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 subscribers from our 1st feature back in April this season. Billions have been invested straight into a huge selection of biotechs all competing to make a medicine or perhaps treatment for severe COVID-19 situations that cause death, and none have been successful. Except Cytodyn, when early indications are confirmed in the present trial now underway.
But after a deep jump on the business’s fiscal claims and SEC filings, a picture emerges of company control working with a “toxic lender” to funnel severely discounted shares to the lender regularly. An investment in Cytodyn is actually a purely speculative bet on my part, and when the anticipated upward price movement does not occur after results of the company’s phase 2b/3 trial for severe-to-critical COVID-19, I am going to exit the investment.
In case the company’s drug does in fact reliably conserve lifestyles in severe-to-critical COVID19 individuals, then a groundswell of investor assistance can drive the organization into new, higher-grade human relationships, which would permit for the redemption of debentures as well as elimination of reliance on fly-by-night financings like those discussed below.
Cytodyn’s sole focus is actually developing therapies based on a monoclonal antibody called “leronlimab”, technically called “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor sort 5 (CCR5)”. This particular 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 $10 million plus a 5 % net royalty on business revenue.
The drug was acquired on the first promise of its as an HIV therapy, for which continued research and development by Cytodyn has demonstrated the capability to reduce daily drug cocktails with assortment pills into an individual monthly injection, in some cases, with zero unintended effects. To date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific team has discovered the antibody’s effect on the CCR5 receptor has incredibly optimistic therapeutic implications for everything out of some stable tumours to NASH (Non-alcoholic steatohepatitis), the liver feature ailment that afflicts up to twelve % of the US population, and up to 26 % globally.
But the real emergent and likely transformational program for leronlimab, as stated at the beginning, (which is now getting branded as Vyrologix by Cytodyn), is made for the Acute Respiratory Distress Syndrome (ARDS) brought on by COVID-19 that precludes the Sequential Organ Failure in fatal instances of COVID infections.
Leronlimab it seems that prevents the CCR5 receptor from over-responding to the virus and launching the today household word “cytokine storm”. Some proportion of patients apparently return from the brink after 2 treatments (and in some instances, one treatment) of leronlimab, even if intubated.
The company completed enrollment of a stage 2b/3 trial on December fifteen to “evaluate the efficacy as well as safety of leronlimab for people 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 media release.
This trial period concluded on January 12-ish, and if the results are positive, this can make leronlimab a premier treatment for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
While the vaccines that are currently diffusing are surely lending optimism 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 around the world as more and more men and women require utilization of Intensive Care Unit hospitalization.
During my first interview with Dr. Nader Pourhassan back in March of 2020, the extreme enthusiasm of his for the prospects of this drug’s efficacy was apparent.
It was prior to the now raging next wave had gathered heavy steam, as well as he was then noticing individuals which were getting leronlimab under the FDA’s Emergency Investigative New Drug exemption.
Within the time, nevertheless,, this little independent biotech without significant funding and 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 from it.
Full Disclosure: I own 10,000 shares at an average expense of $6.23
Although the world concentrates breathlessly on the hope for a brand new vaccine to restore the community liberties of theirs, the 10 ish fraction of COVID infectees who descend into the cytokine storm driven ARDS actually have their lives saved by this apparently flexible drug. For these people, a vaccine is pretty much useless.
This drug has “blockbuster potential” written all over it.
With 394 individuals enrolled inside the Phase 2b/3 trial as of December sixteen, and initially data expected this week, any demonstrable consistency in the details is going to record the world’s focus in probably the most profound way. Short sellers may be swept aside (at the very least temporarily) simply because company’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 extra 2.5 huge number of purchased for each of 2021 plus 2022 in a manufacturing arrangement with Samsung, based on its CEO.
really if leronlimab/PRO 140/Vyrologix is so great, how come the stock’s been stuck in sub-1dolar1 5 penny stock purgatory for so very long?
The fast answer is “OTC”.
Apart from dealing with a share price under $3, the company hasn’t been able to meet and keep some different quantitative requirements, like positive shareholders’ equity with a minimum of $5 million.
