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 first feature back in April this year. Billions have been invested straight into hundreds of biotechs all competing to make a medicine or perhaps therapy for severe COVID 19 situations that result in death, and none have succeeded. Except Cytodyn, if early indications are verified in the present trial now underway.
But after a deep dive on the business’s financial statements and SEC filings, an image emerges of company 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 my part, of course, if the anticipated upward price movement doesn’t manifest following results in the company’s phase 2b/3 trial for severe-to-critical COVID-19, I am going to exit the investment.
If the business’s drug does in fact reliably conserve lifestyles in severe-to-critical COVID19 individuals, subsequently a groundswell of investor support may push the business into completely 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 discussed below.
Cytodyn’s sole focus is developing remedies based on a monoclonal antibody known as “leronlimab”, technically called “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor type 5 (CCR5)”. This engineered antibody was obtained 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 sales.
The drug was acquired on its first promise as an HIV treatment, for which continued research as well as development by Cytodyn has shown the potential to reduce daily drug cocktails with assortment pills into an individual monthly injection, in some instances, with zero negative effects. To date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific team has discovered the antibody’s impact on the CCR5 receptor has incredibly positive therapeutic implications for everything out of some solid tumours to NASH (Non-alcoholic steatohepatitis), the liver feature condition which afflicts up to 12 percent of the US public, and up to 26 % globally.
But the real emergent and potentially transformational application for leronlimab, as mentioned at the start, (which is now being branded as Vyrologix by Cytodyn), is made for the Acute Respiratory Distress Syndrome (ARDS) due to COVID 19 which precludes the Sequential Organ Failure in fatal instances of COVID infections.
Leronlimab it seems that blocks the CCR5 receptor from over-responding to the virus and also launching the now household word “cytokine storm”. Some proportion of clients evidently return from the brink after two treatments (and in some cases, one treatment) of leronlimab, still 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 style multicenter study,” based on the company’s media release.
This trial phase concluded on January 12-ish, and if the results are positive, this can make leronlimab a top treatment for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines which are presently diffusing are surely lending optimism for a normalization of modern culture by mid 2021, the surging global rates of illness suggest 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 my first job interview with Dr. Nader Pourhassan back in March of 2020, his extreme interest for the prospects of this drug’s efficacy was apparent.
This was before the now raging second wave had gathered heavy steam, and he was then seeing individuals that were getting leronlimab under the FDA’s Emergency Investigative New Drug exemption.
Within the time, though, this small independent biotech without significant funding and a decidedly unhappy public listing on the naked short-sellers’ fantasy OTC marketplace was getting ready to apply for a listing on NASDAQ, along with the deck was stacked from it.
Full Disclosure: I own 10,000 shares from an average cost of $6.23
While the planet concentrates breathlessly on the optimism for a new vaccine to restore their community liberties, the 10-ish fraction of COVID infectees that descend into the cytokine storm-driven ARDS literally have their lives saved by this apparently versatile drug. For these people, a vaccine is basically useless.
This particular drug has “blockbuster potential” authored all over it.
With 394 people enrolled inside the Phase 2b/3 trial as of December 16, and first information expected this week, any demonstrable consistency in the data is going to capture the world’s focus in probably the most profound way. Short sellers might be swept apart (at the very least temporarily) simply because company’s new share priced amounts qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses ready for sale right now, with an additional 2.5 million purchased for each of 2021 plus 2022 in a manufacturing arrangement with Samsung, as per its CEO.
really if leronlimab/PRO 140/Vyrologix is so great, how come the stock’s been stuck in sub 1dolar1 five penny stock purgatory for so long?
The fast answer is “OTC”.
Apart from struggling with a share price under $3, the company hasn’t been in a position to meet and maintain certain other quantitative requirements, like positive shareholders’ equity of at least $5 million.
But in the NASDAQ world, one can find non quantifiable behaviours by companies that create slow downs to NASDAQ listings. Overtly advertising communications are actually among such type of criteria which will never result in a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn has additionally not been equipped to access capital under traditional means, because of its being listed on the OTC, and thus un-attractive on that basis alone to white colored shoe firms.
