Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug creator, has already delivered a win for Wealthpress subscribers from our 1st feature back in April this season. Billions have been invested directly into countless biotechs all competing to produce a cure or perhaps therapy for severe COVID 19 instances that result in death, and also none have succeeded. Except for Cytodyn, when early indications are established in the current trial now underway.
But right after a serious plunge on the company’s fiscal statements as well as SEC filings, a picture emerges of business control operating with a “toxic lender” to funnel severely discounted shares to the lender regularly. An investment in Cytodyn is actually a strictly speculative bet on the part of mine, of course, if the anticipated upward price movement does not appear following results in the company’s stage 2b/3 trial for severe-to-critical COVID-19, I will exit the investment.
If the company’s drug does in fact reliably save life in danger of severe-to-critical COVID19 individuals, subsequently 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 for instance those described below.
Cytodyn’s sole focus is creating remedies used on a monoclonal antibody called “leronlimab”, technically described as “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor sort five (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 expense of acquisition amounts to ten dolars million plus a 5 % net royalty on business revenue.
The drug was acquired on its early promise as an HIV treatment, for which continued research and development by Cytodyn has shown the ability to reduce regular drug cocktails with assortment pills into a specific monthly injection, sometimes, with 0 unwanted side effects. To particular date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific staff has realized the antibody’s influence on the CCR5 receptor has incredibly optimistic therapeutic implications for everything out of certain solid tumours to NASH (Non-alcoholic steatohepatitis), the liver function disorder which afflicts up to 12 % of the US population, and up to twenty six % globally.
But the real emergent and likely transformational program for leronlimab, as I have said at the beginning, (which is now getting branded as Vyrologix by Cytodyn), is for the Acute Respiratory Distress Syndrome (ARDS) brought on by COVID 19 that precludes the Sequential Organ Failure in fatal cases of COVID infections.
Leronlimab evidently prevents the CCR5 receptor from over-responding to the virus and also launching the today household-word “cytokine storm”. Some proportion of clients evidently return from the brink following 2 treatments (and in some instances, 1 treatment) of leronlimab, still when intubated.
The company completed enrollment of a phase 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, randomized, double blind, placebo controlled, adaptive design and style multicenter study,” based on the company’s media release.
This trial period concluded on January 12-ish, and if the outcomes are good, this will make leronlimab a premier therapy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
While the vaccines which are now spreading are definitely lending hope for a normalization of society by mid-2021, the surging worldwide rates of infection suggest the immediate future is right now overwhelming health care systems throughout the world as increasingly more individuals call for ability to access Intensive Care Unit hospitalization.
During my first interview with Dr. Nader Pourhassan returned in March of 2020, the serious enthusiasm of his for the prospects of the drug’s success was apparent.
It was before the currently raging second wave had gathered heavy steam, and he was then noticing individuals which were getting leronlimab under the FDA’s Emergency Investigative New Drug exemption.
At the time, nonetheless,, this small independent biotech with no big funding along with a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting ready to apply for a listing on NASDAQ, along with the deck was stacked against it.
Full Disclosure: I have 10,000 shares at an average price of $6.23
While the world concentrates breathlessly on the hope for the latest vaccine to restore the community liberties of theirs, the 10-ish fraction of COVID infectees that descend into the cytokine storm-driven ARDS literally have their day saved by this seemingly flexible drug. For them, a vaccine is practically pointless.
This particular drug has “blockbuster potential” written all over it.
With 394 patients enrolled in the Phase 2b/3 trial as of December 16, and initially data expected this week, a demonstrable consistency in the data is going to record the world’s focus in the most profound way. Quick sellers might be swept aside (at the very least temporarily) as the business’s brand new share price amounts qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses ready for sale now, with an additional 2.5 million purchased for each of 2021 and 2022 in a manufacturing agreement with Samsung, as per its CEO.
so if leronlimab/PRO 140/Vyrologix is very great, how come the stock’s been trapped in sub 1dolar1 5 penny stock purgatory for so very long?
The quick remedy is “OTC”.
Apart from struggling with a share price under three dolars, the company hasn’t been able to meet and maintain some different quantitative requirements, including positive shareholders’ equity of at least five dolars million.
