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 members from our 1st feature back in April this year. Billions have been invested directly into hundreds of biotechs all competing to produce a cure or perhaps therapy for serious COVID 19 situations which cause death, and none have succeeded. Except Cytodyn, if early indications are established in the current trial now underway.
But right after a serious jump on the business’s monetary claims and SEC filings, an image emerges of business control operating with a “toxic lender” to direct severely discounted shares to the lender regularly. An investment in Cytodyn is actually a strictly speculative bet on my part, and when the expected upward price movement does not manifest after results in the company’s period 2b/3 trial for severe-to-critical COVID-19, I am going to exit the investment.
If the business’s drug does in fact reliably conserve life in danger of severe-to-critical COVID19 patients, subsequently a groundswell of investor assistance may drive the company into completely new, higher-grade relationships, which would permit for the redemption of debentures as well as elimination of reliance on fly-by-night financings like those described below.
Cytodyn’s sole focus is developing therapies used on a monoclonal antibody called “leronlimab”, technically referred to as “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor type 5 (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 cost of acquisition amounts to ten dolars million and a five % net royalty on business revenue.
The drug was acquired on its first promise as an HIV therapy, for which continued research and development by Cytodyn has highlighted the capability to reduce regular drug cocktails with assortment pills right into an individual monthly injection, in some instances, with zero 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 effect on the CCR5 receptor has extremely optimistic therapeutic implications for everything from certain stable tumours to NASH (Non-alcoholic steatohepatitis), the liver function disorder that afflicts up to 12 percent of the US population, and up to 26 % globally.
But the real emergent and likely transformational program for leronlimab, as stated at the start, (which is currently 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 and also launching the now household word “cytokine storm”. Some proportion of patients obviously return from the brink after 2 treatments (and in a number of instances, one treatment) of leronlimab, even when intubated.
The company finished enrollment of a phase 2b/3 trial on December fifteen 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 style multicenter study,” according to the company’s press release.
This trial phase concluded on January 12 ish, of course, if the outcomes are positive, this can make leronlimab a premier treatment for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines that are now dispersing are definitely lending hope for a normalization of modern culture by mid-2021, the surging global rates of contamination mean the immediate future is today overwhelming health care systems around the world as more and more people call for utilization of Intensive Care Unit hospitalization.
During the 1st job interview of mine with Dr. Nader Pourhassan returned in March of 2020, the serious interest of his for the prospects of the drug’s effectiveness was evident.
It was before the currently raging second trend had gathered heavy steam, and he was then seeing individuals that were receiving leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
At the time, though, this small independent biotech without major funding along with a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting prepared to put on for a listing on NASDAQ, as well as the deck was stacked against it.
Full Disclosure: I have 10,000 shares at an average cost of $6.23
Although the planet focuses breathlessly on the hope for a brand new vaccine to restore the social liberties of theirs, the 10 ish portion of COVID infectees that descend into the cytokine storm-driven ARDS actually have their day saved by this seemingly versatile drug. For them, a vaccine is pretty much useless.
This particular drug has “blockbuster potential” written all over it.
With 394 patients enrolled in the Phase 2b/3 trial as of December 16, in addition to first information expected this week, any demonstrable consistency in the data is going to record the world’s focus in pretty much the most profound way. Quick sellers could be swept apart (at least temporarily) while the company’s brand new share priced levels qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses ready for sale right now, with an additional 2.5 million purchased for each of 2021 plus 2022 in a manufacturing understanding with Samsung, as per its CEO.
so if leronlimab/PRO 140/Vyrologix is very great, how come the stock’s been stuck in sub 1dolar1 five penny stock purgatory for so very long?
The fast answer is “OTC”.
Besides struggling with a share price under three dolars, the company hasn’t been able to meet and keep some other quantitative prerequisites, like positive shareholders’ equity that is at least five dolars million.
But in the NASDAQ world, you can find non quantifiable behaviours by companies that create slow downs to NASDAQ listings. Overtly advertising communications are actually among such type of criteria that will never result in a refusal letter…nor a NASDAQ listing.
Most importantly, Cytodyn has additionally not been able to access capital under standard means, thanks to its being listed on the OTC, in addition to therefore un attractive on that basis alone to white shoe firms.
