Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug designer, has already shipped 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 maybe therapy for severe COVID-19 instances that cause death, and none have been successful. Except Cytodyn, when early indications are established in the present trial now underway.
But after a serious jump on the company’s monetary statements and SEC filings, a picture emerges of company control functioning with a “toxic lender” to direct severely discounted shares to the lender regularly. An investment in Cytodyn is a purely speculative bet on the part of mine, of course, if the expected upward price movement does not occur after results of the company’s period 2b/3 trial for severe-to-critical COVID 19, I am going to exit the investment.
If the company’s drug does actually reliably save lives in severe-to-critical COVID19 patients, subsequently a groundswell of investor assistance may push the business into new, higher-grade human relationships, which would permit for the redemption of elimination as well as debentures of reliance on fly-by-night financings for instance those described 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 type five (CCR5)”. This engineered antibody was purchased of Progenics Pharmaceuticals as “PRO 140”, a recently acquired subsidiary of Lantheus Holdings Inc (NASDAQ:LNTH), back in 2012.
Total expense of acquisition amounts to $10 million and a five % net royalty on business revenue.
The drug was acquired on the early promise of its as an HIV treatment, for which continued development as well as research by Cytodyn has highlighted the capability to reduce daily drug cocktails with myriad pills into an individual monthly injection, sometimes, with 0 negative effects. To 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 extremely optimistic therapeutic implications for everything from some solid tumours to NASH (Non-alcoholic steatohepatitis), the liver feature ailment which afflicts up to twelve % of the US public, and up to twenty six % globally.
But the real emergent and potentially transformational program for leronlimab, as stated at the beginning, (which is currently getting branded as Vyrologix by Cytodyn), is designed for the Acute Respiratory Distress Syndrome (ARDS) due to COVID 19 that precludes the Sequential Organ Failure wearing fatal instances of COVID infections.
Leronlimab it seems that prevents the CCR5 receptor from over responding to the virus as well as launching the today household word “cytokine storm”. Some proportion of clients apparently return from the brink following two treatments (and in a number of instances, 1 treatment) of leronlimab, even when intubated.
The company completed enrollment of a phase 2b/3 trial on December fifteen to “evaluate the efficacy and safety of leronlimab for people with severe-to-critical COVID 19 indications is actually a two-arm, randomized, double blind, placebo controlled, adaptive style multicenter study,” according to the company’s press release.
This trial period concluded on January 12 ish, and if the outcomes are positive, this can make leronlimab a premier remedy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines which are currently dispersing are certainly lending hope for a normalization of society by mid-2021, the surging worldwide rates of illness mean the immediate future is right now overwhelming health care systems around the world as a lot more folks call for access to Intensive Care Unit hospitalization.
During the 1st interview of mine with Dr. Nader Pourhassan returned found March of 2020, his extreme interest for the prospects of this drug’s efficacy was apparent.
It was before the now raging second trend had gathered steam, as well as he was then noticing individuals who were receiving leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
Within the time, nevertheless,, this small independent biotech without big funding and a decidedly unhappy public listing on the naked short-sellers’ dream OTC marketplace was getting prepared to utilize for a listing on NASDAQ, as well as the deck was stacked against it.
Full Disclosure: I have 10,000 shares from an average cost of $6.23
Although the planet focuses breathlessly on the hope for the latest vaccine to regain the social liberties of theirs, the 10 ish percentage of COVID infectees that descend into the cytokine storm driven ARDS actually have their day saved by this apparently flexible drug. For these people, a vaccine is basically pointless.
This particular drug has “blockbuster potential” authored all over it.
With 394 individuals enrolled inside the Phase 2b/3 trial as of December 16, along with first data expected this week, any demonstrable consistency in the information is going to capture the world’s interest in likely the most profound way. Short sellers could be swept apart (at the very least temporarily) while the business’s brand new share price levels qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses ready for sale right now, with an extra 2.5 huge number of purchased for each of 2021 and 2022 in a manufacturing arrangement 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 five penny stock purgatory for such a long time?
The quick remedy is “OTC”.
Besides faced with a share price under $3, the company hasn’t been in a position to meet and maintain certain different quantitative requirements, including good shareholders’ equity that is at least $5 million.
But in the NASDAQ world, you can find non quantifiable behaviours by companies that cause delays to NASDAQ listings. Overtly advertising communications are actually among such criteria that won’t ever cause a refusal letter…nor a NASDAQ listing.