And so, they have been reduced to accepting shareholder-hostile OID debentures with unsightly conversion terms that produce a short-seller’s stormy dream.
In November, they borrowed 28.5 huge number of coming from Streeterville Capital of which only twenty five dolars million was paid to the company; $3.4 huge number of will be the discount the Streeterville sections, and $100k is actually put aside to cover the bills. Streeterville is related with Illiad Research and Trading, that is operated by John Fife of Chicago Ventures Inc. Iliad has been termed as a “legendary so called poisonous lender”, by rival research firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the offer, Cytodyn must pay again $7.5 million a month. If they do not have the cash, they pay within stock; most not long ago, within 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 your way in the earliest week of each month. Any price tag above the sales cost is pure profit. Remember – this guy is not an investor; he’s a lender.
He’s not operating on the expectation that Cytodyn stock might go parabolic if leronlimab is deemed a remedy for ARDS; the business model of his is to limit risk and optimize upside through affordable conversion of share.
This is the short seller’s wet dream I am discussing. Not merely would be the lender enticed to go brief, but any short trading container shop in town who can fog a mirror and examine an EDGAR filing understand that every month, like clockwork, there’s going to be two million+ shares hitting the bid lowered by to $3.40.
The SEC is not impressed, in addition, on September 3, 2020, filed a criticism.
The Securities as well as Exchange Commission nowadays filed charges against John M. Fife of Companies and Chicago he controls for acquiring as well as selling more than 21 billion shares of penny stock without the need of registering as a securities dealer while using the SEC.
The SEC’s complaint, alleges this in between 2015 and 2020, Fife, and 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, regularly engaged in the company of buying sports convertible paperwork from penny stock issuers, converting these notes into shares of stock at a large discount from the market cost, and selling the freshly issued shares to the market at a significant profit. The SEC alleges that Fife and his companies interested in over 250 sports convertible transactions with approximately 135 issuers, sold more than 21 billion newly-issued penny stock shares into the market, and obtained greater than $61 million in profits.
Streeterville Capital is not stated as an entity of the complaint. Which implies it was probably used by Fife as well as Cytodyn to avoid detection by the SEC this very same scheme was being perpetrated on Cytodyn at the time of the complaint of its.
But that’s not the sole reason the stock cannot observe some upward momentum.
The company has been offering inventory privately at ridiculously minimal prices, to the stage where by one wonders just that exactly are the lucky winners of what amounts to no cost millions of dollars?
Moreover, starting within the month of November 2020 and also for each of the next five (five) calendar months thereafter, the Company is obligated to bring down the exceptional balance with the Note by $7,500,000 per month (the “Debt Reduction Amount”). Payments the Company makes under the Prior Notes will be acknowledged to the transaction of each monthly Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the 15 % prepayment premium.
Additionally detracting from the company’s gloss is actually the propensity of handling for endlessly promotional communications with shareholders. During an investor webcast on January 5th, the company played a compilation 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.
Even worse, the company’s cell phone 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 a “valid extension” in accordance with the automatic system.
That’s the type of approach that the FDA and SEC view unfavourably, and is likely at minimum in part the reason for the continued underdog status of theirs at both agencies.
The company has also become unresponsive to requests for interviews, and so with the story coming out less than merely these ill advised publicity stunts, shorts are actually attracted, and big money investors, alienated.
But think of this particular “management discount” as the opportunity to get a sizable role (should one be so inclined) found what might very well prove to be, in a situation of weeks, given that the top therapy for serious COVID19 associated illness.
I expect the data in the trial now concluded for just such an indication could release the business into a whole new valuation altitude that will permit it to overcome these shortfalls.
Average trading volume is actually continuous above 6 million shares 1 day, and right before the end of this week, we will find out exactly how efficient leronlimab/PRO 140/Vyrologix is at saving lives from the worst of COVID nineteen. If the results are good, this can be a huge winner.
Cytodyn Inc (OTCMKTS:CYDY)