set for sale now, with an additional 2.5 huge number of purchased for each of 2021 as well as 2022 in a manufacturing understanding with Samsung, according to its CEO.
so if leronlimab/PRO 140/Vyrologix is very great, how come the stock’s been trapped in sub-1dolar1 5 penny stock purgatory for such a long time?
The quick answer is “OTC”.
Besides faced with a share price under three dolars, the company hasn’t been able to meet and keep certain other quantitative prerequisites, like good shareholders’ equity with a minimum of $5 million.
But in the NASDAQ community, you can find non quantifiable behaviours by businesses that cause slow downs to NASDAQ listings. Overtly advertising communications are among these kinds of criteria that will never lead to a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn has also not been equipped to access capital under standard means, because of its being mentioned on the OTC, along with consequently un attractive on that basis alone to white colored shoe firms.
And so, they have been lowered to accepting shareholder-hostile OID debentures with unsightly conversion terms that create a short-seller’s stormy dream.
In November, they borrowed 28.5 million out of Streeterville Capital of which only $25 million was paid to the company; $3.4 million is the discount the Streeterville sections, and $100k is actually reserved to protect the costs. Streeterville is related with Illiad Research and Trading, which is operated by John Fife of Chicago Ventures Inc. Iliad has been referred to as a “legendary so called poisonous lender”, by rival research tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the deal, Cytodyn needs to pay back again $7.5 million a month. In case they don’t have the cash, they pay within stock; the majority of lately, within a sales price of $3.40 a share.
Now consider if you are an opportunistic low-rent lender and you have received an assured 2.2 million shares coming the way of yours in the first week of each month. Any cost above the conversion cost is pure profit. Remember – this guy is not an investor; he’s a lender.
He’s not operating on the hope that Cytodyn stock may go parabolic if leronlimab is deemed a cure for ARDS; his business model is to limit risk and maximize upside via discounted conversion of share.
This’s the brief seller’s wet dream I’m discussing. Not merely would be the lender enticed to go brief, but any short trading container repair shop in town who could fog a mirror and go through an EDGAR filing realize that every month, like clockwork, there is going to be two million+ shares hitting the bid down to $3.40.
The SEC is not impressed, in addition, on September 3, 2020, filed a criticism.
The Securities as well as Exchange Commission nowadays filed charges against John M. Fife of Chicago and Companies he controls for obtaining and promoting much more than twenty one billion shares of penny stock without any registering to be a securities dealer using the SEC.
The SEC’s criticism, alleges this in between 2015 as well as 2020, Fife, and the companies of his, Chicago Venture Partners, L.P., Iliad Research as well as Trading, L.P., St. George Investments LLC, Tonaquint, Inc., in addition to the Typenex Co-Investment, LLC, routinely engaged in the small business of buying sports convertible notes from penny stock issuers, converting these notes into shares of stock at a big discount from the market price, and offering the freshly issued shares into the marketplace at a significant profit. The SEC alleges that Fife as well as his companies interested in more than 250 sports convertible transactions with approximately 135 issuers, sold more than twenty one billion newly issued penny stock shares into the industry, and obtained greater than $61 million in profits.
Streeterville Capital isn’t stated as an entity of the complaint. Which suggests that it was very likely applied by Fife as well as Cytodyn to avoid detection by the SEC this very same scheme was getting perpetrated on Cytodyn at the time of its complaint.
But that is not the sole reason the stock cannot observe some upward momentum.
The company has been offering inventory privately from ridiculously minimal prices, to the stage where one wonders just that exactly are the fortunate winners of what amounts to free millions of dollars?
Moreover, beginning in the month of November 2020 and for each of the next five (five) calendar months thereafter, the Company is required to bring down the outstanding harmony with the Note by $7,500,000 per month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes are going to be acknowledged toward the payment of each month Debt Reduction Amount. The Debt Reduction Amount payments are not be subject to the fifteen % prepayment premium.
Additionally detracting from the business’s shine is the propensity of managing for excessively promotional communications with shareholders. During an investor webcast on January 5th, the business played a number of audio testimonials from people applying PRO 140 for HIV therapy, backed by tear-jerking music, and then replete with emotional language devoid of information.
Worse, the company’s mobile phone number at the bottom of press releases includes an extension for Mike Mulholland, the CFO, and Nader Pourhassan, the CEO, but neither one is actually a “valid extension” in accordance with the automated phone system.
That’s the sort of approach that the SEC and FDA view unfavourably, and is likely at the very least in part the reason for the continued underdog status of theirs at both agencies.
The company also has become unresponsive to requests for interviews, and thus with the story coming out under merely these ill advised publicity stunts, shorts are actually attracted, and big money investors, alienated.
But think of this “management discount” as the opportunity to acquire a sizable job (should someone be so inclined) found what may really well prove to be, in a matter of weeks, since the leading therapy for severe COVID19 associated illness.
I expect the information from your trial now concluded for just such a sign could launch the company into a whole new valuation altitude that will permit it to get over these shortfalls.
Average trading volume is actually continuous above six million shares one day, and right before the conclusion of this week, we’ll learn just how effective leronlimab/PRO 140/Vyrologix is for saving lives from the worst of COVID 19. If the outcomes are positive, this can be a significant winner.
Cytodyn Inc (OTCMKTS:CYDY)