Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug developer, has already shipped a win for Wealthpress subscribers from our 1st feature returned in April this season. Billions have been invested straight into a huge selection of biotechs all competing to develop a cure or perhaps therapy for severe COVID 19 instances which cause death, and none have succeeded. Except for Cytodyn, if early indications are verified in the present trial now underway.
But right after a serious plunge on the company’s financial claims as well as SEC filings, a picture emerges of company control operating having a “toxic lender” to funnel seriously discounted shares to the lender regularly. An investment in Cytodyn is a strictly speculative bet on the part of mine, and when the anticipated upward price movement does not manifest following results of the company’s period 2b/3 trial for severe-to-critical COVID 19, I am going to exit the investment.
In case the company’s drug does actually reliably save lifestyles in severe-to-critical COVID19 patients, then a groundswell of investor assistance may drive the company into new, higher grade human relationships, which would enable for the redemption of debentures and elimination of reliance on fly-by-night financings like those described below.
Cytodyn’s sole focus is developing remedies used on a monoclonal antibody known as “leronlimab”, technically described as “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor sort five (CCR5)”. This engineered antibody was obtained from Progenics Pharmaceuticals as “PRO 140”, a recently-acquired subsidiary of Lantheus Holdings Inc (NASDAQ:LNTH), again in 2012.
Total price of acquisition amounts to $10 million plus a 5 % net royalty on business revenue.
The drug was acquired on its first promise as an HIV treatment, for which continued research as well as development by Cytodyn has shown the capability to reduce daily drug cocktails with myriad pills right into a single monthly injection, in some cases, with 0 side effects. To day, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific team has found the antibody’s effect on the CCR5 receptor has extremely positive therapeutic implications for everything from some solid tumours to NASH (Non-alcoholic steatohepatitis), the liver feature ailment which afflicts up to 12 percent of the US public, and up to twenty six % globally.
But the real emergent and potentially transformational program for leronlimab, as stated at the start, (which is now 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 instances of COVID infections.
Leronlimab apparently blocks the CCR5 receptor from over responding to the virus as well as launching the today household-word “cytokine storm”. Some proportion of patients obviously return from the brink after 2 treatments (and in a number of cases, one treatment) of leronlimab, still when intubated.
The company completed enrollment of a level 2b/3 trial on December fifteen to “evaluate the efficacy and safety of leronlimab for patients with severe-to-critical COVID-19 indications is a two-arm, placebo controlled, double blind, randomized, adaptive design multicenter study,” based on the company’s press release.
This trial period concluded on January 12 ish, of course, if the results are positive, this will make leronlimab a high therapy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
While the vaccines that are presently circulating are certainly lending hope for a normalization of society by mid 2021, the surging global rates of contamination suggest the immediate future is right now overwhelming health care systems throughout the world as increasingly more individuals call for utilization of Intensive Care Unit hospitalization.
During my 1st interview with Dr. Nader Pourhassan returned contained March of 2020, his extreme eagerness for the prospects of this drug’s efficacy was evident.
It was prior to the currently raging second wave had gathered heavy steam, and he was then noticing patients that were getting leronlimab under the FDA’s Emergency Investigative New Drug exemption.
At the time, although, this little independent biotech with no major funding along with a decidedly unhappy public listing on the naked short-sellers’ fantasy OTC marketplace was getting ready to utilize for a listing on NASDAQ, and the deck was stacked against it.
Full Disclosure: I posses 10,000 shares from an average cost of $6.23
Although the planet focuses breathlessly on the hope for the latest vaccine to restore their social liberties, the 10-ish percentage of COVID infectees that descend into the cytokine storm-driven ARDS literally have their lives saved by this apparently flexible drug. For these people, a vaccine is practically pointless.
This drug has “blockbuster potential” written all over it.
With 394 individuals enrolled with the Phase 2b/3 trial as of December sixteen, along with first information expected this week, any demonstrable consistency in the information is going to capture the world’s interest in pretty much the most profound way. Short sellers might be swept apart (at the very least temporarily) as the company’s new share price amounts qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses prepared for sale right now, with an extra 2.5 zillion purchased for each of 2021 as well as 2022 in a manufacturing agreement with Samsung, based on the CEO of its.
so if leronlimab/PRO 140/Vyrologix is so great, why the stock’s been stuck in sub-1dolar1 5 penny stock purgatory for such a long time?
The quick solution is “OTC”.