Most importantly, Cytodyn has also not been able to access capital under traditional ways, because of its being listed on the OTC, along with therefore un-attractive on that foundation alone to white shoe firms.
And so, they have been cut down to accepting shareholder-hostile OID debentures with ugly sales terms that create a short-seller’s stormy dream.
In November, they took 28.5 zillion from Streeterville Capital of that just $25 million was paid to the company; $3.4 zillion is the discount the Streeterville areas, and $100k is set aside to cover the bills. Streeterville is associated with Illiad Trading and Research, which is operated by John Fife of Chicago Ventures Inc. Iliad has been called a “legendary so-called poisonous lender”, by rival studies firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the offer, Cytodyn wants to pay back again $7.5 million every month. In case they do not possess the cash, they spend inside stock; the majority of not long ago, at a conversion price of $3.40 a share.
Now consider if you are an opportunistic low-rent lender and you’ve gained a guaranteed 2.2 million shares coming the way of yours in the earliest week of each month. Any cost above the sales price is pure profit. Remember – this guy isn’t an investor; he’s a lender.
He is not operating on the expectation that Cytodyn stock may go parabolic if leronlimab is deemed a cure for ARDS; the online business model of his is to limit risk and maximize upside via discounted conversion of share.
This is the brief seller’s wet dream I’m talking about. Not only is the lender enticed to go brief, but any short-trading pail repair shop in town who could fog a mirror and go through an EDGAR filing know that each month, like clockwork, there is going to be two million+ shares impacting 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 nowadays filed charges against John M. Fife of Chicago and Companies he controls for acquiring as well as marketing much more than twenty one billion shares of penny stock without the need of registering as a securities dealer with the SEC.
The SEC’s criticism, alleges this between 2015 as well as 2020, Fife, and also his companies, Chicago Venture Partners, L.P., Iliad Research in addition to the Trading, L.P., St. George Investments LLC, Tonaquint, Inc., in addition to the Typenex Co-Investment, LLC, routinely engaged in the small business of purchasing convertible paperwork at penny stock issuers, converting these notes into shares of inventory at a major discount from the market cost, and selling the newly issued shares to the market at a significant profit. The SEC alleges that Fife as well as his companies engaged in more than 250 convertible transactions with approximately 135 issuers, sold greater than twenty one billion newly issued penny stock shares to the industry, and obtained more than $61 million in earnings.
Streeterville Capital isn’t mentioned as an entity of the complaint. Which implies that it was probably used by Cytodyn and Fife to avoid detection by the SEC this same plan was being perpetrated on Cytodyn at the time of the complaint of its.
But that is not the sole reason the stock cannot keep any upward momentum.
The company has been offering inventory privately at ridiculously minimal prices, to the point where one wonders just who exactly are the blessed winners of what amounts to free millions of dollars?
Additionally, beginning in the month of November 2020 as well as for each of the following five (5) calendar days thereafter, the Company is required to cut down the excellent sense of balance of the Note by $7,500,000 a month (the “Debt Reduction Amount”). Payments the Company makes under the Prior Notes will likely be credited to the transaction of each monthly Debt Reduction Amount. The Debt Reduction Amount payments are not be subject to the 15 % prepayment premium.
Likewise detracting from the business’s gloss is the propensity of managing for endlessly promotional communications with shareholders. During an investor webcast on January 5th, the company had a number of sound testimonials from people applying PRO 140 for HIV treatment, backed by tear jerking music, and replete with emotional language devoid of data.
Even worse, the company’s mobile phone number at the bottom level of press releases includes 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 approach type that the SEC and FDA view unfavourably, and it is likely at minimum in part the reason behind their continued underdog status at both agencies.
The company has also become unresponsive to requests for interview, and so using the story coming out less than just these ill advised publicity stunts, shorts are attracted, and big money investors, alienated.
But think of this “management discount” as the opportunity to acquire a sizable role (should one be so inclined) found what could very well turn out to be, in a matter of weeks, since the leading therapy for severe COVID19 associated illness.
I expect the data in the trial now concluded for only such an indication may release the company into a complete new valuation altitude that will enable it to overcome these shortfalls.
Average trading volume is steady above 6 million shares one day, and before the tail end of this week, we will know exactly how efficient leronlimab/PRO 140/Vyrologix is actually at saving lives from the most severe of COVID 19. In case the results are positive, this may be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)