But in the NASDAQ community, you can find non-quantifiable behaviours by companies that create slow downs to NASDAQ listings. Overtly advertising communications are among such type of criteria that won’t ever cause a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn in addition has not been equipped to access capital under traditional ways, thanks to its being listed on the OTC, in addition to consequently un-attractive on that foundation alone to white colored shoe firms.
So, they’ve been lowered to accepting shareholder hostile OID debentures with ugly sales terms that produce a short-seller’s damp dream.
In November, they took 28.5 huge number of coming from Streeterville Capital of that just twenty five dolars million was paid to the company; $3.4 zillion will be the discount the Streeterville sections, and $100k is set aside to cover the bills. Streeterville is related with Illiad Trading and Research, that is managed by John Fife of Chicago Ventures Inc. Iliad has been referred to as a “legendary so called toxic lender”, by rival studies tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the price, Cytodyn has got to pay back $7.5 million a month. If they do not have the cash, they pay in stock; many lately, at a conversion cost of $3.40 a share.
Now just imagine when you’re an opportunistic low rent lender and you have gained a guaranteed 2.2 million shares coming the way of yours in the first week of each month. Any cost above the sales cost is pure profit. Remember – this guy is not an investor; he is a lender.
He is not operating on the hope 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 maximize upside via affordable transformation of share.
This is the brief seller’s wet dream I am discussing. Not only 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 understand that every month, like clockwork, there’s going to be two million+ shares striking the bid lowered by to $3.40.
The SEC isn’t impressed, and on September 3, 2020, filed a complaint.
The Securities and Exchange Commission today filed charges from John M. Fife of Companies and Chicago he controls for obtaining as well as marketing much more than twenty one billion shares of penny inventory without registering to be a securities dealer while using the SEC.
The SEC’s criticism, alleges this in between 2015 as well as 2020, Fife, as well as the businesses 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, frequently involved in the small business of buying convertible paperwork from penny stock issuers, transforming these notes into shares of stock at a big discount from the market price, and selling the newly issued shares into the marketplace at a substantial profit. The SEC alleges which Fife and his companies involved in around 250 convertible transactions with around 135 issuers, sold greater than 21 billion newly issued penny stock shares into the industry, and obtained greater than $61 million in earnings.
Streeterville Capital is not stated as an entity in the complaint. Which suggests that it was probably utilized by Fife and Cytodyn to avoid detection by the SEC that this same scheme was being perpetrated on Cytodyn at 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 inventory privately at ridiculously minimal prices, to the position where one wonders just who 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 following five (five) calendar months thereafter, the Company is required to bring down the exceptional balance with 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 transaction of each monthly Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the fifteen % prepayment premium.
Likewise detracting from the business’s gloss is actually the propensity of handling for endlessly marketing communications with shareholders. During an investor webcast on January 5th, the business had a number of sound testimonials from clients using PRO 140 for HIV treatment, backed by tear-jerking music, and therefore replete with emotional language devoid of information.
Even worse, the company’s cell phone number at the bottom of press releases has an extension for Nader Pourhassan, the CFO, and Mike Mulholland, the CEO, but neither one particular is a “valid extension” in accordance with the automatic phone system.
That’s the sort of approach that the FDA and SEC view unfavourably, and is likely at minimum in part the reason for their continued underdog status at both agencies.
The company also has come to be unresponsive to requests for interview, and so using the story coming out less than just these ill advised publicity stunts, shorts are attracted, and huge cash investors, alienated.
But think of this specific “management discount” as the chance to get a sizable position (should one be so inclined) contained what may really well turn out to be, in a matter of weeks, given that the leading treatment for serious COVID19 associated illness.
I expect the details in the trial now concluded for only such an indication may release the business into a complete new valuation altitude that will enable it to overpower these shortfalls.
Average trading volume is actually constant above six million shares a day, and before the tail end of this week, we’ll know just how efficient leronlimab/PRO 140/Vyrologix is at saving lives from the most severe of COVID nineteen. In case the outcomes are positive, this could be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)