Besides faced with a share price under three dolars, the company has not been able to meet and keep some different quantitative requirements, like good shareholders’ equity with a minimum of $5 million.
But in the NASDAQ community, there are non-quantifiable behaviours by organizations that cause slow downs to NASDAQ listings. Overtly promotional communications are actually among such criteria that will never result in a refusal letter…nor a NASDAQ listing.
Most importantly, Cytodyn has additionally not been equipped to access capital under conventional ways, because of its being listed on the OTC, and thus un-attractive on that foundation alone to white shoe firms.
So, they’ve been lowered to accepting shareholder-hostile OID debentures with unsightly conversion terms that produce a short-seller’s stormy dream.
In November, they coppied 28.5 huge number of coming from Streeterville Capital of that only $25 million was given to the company; $3.4 zillion will be the discount the Streeterville areas, and $100k is set aside 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 known as a “legendary so-called toxic lender”, by rival studies firm 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 have the cash, they spend within stock; the majority of recently, within a conversion price of $3.40 a share.
Now just think about when you are an opportunistic low rent lender and you’ve got an assured 2.2 million shares coming the way of yours in the first week of every month. Any price tag above the conversion expenditure is pure profit. Remember – this guy isn’t an investor; he is a lender.
He’s not operating on the expectation that Cytodyn stock could go parabolic if leronlimab is deemed a cure for ARDS; his business model is to limit risk and optimize upside through affordable transformation of share.
This’s the short seller’s wet dream I am discussing. Not only would be the lender enticed to go short, but some short-trading bucket shop in town who can fog a mirror and read an EDGAR filing know that each month, like clockwork, there is going to be two million+ shares impacting the bid down to $3.40.
The SEC is not impressed, and on September three, 2020, filed a complaint.
The Securities and Exchange Commission nowadays 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 as a securities dealer using the SEC.
The SEC’s criticism, alleges this in between 2015 as well as 2020, Fife, and also his businesses, Chicago Venture Partners, L.P., Iliad Research in addition to the Trading, L.P., St. George Investments LLC, Tonaquint, Inc., as well as Typenex Co-Investment, LLC, routinely interested in the company of purchasing convertible notes at penny stock issuers, converting these notes into shares of stock at a major discount from the market price, and selling the freshly issued shares into the marketplace at a sizable profit. The SEC alleges which Fife and his companies involved in around 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 sixty one dolars million in earnings.
Streeterville Capital is not stated as an entity of the complaint. Which implies that it was likely used by Cytodyn and Fife to stay away from detection by the SEC this very same plan was getting perpetrated on Cytodyn within the time of the complaint of its.
But that’s not the only reason the stock can’t maintain any upward momentum.
The company has been selling stock privately from ridiculously minimal prices, to the position where by one wonders just that exactly are the lucky winners of what requires no cost millions of dollars?
Moreover, beginning inside the month of November 2020 and for each of the second 5 (five) calendar months thereafter, the Company is obliged to bring down the excellent balance belonging to the Note by $7,500,000 per month (the “Debt Reduction Amount”). Payments the Company makes under the Prior Notes will be acknowledged to the transaction of each month Debt Reduction Amount. The Debt Reduction Amount payments are not be subject to the 15 % prepayment premium.
Likewise detracting from the business’s shine is the propensity of handling for excessively promotional communications with shareholders. During an investor webcast on January 5th, the business played a series of sound testimonials from patients using PRO 140 for HIV therapy, backed by tear-jerking music, and therefore replete with emotional language devoid of data.
Even worse, the company’s telephone number at the bottom part of press releases includes an extension for Nader Pourhassan, the CFO, and Mike Mulholland, the CEO, but neither one is a “valid extension” according to the automated phone system.
That is the sort of approach that the FDA and SEC view unfavourably, and it is likely at the very least in part the reason behind the continued underdog status of theirs at both agencies.
The company has additionally turned out to be unresponsive to requests for interview, and therefore 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 chance to acquire a sizable job (should one be so inclined) contained what may really well turn out to be, in a matter of weeks, since the best treatment for severe COVID19 associated illness.
I expect the information from the trial now concluded for just such an indication may release the company into a complete new valuation altitude that will enable it to get over these shortfalls.
Average trading volume is steady above six million shares one day, and right before the tail end of this week, we’ll learn precisely how effective leronlimab/PRO 140/Vyrologix is for saving lives from the most severe of COVID nineteen. In case the outcomes are good, this can be a significant winner.
Cytodyn Inc (OTCMKTS:CYDY)