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 members from our first feature returned in April this season. Billions have been invested into countless biotechs all competing to produce a cure or perhaps therapy for serious COVID-19 situations which trigger death, and none have been successful. Except Cytodyn, when early indications are verified in the present trial now underway.
But right after a deep dive on the company’s monetary claims and SEC filings, a picture emerges of company management working having 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, of course, if the anticipated upward price movement does not occur after results in the company’s phase 2b/3 trial for severe-to-critical COVID-19, I will exit the investment.
In case the company’s drug does actually reliably save lives to come down with severe-to-critical COVID19 individuals, then a groundswell of investor support may drive the business into new, higher-grade human relationships, which would allow for the redemption of debentures and elimination of reliance on fly-by-night financings for instance those discussed below.
Cytodyn’s sole focus is actually creating treatments used on a monoclonal antibody called “leronlimab”, technically described as “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor sort 5 (CCR5)”. This engineered antibody was acquired from 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 commercial revenue.
The drug was acquired on the early promise of its as an HIV treatment, for which continued research as well as development by Cytodyn has demonstrated the ability to reduce daily drug cocktails with assortment pills right into an individual monthly injection, in some cases, with 0 side effects. To day, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific team has discovered the antibody’s effect on the CCR5 receptor has extremely optimistic therapeutic implications for everything out of certain stable tumours to NASH (Non-alcoholic steatohepatitis), the liver function disorder that afflicts up to 12 % of the US population, and up to twenty six % globally.
But the real emergent and likely transformational application for leronlimab, as stated at the start, (which is currently getting branded as Vyrologix by Cytodyn), is for the Acute Respiratory Distress Syndrome (ARDS) due to COVID-19 which precludes the Sequential Organ Failure wearing fatal cases of COVID infections.
Leronlimab evidently prevents the CCR5 receptor from over responding to the virus and also launching the now household-word “cytokine storm”. Some proportion of individuals apparently return from the brink following 2 treatments (and in a number of instances, 1 treatment) of leronlimab, still if intubated.
The company finished enrollment of a phase 2b/3 trial on December 15 to “evaluate the efficacy and safety of leronlimab for individuals with severe-to-critical COVID 19 indications is actually a two-arm, randomized, double blind, placebo controlled, adaptive design multicenter study,” according to the company’s press release.
This trial period concluded on January 12-ish, of course, if the outcomes are good, this will make leronlimab a high therapy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Although the vaccines that are presently spreading are definitely lending hope for a normalization of modern society by mid 2021, the surging global rates of disease suggest the immediate future is already overwhelming health care systems throughout the world as more and more individuals require access to Intensive Care Unit hospitalization.
During the first interview of mine with Dr. Nader Pourhassan back found March of 2020, the extreme eagerness of his for the prospects of the drug’s success was evident.
This was prior to the now raging next trend had gathered steam, and also he was then seeing patients that were receiving leronlimab under the FDA’s Emergency Investigative New Drug exemption.
Within the time, however,, this little independent biotech without big funding along with a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting ready to utilize for a listing on NASDAQ, as well as the deck was stacked from it.
Full Disclosure: I have 10,000 shares at an average price of $6.23
Although the world focuses breathlessly on the hope for a new vaccine to restore the social liberties of theirs, the 10 ish fraction of COVID infectees that descend into the cytokine storm-driven ARDS actually have their lives saved by this seemingly flexible drug. For these people, a vaccine is pretty much useless.
This drug has “blockbuster potential” authored all over it.
With 394 patients enrolled inside the Phase 2b/3 trial as of December 16, and first data expected this week, a demonstrable consistency in the information will record the world’s focus in essentially the most profound way. Quick sellers may be swept aside (at minimum temporarily) simply because business’s brand new share priced amounts qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses ready for sale right now, with an extra 2.5 huge number of purchased for each of 2021 plus 2022 in a manufacturing understanding with Samsung, according to the CEO of its.
so if leronlimab/PRO 140/Vyrologix is so great, how come the stock’s been trapped in sub-1dolar1 five penny stock purgatory for so long?
The speedy answer is “OTC”.
Apart from dealing with a share price under three dolars, the company hasn’t been in a position to meet and maintain some different quantitative prerequisites, like good shareholders’ equity of at least $5 million.
But in the NASDAQ world, there are non-quantifiable behaviours by companies that create delays to NASDAQ listings. Overtly advertising communications are actually among such type of criteria that won’t ever lead to a refusal letter…nor a NASDAQ listing.
