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 first feature returned in April this year. Billions have been invested directly into a huge selection of biotechs all competing to make a medicine or perhaps treatment for serious COVID-19 situations which result in death, and also none have succeeded. Except for Cytodyn, if early indications are established in the current trial now underway.
But right after a serious jump on the company’s fiscal statements as well as SEC filings, an image emerges of company management operating who have a “toxic lender” to funnel severely discounted shares to the lender frequently. An investment in Cytodyn is a strictly speculative bet on the part of mine, and if the anticipated upward price movement doesn’t occur following 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 business’s drug does actually reliably conserve lifestyles in severe-to-critical COVID19 patients, subsequently a groundswell of investor support could force the business into new, higher grade relationships, which would enable for the redemption of elimination and debentures of reliance on fly-by-night financings for example those described below.
Cytodyn’s sole focus is actually creating treatments used on a monoclonal antibody called “leronlimab”, technically called “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor sort five (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 and a five % net royalty on commercial revenue.
The drug was acquired on its early promise as an HIV therapy, for which continued research and development by Cytodyn has shown the potential to reduce daily drug cocktails with assortment pills into an individual monthly injection, sometimes, with 0 negative effects. To day, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific staff has found the antibody’s effect on the CCR5 receptor has incredibly positive therapeutic implications for everything from certain stable tumours to NASH (Non alcoholic steatohepatitis), the liver function ailment which afflicts up to twelve percent of the US population, and up to twenty six % globally.
But the real emergent also potentially transformational application for leronlimab, as stated at the start, (which is now being branded as Vyrologix by Cytodyn), is designed for the Acute Respiratory Distress Syndrome (ARDS) due to COVID-19 that 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 today household-word “cytokine storm”. Some proportion of patients apparently return from the brink following two treatments (and in a number of 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 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 and style multicenter study,” according to the company’s media release.
This trial period concluded on January 12-ish, and if the outcomes are good, this will make leronlimab a top remedy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines that are currently circulating are certainly lending hope for a normalization of society by mid 2021, the surging worldwide rates of contamination mean the immediate future is already overwhelming health care systems around the world as a lot more individuals call for access to Intensive Care Unit hospitalization.
During my first job interview with Dr. Nader Pourhassan returned contained March of 2020, his serious eagerness for the prospects of the drug’s effectiveness was evident.
It was prior to the now raging second wave had gathered vapor, and he was then discovering patients which were receiving leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
At the time, nonetheless,, this little independent biotech without major funding along with a decidedly unhappy public listing on the naked short-sellers’ dream OTC marketplace was getting ready to apply for a listing on NASDAQ, as well as the deck was stacked against it.
Full Disclosure: I own 10,000 shares from an average price of $6.23
Although the world focuses breathlessly on the optimism for the latest vaccine to regain the community liberties of theirs, the 10 ish percentage of COVID infectees that descend into the cytokine storm-driven ARDS literally have their lives saved by this seemingly flexible drug. For these people, a vaccine is basically useless.
This drug has “blockbuster potential” authored all over it.
With 394 people enrolled inside the Phase 2b/3 trial as of December sixteen, and first data expected this week, a demonstrable consistency in the details will record the world’s attention in the most profound way. Short sellers could be swept apart (at minimum temporarily) simply because business’s brand new share price amounts qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses ready for sale right now, with an extra 2.5 million purchased for each of 2021 as well as 2022 in a manufacturing understanding with Samsung, as per its CEO.
really if leronlimab/PRO 140/Vyrologix is very great, why the stock’s been trapped in sub-1dolar1 five penny stock purgatory for so very long?
The speedy remedy is “OTC”.
Besides dealing with a share price under $3, the company has not been equipped to meet and maintain certain different quantitative requirements, including positive shareholders’ equity of at least $5 million.
But in the NASDAQ world, one can find non-quantifiable behaviours by organizations that cause slow downs to NASDAQ listings. Overtly advertising communications are 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 able to access capital under traditional means, because of its being listed on the OTC, in addition to thus un-attractive on that basis alone to white colored shoe firms.