But in the NASDAQ community, one can find non quantifiable behaviours by organizations that create delays to NASDAQ listings. Overtly promotional communications are among such type of criteria which will never result in a refusal letter…nor a NASDAQ listing.
Most importantly, Cytodyn has additionally not been in a position to access capital under conventional ways, thanks to its being mentioned on the OTC, in addition to therefore un-attractive on that basis alone to white colored shoe firms.
And so, they’ve been cut down to accepting shareholder-hostile OID debentures with ugly sales terms that produce a short-seller’s damp dream.
In November, they coppied 28.5 million out of Streeterville Capital of which just twenty five dolars million was paid to the company; $3.4 million is the discount the Streeterville pockets, and $100k is put aside to cover the expenses. Streeterville is linked with Illiad Research and Trading, which is managed by John Fife of Chicago Ventures Inc. Iliad has been called a “legendary so called toxic lender”, by rival research firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the offer, Cytodyn wants to pay back again $7.5 million a month. In case they don’t possess the cash, they pay within stock; many recently, at a conversion price of $3.40 a share.
Now just imagine if you’re an opportunistic low-rent lender and you have received an assured 2.2 million shares coming your way in the earliest week of each month. Any cost above the sales cost 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 maximize upside via discounted transformation of share.
This is the brief seller’s wet dream I am speaking about. Not merely is definitely the lender enticed to go short, but some short trading bucket repair shop in town who can fog a mirror and read an EDGAR filing realize that each month, like clockwork, there is going to be two million+ shares impacting the bid down to $3.40.
The SEC isn’t impressed, and on September three, 2020, filed a complaint.
The Securities in addition to the Exchange Commission these days filed charges from John M. Fife of Companies and Chicago he controls for acquiring as well as marketing much more than twenty one billion shares of penny stock without the need of registering to be a securities dealer using the SEC.
The SEC’s complaint, alleges this in between 2015 as well as 2020, Fife, as well as his companies, Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., in addition to the Typenex Co-Investment, LLC, routinely interested in the 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 offering the newly issued shares to the market at a sizable profit. The SEC alleges which Fife and his companies involved in around 250 convertible transactions with approximately 135 issuers, sold more than 21 billion newly-issued penny stock shares into the industry, and obtained greater than sixty one dolars million in profits.
Streeterville Capital isn’t stated as an entity of the complaint. Which implies that it was very likely used by Cytodyn as well as Fife to stay away from detection by the SEC that this same scheme was being perpetrated on Cytodyn within the time of its complaint.
But that’s not the only reason the stock cannot keep any upward momentum.
The company has been selling stock privately from ridiculously minimal prices, to the stage where one wonders just who exactly are the blessed winners of what requires no cost millions of dollars?
In addition, starting in the month of November 2020 and for each of the second five (five) calendar months thereafter, the Company is actually required to reduce the outstanding balance with the Note by $7,500,000 a month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes are going to be credited to the transaction of each month Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the fifteen % prepayment premium.
Additionally detracting from the business’s gloss is actually the propensity of handling for excessively promotional communications with shareholders. During an investor webcast on January 5th, the business had a number of sound testimonials from patients using PRO 140 for HIV treatment, backed by tear-jerking music, and therefore replete with mental language devoid of data.
Even worse, the company’s cell phone number at the bottom part of press releases comes with an extension for Mike Mulholland, the CFO, and Nader Pourhassan, the CEO, but neither one particular is a “valid extension” based on the automated system.
That is the kind of approach that the FDA and SEC view unfavourably, and is likely at least in part the reason behind the continued underdog status of theirs at both agencies.
The company has also turned out to be unresponsive to requests for interview, and therefore while using story coming out under only these ill-advised publicity stunts, shorts are attracted, and huge money investors, alienated.
But think of this specific “management discount” as the ability to purchase a sizable position (should someone be so inclined) contained what might really well prove to be, in a situation of weeks, since the top treatment for severe COVID19 related illness.
I expect the details in the trial now concluded for only such a sign might launch the business into a whole new valuation altitude that will enable it to overcome these shortfalls.
Average trading volume is actually steady above 6 million shares a day, and before the conclusion of this week, we will know exactly how efficient leronlimab/PRO 140/Vyrologix is actually for saving lives from the worst of COVID 19. In case the results are positive, this can be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)