Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug designer, has already delivered a win for Wealthpress members from our 1st feature back in April this year. Billions have been invested into hundreds of biotechs all competing to make a cure or therapy for serious COVID 19 situations that cause death, and none have been successful. Except Cytodyn, if early indications are verified in the present trial now underway.
But after a deep jump on the business’s monetary claims as well as SEC filings, a picture emerges of business management functioning who have a “toxic lender” to funnel seriously discounted shares to the lender frequently. An investment in Cytodyn is actually a strictly speculative bet on the part of mine, of course, if the expected upward price movement does not appear following results in the company’s phase 2b/3 trial for severe-to-critical COVID-19, I am going to exit the investment.
If the company’s drug does in fact reliably preserve lives in severe-to-critical COVID19 patients, then a groundswell of investor assistance may drive the company into new, higher grade human relationships, which would permit for the redemption of elimination as well as debentures of reliance on fly-by-night financings like those discussed below.
Cytodyn’s sole focus is actually developing therapies used on a monoclonal antibody called “leronlimab”, technically described as “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor type 5 (CCR5)”. This particular engineered antibody was purchased of Progenics Pharmaceuticals as “PRO 140”, a recently acquired subsidiary of Lantheus Holdings Inc (NASDAQ:LNTH), back in 2012.
Total expense of acquisition amounts to $10 million plus 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 highlighted the potential to reduce daily drug cocktails with assortment pills right into a single monthly injection, in some cases, with zero unintended effects. To day, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific staff has realized the antibody’s influence on the CCR5 receptor has extremely positive therapeutic implications for everything out of some solid tumours to NASH (Non-alcoholic steatohepatitis), the liver function condition that afflicts up to twelve % of the US population, and up to 26 % globally.
But the real emergent also likely transformational program for leronlimab, as I have said at the beginning, (which is already getting branded as Vyrologix by Cytodyn), is for the Acute Respiratory Distress Syndrome (ARDS) brought on by COVID-19 which precludes the Sequential Organ Failure in fatal instances of COVID infections.
Leronlimab evidently prevents the CCR5 receptor from over-responding to the virus and launching the now household-word “cytokine storm”. Some proportion of patients evidently return from the brink after 2 treatments (and in some instances, one treatment) of leronlimab, even if intubated.
The company finished enrollment of a stage 2b/3 trial on December 15 to “evaluate the efficacy and safety of leronlimab for individuals with severe-to-critical COVID 19 indications is a two arm, randomized, double blind, placebo controlled, adaptive style multicenter study,” based on the company’s media release.
This trial period concluded on January 12-ish, and if the outcomes are good, this can make leronlimab a high remedy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
While the vaccines that are now dispersing are definitely lending optimism for a normalization of society by mid 2021, the surging worldwide rates of illness suggest the immediate future is already overwhelming health care systems across the world as more and more people call for utilization of Intensive Care Unit hospitalization.
During my first job interview with Dr. Nader Pourhassan returned in March of 2020, his serious interest for the prospects of the drug’s efficacy was apparent.
This was prior to the currently raging next wave had gathered vapor, and he was then seeing individuals who were receiving leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
Within the time, however,, this little independent biotech without any big funding along with a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting able to apply for a listing on NASDAQ, and the deck was stacked against it.
Full Disclosure: I have 10,000 shares at an average cost of $6.23
Even though the world focuses breathlessly on the optimism for a brand new vaccine to restore the community liberties of theirs, the 10 ish portion of COVID infectees that descend into the cytokine storm driven ARDS actually have their lives saved by this seemingly flexible drug. To them, a vaccine is literally useless.
This drug has “blockbuster potential” authored all over it.
With 394 patients enrolled inside the Phase 2b/3 trial as of December 16, in addition to first data expected this week, a demonstrable consistency in the data is going to record the world’s attention in pretty much the most profound way. Short sellers could be swept apart (at the very least temporarily) while the company’s brand new share price levels qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses prepared for sale now, with an additional 2.5 huge number of ordered for each of 2021 plus 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 stuck in sub-1dolar1 five penny stock purgatory for so very long?
The quick solution is “OTC”.
Besides struggling with a share price under $3, the company has not been able to meet and keep certain other quantitative requirements, like positive shareholders’ equity that is at least five dolars million.