And so, they’ve been lowered to accepting shareholder hostile OID debentures with unsightly conversion terms that create a short-seller’s wet dream.
In November, they coppied 28.5 huge number of out of Streeterville Capital of that only $25 million was paid to the company; $3.4 million will be the discount the Streeterville areas, and $100k is put aside to protect the costs. Streeterville is actually associated with Illiad Trading and Research, which is controlled by John Fife of Chicago Ventures Inc. Iliad has been termed as a “legendary so-called toxic lender”, by rival studies firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the deal, Cytodyn has got to pay back again $7.5 million each month. If they do not possess the cash, they spend inside stock; many lately, at a sales cost of $3.40 a share.
Now just imagine when you are an opportunistic low rent lender and you have gained a certain 2.2 million shares coming the way of yours in the very first week of each month. Any cost above the sales expenditure is pure profit. Remember – this guy is not an investor; he is a lender.
He is not operating on the expectation that Cytodyn stock could go parabolic if leronlimab is deemed a remedy for ARDS; his online business model is limiting risk and maximize upside through discounted transformation of share.
This is the brief seller’s wet dream I’m talking about. Not merely would be the lender enticed to go brief, but any short-trading pail dealer in town who can fog a mirror and examine an EDGAR filing realize that each month, like clockwork, there is going to be 2 million+ shares striking the bid lowered by to $3.40.
The SEC is not impressed, additionally, on September three, 2020, filed a complaint.
The Securities and Exchange Commission nowadays filed charges against John M. Fife of Chicago and Companies he controls for acquiring as well as marketing much more than 21 billion shares of penny stock without any registering as a securities dealer using the SEC.
The SEC’s criticism, alleges this in between 2015 and 2020, Fife, and also the businesses of his, Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., and Typenex Co-Investment, LLC, routinely involved in the small business of buying convertible paperwork at penny stock issuers, converting the notes into shares of inventory at a big discount from the market cost, and selling the freshly issued shares to the marketplace at a substantial profit. The SEC alleges which Fife and his companies interested in more than 250 convertible transactions with around 135 issuers, sold more than twenty one billion newly issued penny stock shares to the industry, and obtained more than $61 million in profits.
Streeterville Capital is not stated as an entity of the complaint. Which hints that it was probably utilized by Cytodyn and Fife to avoid detection by the SEC that this same plan was being perpetrated on Cytodyn within the time of its complaint.
But that’s not the sole reason the stock can’t keep any upward momentum.
The company has been offering stock privately at ridiculously low prices, to the stage in which one wonders just that exactly are the blessed winners of what requires free millions of dollars?
Additionally, beginning inside the month of November 2020 and also for every one of the second five (5) calendar days thereafter, the Company is obligated to reduce the exceptional 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 are going to be credited toward the transaction of each monthly Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the fifteen % prepayment premium.
Also detracting from the company’s shine is the propensity of handling for endlessly marketing communications with shareholders. During an investor webcast on January 5th, the business had a compilation of sound testimonials from individuals using PRO 140 for HIV treatment, backed by tear-jerking music, and then replete with emotional language devoid of data.
Worse, the company’s mobile phone number at the bottom part of press releases has an extension for Nader Pourhassan, the CFO, and Mike Mulholland, 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 minimum in part the reason behind the continued underdog status of theirs at both agencies.
The company also has come to be unresponsive to requests for interview, and so while using story coming out under merely these ill-advised publicity stunts, shorts are attracted, and big cash investors, alienated.
But think of this “management discount” as the opportunity to purchase a sizable job (should someone be so inclined) contained what may really well prove to be, in a matter of weeks, since the best treatment for serious COVID19 related illness.
I expect the data from your trial now concluded for only such an indication could release the company into a complete new valuation altitude that will allow it to get over these shortfalls.
Average trading volume is steady above 6 million shares a day, and before the end of this week, we will know exactly how effective leronlimab/PRO 140/Vyrologix is actually at saving lives from the worst of COVID nineteen. If the outcomes are positive, this can be a significant winner.
Cytodyn Inc (OTCMKTS:CYDY)