Thus, they have been reduced to accepting shareholder-hostile OID debentures with unsightly conversion terms that create a short-seller’s damp dream.
In November, they borrowed 28.5 huge number of coming from Streeterville Capital of that only $25 million was given to the company; $3.4 huge number of will be the discount the Streeterville pockets, and $100k is actually reserved to protect the expenditures. Streeterville is linked with Illiad Trading and Research, that is controlled by John Fife of Chicago Ventures Inc. Iliad has been termed as a “legendary so-called toxic lender”, by rival research tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the offer, Cytodyn has got to pay back again $7.5 million each month. If they do not possess the cash, they pay in stock; most not long ago, within a conversion cost of $3.40 a share.
These days just imagine when you are an opportunistic low rent lender and you have received a certain 2.2 million shares coming your way in the first week of every month. Any price tag above the sales price is pure profit. Remember – this guy is not an investor; he’s a lender.
He is not operating on the expectation that Cytodyn stock might go parabolic in the event that leronlimab is deemed a cure for ARDS; his online business model is limiting risk and optimize upside through discounted conversion of share.
This’s the quick seller’s wet dream I am discussing. Not only is the lender enticed to go short, but some short trading bucket 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 two million+ shares impacting the bid lowered by to $3.40.
The SEC isn’t impressed, and on September 3, 2020, filed a criticism.
The Securities and Exchange Commission nowadays filed charges against John M. Fife of Chicago and Companies he controls for acquiring and marketing more than 21 billion shares of penny inventory without the need of registering to be a securities dealer with the SEC.
The SEC’s complaint, alleges this in between 2015 and 2020, Fife, and his businesses, Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., and Typenex Co-Investment, LLC, regularly involved in the business of buying convertible paperwork at penny stock issuers, converting these notes into shares of stock at a major discount from the market cost, and selling the freshly issued shares to the marketplace at a substantial profit. The SEC alleges that Fife and the companies of his interested in over 250 sports convertible transactions with about 135 issuers, sold greater than twenty one billion newly issued penny stock shares to the industry, and obtained greater than $61 million in earnings.
Streeterville Capital isn’t mentioned as an entity of the complaint. Which suggests it was likely applied by Cytodyn and Fife to stay away from detection by the SEC that this same plan was being perpetrated on Cytodyn within the time of its complaint.
But that’s not the sole reason the stock cannot preserve any upward momentum.
The company has been offering stock privately from ridiculously minimal prices, to the stage in which one wonders just that exactly are the lucky winners of what requires no cost millions of dollars?
In addition, starting in the month of November 2020 as well as for each of the second five (five) calendar days thereafter, the Company is obliged to bring down the exceptional sense of balance of the Note by $7,500,000 per month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes will be credited to the payment of each month Debt Reduction Amount. The Debt Reduction Amount payments are not be subject to the 15 % prepayment premium.
Also detracting from the company’s shine is actually the propensity of management for excessively marketing communications with shareholders. During an investor webcast on January 5th, the business had a number of audio testimonials from patients using PRO 140 for HIV therapy, backed by tear-jerking music, and therefore replete with mental language devoid of data.
Worse, the company’s mobile phone number at the bottom of press releases includes an extension for Nader Pourhassan, the CFO, and Mike Mulholland, the CEO, but neither one is actually a “valid extension” in accordance with the automated phone system.
That’s the kind of approach that the FDA and SEC view unfavourably, and it is likely at least in part the reason behind their continued underdog status at both agencies.
The company has additionally become unresponsive to requests for interviews, and thus with the story coming out less than only these ill-advised publicity stunts, shorts are actually attracted, and big cash investors, alienated.
But think of this “management discount” as the ability to get a sizable position (should one be so inclined) contained what may very well prove to be, in a matter of weeks, as the top treatment for severe COVID19 related illness.
I expect the details from your trial now concluded for just such an indication can launch the company into a whole new valuation altitude that will permit it to overcome these shortfalls.
Average trading volume is continuous above six million shares 1 day, and before the conclusion of this week, we will learn precisely how efficient leronlimab/PRO 140/Vyrologix is actually for saving lives from the most severe of COVID 19. If the outcomes are good, this can be a significant winner.
Cytodyn Inc (OTCMKTS:CYDY)