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 members from our first feature back in April this season. Billions have been invested straight into hundreds of biotechs all competing to create a medicine or perhaps treatment for serious COVID 19 situations that trigger death, and also none have been successful. Except Cytodyn, when early indications are confirmed in the current trial now underway.
But right after a deep dive on the business’s monetary claims as well as SEC filings, an image emerges of company control operating having a “toxic lender” to direct severely discounted shares to the lender frequently. An investment in Cytodyn is actually a strictly speculative bet on the part of mine, and when the anticipated upward price movement does not occur following results in the company’s phase 2b/3 trial for severe-to-critical COVID 19, I will exit the investment.
If the company’s drug does in fact reliably conserve life in danger of severe-to-critical COVID19 individuals, then a groundswell of investor assistance could force the business into new, higher grade relationships, which would enable for the redemption of debentures and elimination of reliance on fly-by-night financings for instance those described below.
Cytodyn’s sole focus is actually creating treatments based on a monoclonal antibody called “leronlimab”, technically described as “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor sort five (CCR5)”. This particular engineered antibody was purchased from Progenics Pharmaceuticals as “PRO 140”, a recently-acquired subsidiary of Lantheus Holdings Inc (NASDAQ:LNTH), back in 2012.
Total price of acquisition amounts to ten dolars million and a 5 % net royalty on commercial sales.
The drug was acquired on its first promise as an HIV treatment, for which continued development as well as research by Cytodyn has shown the potential to reduce regular drug cocktails with myriad pills right into a specific monthly injection, in some cases, with zero side effects. To particular date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific team has realized the antibody’s effect on the CCR5 receptor has extremely positive therapeutic implications for everything out of some stable tumours to NASH (Non alcoholic steatohepatitis), the liver feature ailment which afflicts up to 12 % of the US public, and up to 26 % globally.
But the real emergent and likely transformational program for leronlimab, as I have said 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 in fatal cases of COVID infections.
Leronlimab apparently prevents the CCR5 receptor from over responding to the virus as well as launching the today household word “cytokine storm”. Some proportion of clients evidently return from the brink after 2 treatments (and in some cases, 1 treatment) of leronlimab, even when intubated.
The company finished enrollment of a stage 2b/3 trial on December fifteen to “evaluate the efficacy and safety of leronlimab for clients with severe-to-critical COVID-19 indications is a two-arm, placebo controlled, double blind, randomized, adaptive design and style 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 can make leronlimab a top treatment for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines which are currently 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 right now overwhelming health care systems around the world as a lot more people require ability to access Intensive Care Unit hospitalization.
During the first job interview of mine with Dr. Nader Pourhassan returned found March of 2020, his extreme eagerness for the prospects of the drug’s efficacy was evident.
It was before the now raging next wave had gathered heavy steam, and also he was then discovering individuals that were getting leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
At the time, however,, this little independent biotech without big funding and a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting prepared to apply for a listing on NASDAQ, along with 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 optimism for a new vaccine to restore their social liberties, the 10-ish fraction of COVID infectees that descend into the cytokine storm-driven ARDS actually have their lives saved by this seemingly versatile drug. For these people, a vaccine is basically pointless.
This drug has “blockbuster potential” written all over it.
With 394 patients enrolled inside the Phase 2b/3 trial as of December 16, along with initially data expected this week, a demonstrable consistency in the information will record the world’s focus in essentially the most profound way. Quick sellers might be swept aside (at least temporarily) while the company’s new share priced levels qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses prepared for sale right now, with an extra 2.5 zillion ordered for each of 2021 and 2022 in a manufacturing agreement with Samsung, based on its CEO.
so if leronlimab/PRO 140/Vyrologix is so great, why the stock’s been stuck in sub-1dolar1 5 penny stock purgatory for so very long?
The speedy solution is “OTC”.
Apart from faced with a share price under $3, the company hasn’t been able 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 businesses that create slow downs to NASDAQ listings. Overtly promotional communications are actually among these kinds of criteria that will never result in a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn has additionally not been equipped to access capital under conventional ways, thanks to its being mentioned on the OTC, along with therefore un attractive on that basis alone to white shoe firms.