Most importantly, Cytodyn has also not been equipped to access capital under traditional means, because of its being listed on the OTC, in addition to consequently un-attractive on that foundation alone to white shoe firms.
Thus, they have been lowered to accepting shareholder hostile OID debentures with unsightly sales terms that create a short-seller’s stormy dream.
In November, they borrowed 28.5 million out of Streeterville Capital of that only $25 million was given to the company; $3.4 zillion is the discount the Streeterville sections, and $100k is actually set aside to cover the expenses. Streeterville is related with Illiad Research and Trading, which is controlled by John Fife of Chicago Ventures Inc. Iliad has been referred to as a “legendary so called poisonous lender”, by rival studies tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the offer, Cytodyn has to pay again $7.5 million every month. If they do not have the cash, they spend inside stock; most lately, at a sales price of $3.40 a share.
These days just imagine when you’re an opportunistic low-rent lender and you’ve gained a guaranteed 2.2 million shares coming the way of yours in the very first week of each month. Any cost above the conversion expenditure is pure profit. Remember – this guy isn’t an investor; he is a lender.
He is not operating on the hope that Cytodyn stock may go parabolic in the event that leronlimab is deemed a cure for ARDS; his business model is to limit risk and optimize upside via discounted transformation of share.
This is the short seller’s wet dream I’m speaking about. Not only would be the lender enticed to go short, but some short-trading bucket shop in town who can 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 these days filed charges against John M. Fife of Chicago and Companies he controls for obtaining and selling more than 21 billion shares of penny inventory without the need of registering to be a securities dealer while using the SEC.
The SEC’s criticism, alleges this between 2015 and 2020, Fife, and his companies, Chicago Venture Partners, L.P., Iliad Research as well as Trading, L.P., St. George Investments LLC, Tonaquint, Inc., as well as Typenex Co-Investment, LLC, routinely involved in the company of buying sports convertible paperwork from penny stock issuers, transforming these notes into shares of inventory at a large discount from the market cost, and offering the newly issued shares to the market at a substantial profit. The SEC alleges which Fife and his businesses engaged in more than 250 sports convertible transactions with around 135 issuers, sold greater than twenty one billion newly issued penny stock shares to the market, and obtained more than $61 million in profits.
Streeterville Capital is not mentioned as an entity of the complaint. Which implies that it was probably applied by Cytodyn and Fife to avoid detection by the SEC this very same scheme was being perpetrated on Cytodyn within the time of the complaint of its.
But that’s not the only reason the stock can’t observe any upward momentum.
The company has been selling stock privately from ridiculously minimal prices, to the point where one wonders just that exactly are the lucky winners of what requires no cost millions of dollars?
Furthermore, starting inside the month of November 2020 and also for each of the following five (5) calendar months thereafter, the Company is actually required to cut down the excellent balance with the Note by $7,500,000 a month (the “Debt Reduction Amount”). Payments the Company makes under the Prior Notes are going to be credited to the transaction of each month Debt Reduction Amount. The Debt Reduction Amount payments are not be subject to the 15 % prepayment premium.
Additionally detracting from the company’s gloss is the propensity of handling for excessively promotional communications with shareholders. During an investor webcast on January 5th, the business had a number of audio testimonials from patients making use of PRO 140 for HIV treatment, backed by tear-jerking music, and replete with emotional language devoid of information.
Worse, the company’s telephone number at the bottom of press releases has an extension for Mike Mulholland, the CFO, and Nader Pourhassan, the CEO, but neither one particular is a “valid extension” in accordance with the automatic phone system.
That is the approach type that the SEC and FDA view unfavourably, and it is likely at the very least in part the reason behind their continued underdog status at both agencies.
The company has additionally become unresponsive to requests for interview, and therefore while using story coming out less than merely these ill advised publicity stunts, shorts are actually attracted, and huge money investors, alienated.
But think of this specific “management discount” as the ability to buy a sizable position (should someone be so inclined) found what could really well prove to be, in a question of weeks, given that the best therapy for severe COVID19 associated illness.
I expect the data from your trial now concluded for just such an indication may release the organization into a whole new valuation altitude that will enable it to overcome these shortfalls.
Average trading volume is actually steady above 6 million shares 1 day, and right before the end of this week, we will find out precisely how effective leronlimab/PRO 140/Vyrologix is at saving lives from the most severe of COVID nineteen. If the results are positive, this could be a significant winner.
Cytodyn Inc (OTCMKTS:CYDY)