But in the NASDAQ community, you can find non-quantifiable behaviours by businesses that cause waiting times to NASDAQ listings. Overtly promotional communications are actually among these kinds of criteria which won’t ever lead to a refusal letter…nor a NASDAQ listing.
More to the point, Cytodyn in addition has not been able to access capital under standard means, thanks to its being listed on the OTC, and consequently un attractive on that foundation alone to white colored shoe firms.
So, they’ve been lowered to accepting shareholder-hostile OID debentures with unsightly sales terms that create a short-seller’s stormy dream.
In November, they coppied 28.5 zillion out of Streeterville Capital of which only $25 million was given to the company; $3.4 million will be the discount the Streeterville sections, and $100k is actually put aside to protect the expenditures. Streeterville is related with Illiad Trading and Research, which is operated by John Fife of Chicago Ventures Inc. Iliad has been known as a “legendary so called poisonous lender”, by rival research tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the deal, Cytodyn wants to pay again $7.5 million every month. If they do not possess the cash, they spend inside stock; many lately, within a sales cost of $3.40 a share.
These days just think about if you are an opportunistic low-rent lender and you’ve gained a certain 2.2 million shares coming the way of yours in the first week of every month. Any price above the sales expenditure is pure profit. Remember – this guy isn’t an investor; he is a lender.
He is not operating on the expectation that Cytodyn stock might go parabolic if leronlimab is deemed a cure for ARDS; his business model is limiting risk and maximize upside through discounted conversion of share.
This is the brief seller’s wet dream I am talking about. Not merely would be the lender enticed to go brief, but some short-trading pail shop in town who can fog a mirror and read an EDGAR filing know that every month, like clockwork, there’s going to be 2 million+ shares striking the bid down to $3.40.
The SEC is not impressed, additionally, on September three, 2020, filed a criticism.
The Securities in addition to the Exchange Commission nowadays filed charges from John M. Fife of Companies and Chicago he controls for acquiring as well as selling much more than 21 billion shares of penny stock without the need of registering as a securities dealer while using the SEC.
The SEC’s criticism, alleges that between 2015 as well as 2020, Fife, as well as the companies of his, Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., in addition to the Typenex Co Investment, LLC, routinely interested in the small business of purchasing convertible notes at penny stock issuers, transforming these notes into shares of inventory at a large discount from the market price, and selling the freshly issued shares into the market at a substantial profit. The SEC alleges that Fife and the businesses of his interested in more than 250 sports convertible transactions with roughly 135 issuers, sold more than twenty one billion newly issued penny stock shares to the industry, and obtained greater than $61 million in earnings.
Streeterville Capital is not stated as an entity in the complaint. Which implies that it was probably applied by Fife as well as Cytodyn to avoid detection by the SEC that this very same scheme was being perpetrated on Cytodyn within the time of its complaint.
But that is not the sole reason the stock cannot preserve some upward momentum.
The company has been selling inventory privately from ridiculously low prices, to the stage in which one wonders just that exactly are the fortunate winners of what requires no cost millions of dollars?
In addition, beginning inside the month of November 2020 and also for each of the following 5 (5) calendar months thereafter, the Company is actually required to reduce the excellent sense of balance belonging to the Note by $7,500,000 a month (the “Debt Reduction Amount”). Payments the Company makes under the Prior Notes will likely be credited toward the payment of each month Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the fifteen % prepayment premium.
Likewise detracting from the company’s gloss is the propensity of managing for excessively marketing communications with shareholders. During an investor webcast on January 5th, the business had a compilation of sound testimonials from clients applying PRO 140 for HIV treatment, 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 comes with an extension for Mike Mulholland, the CFO, and Nader Pourhassan, the CEO, but neither one particular is actually a “valid extension” based on the automated phone system.
That is the type of approach that the SEC and FDA view unfavourably, and it is likely at the very least in part the reason for their continued underdog status at both agencies.
The company has also turned out to be unresponsive to requests for interviews, and thus using the story coming out under only these ill-advised publicity stunts, shorts are attracted, and big cash investors, alienated.
But think of this specific “management discount” as the opportunity to acquire a sizable job (should a person be so inclined) contained what could really well turn out to be, in a situation of weeks, as the top therapy for serious COVID19 associated illness.
I expect the data from the trial now concluded for only such a sign can launch the company into a whole new valuation altitude that will permit it to get over these shortfalls.
Average trading volume is actually steady above six million shares 1 day, and before the end of this week, we’ll know just 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)