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 directly into a huge selection of biotechs all competing to produce a cure or perhaps therapy for severe COVID 19 instances which trigger death, and also none have been successful. Except Cytodyn, when early indications are confirmed in the present trial now underway.
But right after a deep dive on the business’s financial statements and SEC filings, a picture emerges of business management functioning who have a “toxic lender” to direct severely discounted shares to the lender frequently. An investment in Cytodyn is actually a purely speculative bet on the part of mine, and if the anticipated upward price movement doesn’t occur 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 actually reliably conserve life to come down with severe-to-critical COVID19 individuals, subsequently a groundswell of investor support could push the organization into completely new, higher-grade human relationships, which would enable for the redemption of debentures as well as elimination of reliance on fly-by-night financings for example those discussed below.
Cytodyn’s sole focus is actually creating therapies used on a monoclonal antibody known as “leronlimab”, technically called “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 expense of acquisition amounts to ten dolars million plus a 5 % net royalty on commercial revenue.
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 myriad pills right into a single monthly injection, in some instances, with 0 unwanted side effects. To particular date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific team has found 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 percent of the US public, and up to twenty six % globally.
But the real emergent also likely transformational application for leronlimab, as mentioned at the beginning, (which is currently being branded as Vyrologix by Cytodyn), is made for the Acute Respiratory Distress Syndrome (ARDS) due to COVID 19 which precludes the Sequential Organ Failure wearing fatal situations of COVID infections.
Leronlimab apparently blocks the CCR5 receptor from over responding to the virus and also launching the today 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, still when intubated.
The company finished enrollment of a stage 2b/3 trial on December fifteen to “evaluate the efficacy and safety of leronlimab for people with severe-to-critical COVID 19 indications is a two-arm, randomized, double blind, placebo controlled, adaptive design multicenter study,” according to the company’s press release.
This trial phase concluded on January 12-ish, and if the outcomes are good, this will make leronlimab a premier therapy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Although the vaccines that are presently circulating are definitely lending optimism for a normalization of modern culture by mid-2021, the surging worldwide rates of infection mean the immediate future is already overwhelming health care systems around the world as a lot more individuals require access to Intensive Care Unit hospitalization.
During my 1st job interview with Dr. Nader Pourhassan back found March of 2020, his extreme enthusiasm for the prospects of the drug’s efficacy was evident.
It was prior to the currently raging second trend had gathered vapor, and also he was then noticing patients that were getting leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
At the time, however,, this small independent biotech without any major funding along with a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting ready to put on for a listing on NASDAQ, and the deck was stacked against it.
Full Disclosure: I posses 10,000 shares at an average price of $6.23
Even though the world focuses breathlessly on the hope for the latest vaccine to regain the community liberties of theirs, the 10 ish portion of COVID infectees who descend into the cytokine storm-driven ARDS literally have their day saved by this seemingly versatile drug. For these people, a vaccine is basically useless.
This drug has “blockbuster potential” authored all over it.
With 394 patients enrolled in the Phase 2b/3 trial as of December 16, and initially information expected this week, any demonstrable consistency in the details will record the world’s attention in the most profound way. Short sellers might be swept apart (at the very least temporarily) simply because company’s brand new share price amounts qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses prepared for sale now, with an additional 2.5 huge number of ordered for each of 2021 as well as 2022 in a manufacturing arrangement 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 five penny stock purgatory for such a long time?
The speedy solution is “OTC”.
Apart from struggling with a share price under three dolars, the company hasn’t been able to meet and maintain certain different quantitative requirements, like positive shareholders’ equity with a minimum of $5 million.
But in the NASDAQ world, you can find non quantifiable behaviours by companies that create waiting times to NASDAQ listings. Overtly advertising communications are actually among such criteria which won’t ever lead to a refusal letter…nor a NASDAQ listing.
More to the point, Cytodyn has also not been in a position to access capital under standard means, because of its being mentioned on the OTC, along with therefore un attractive on that basis alone to white colored shoe firms.
So, they have been reduced to accepting shareholder hostile OID debentures with unsightly conversion terms that produce a short-seller’s wet dream.
In November, they coppied 28.5 million from Streeterville Capital of that only $25 million was paid to the company; $3.4 huge number of will be the discount the Streeterville areas, and $100k is set aside to cover the expenses. Streeterville is associated with Illiad Research and Trading, that is operated by John Fife of Chicago Ventures Inc. Iliad has been known as a “legendary so called poisonous lender”, by rival studies tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the offer, Cytodyn has got to pay back again $7.5 million per month. If they do not possess the cash, they pay in stock; the majority of not long ago, within a sales price of $3.40 a share.
Now consider if you’re an opportunistic low rent lender and you’ve got a guaranteed 2.2 million shares coming your way in the first week of each month. Any price above the conversion cost is pure profit. Remember – this guy isn’t an investor; he is 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 business model is limiting risk and optimize upside through affordable transformation 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 some short trading pail shop in town who could fog a mirror and go through an EDGAR filing know that each month, like clockwork, there’s 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 complaint.
The Securities as well as Exchange Commission nowadays filed charges from John M. Fife of Companies and Chicago he controls for obtaining as well as selling much more than 21 billion shares of penny inventory without any registering as a securities dealer using the SEC.
The SEC’s criticism, alleges this 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., and Typenex Co Investment, LLC, frequently engaged in the small business of purchasing sports convertible notes at penny stock issuers, transforming the notes into shares of stock at a big discount from the market price, and offering the freshly issued shares to the marketplace at a sizable profit. The SEC alleges that Fife and his businesses engaged in over 250 sports convertible transactions with approximately 135 issuers, sold more than 21 billion newly issued penny stock shares into the market, and obtained more than sixty one dolars million in earnings.
Streeterville Capital isn’t stated as an entity in the complaint. Which hints it was likely applied by Fife as well as Cytodyn to avoid detection by the SEC this same scheme was getting perpetrated on Cytodyn at the time of its complaint.
But that is not the sole reason the stock cannot preserve any upward momentum.
The company has been offering inventory privately at ridiculously low prices, to the point in which one wonders just that exactly are the lucky winners of what requires free millions of dollars?
Furthermore, beginning in the month of November 2020 and for every one of the second 5 (5) calendar days thereafter, the Company is obligated to lower the outstanding sense of balance belonging to the Note by $7,500,000 per month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes will likely be acknowledged toward the payment of each monthly 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 the propensity of handling for endlessly promotional communications with shareholders. During an investor webcast on January 5th, the company had a number of sound testimonials from clients applying PRO 140 for HIV treatment, backed by tear jerking music, and then replete with mental language devoid of information.
Even 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 automatic system.
That’s the approach type that the SEC and FDA view unfavourably, and it is likely at 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 interview, and thus using the story coming out less than merely these ill-advised publicity stunts, shorts are actually attracted, and huge money investors, alienated.
But think of this “management discount” as the opportunity to purchase a sizable role (should one be so inclined) contained what may really well turn out to be, in a question of weeks, given that the top treatment for serious COVID19 associated illness.
I expect the information in the trial now concluded for only such an indication can launch the business into a whole new valuation altitude that will permit it to overpower these shortfalls.
Average trading volume is actually continuous above six million shares a day, and right before the tail end of this week, we will know just how effective leronlimab/PRO 140/Vyrologix is actually at saving lives from the worst of COVID nineteen. If the results are positive, this can be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)