So, they have been reduced to accepting shareholder-hostile OID debentures with ugly sales terms that generate a short-seller’s wet dream.
In November, they coppied 28.5 million from Streeterville Capital of which just $25 million was given to the company; $3.4 huge number of is the discount the Streeterville sections, and $100k is actually put aside to protect the expenses. Streeterville is linked with Illiad Research and Trading, which is controlled by John Fife of Chicago Ventures Inc. Iliad has been termed as a “legendary so called toxic lender”, by rival research tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the price, Cytodyn must pay back again $7.5 million each month. If they don’t have the cash, they pay in stock; most 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 received an assured 2.2 million shares coming the way of yours in the earliest week of each month. Any price above the sales price is pure profit. Remember – this guy is not an investor; he is a lender.
He is not operating on the hope that Cytodyn stock could go parabolic in the event that leronlimab is deemed a remedy for ARDS; his online business model is limiting risk and maximize upside via affordable transformation of share.
This’s the quick seller’s wet dream I am speaking about. Not merely is definitely the lender enticed to go short, but some short-trading container dealer in town who are able to fog a mirror and go through an EDGAR filing realize that each month, like clockwork, there’s going to be 2 million+ shares hitting the bid down to $3.40.
The SEC isn’t impressed, in addition, on September 3, 2020, filed a complaint.
The Securities as well as Exchange Commission today filed charges from John M. Fife of Companies and Chicago he controls for acquiring as well as promoting much more than twenty one billion shares of penny stock without registering as a securities dealer with the SEC.
The SEC’s criticism, alleges that in between 2015 and 2020, Fife, as well as his companies, Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., as well as Typenex Co Investment, LLC, regularly engaged in the business of buying convertible notes from penny stock issuers, converting these notes into shares of stock at a major discount from the market price, and selling the freshly issued shares to the marketplace at a sizable profit. The SEC alleges which Fife as well as his companies engaged in over 250 convertible transactions with approximately 135 issuers, sold greater than twenty one billion newly-issued penny stock shares to the market, and obtained greater than sixty one dolars million in profits.
Streeterville Capital isn’t mentioned as an entity of the complaint. Which suggests it was likely used by Fife as well as Cytodyn to stay away from detection by the SEC that 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 cannot keep some upward momentum.
The company has been selling inventory privately from ridiculously low prices, to the point where by one wonders just that exactly are the blessed winners of what amounts to free millions of dollars?
Furthermore, beginning within the month of November 2020 and also for every one of the following 5 (5) calendar days thereafter, the Company is required to reduce the exceptional sense of balance of 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 toward the payment of each monthly Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the 15 % prepayment premium.
Additionally detracting from the business’s gloss is actually the propensity of management for endlessly marketing communications with shareholders. During an investor webcast on January 5th, the business played a series of audio testimonials from clients making use of 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 level of press releases has an extension for Mike Mulholland, the CFO, and Nader Pourhassan, the CEO, but neither one particular is actually a “valid extension” based on the automated phone system.
That’s the sort of approach that the SEC and FDA view unfavourably, and is likely at minimum in part the reason for their continued underdog status at both agencies.
The company has additionally become unresponsive to requests for interviews, and so using the story coming out under only these ill-advised publicity stunts, shorts are actually attracted, and huge cash investors, alienated.
But think of this “management discount” as the opportunity to acquire a sizable job (should one be so inclined) contained what might very well turn out to be, in a situation of weeks, given that the best therapy for severe COVID19 associated illness.
I expect the details from your trial now concluded for only such a sign may release the company into a complete new valuation altitude that will enable it to overcome these shortfalls.
Average trading volume is steady above six million shares 1 day, and right before the end of this week, we will learn precisely how effective leronlimab/PRO 140/Vyrologix is actually at saving lives from the most severe of COVID 19. If the outcomes are good, this could be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)