Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late stage biotech drug designer, has already delivered a win for Wealthpress subscribers from our first feature back in April this year. Billions have been invested into countless biotechs all competing to make a medicine or treatment for severe COVID 19 situations that cause death, and none have succeeded. Except Cytodyn, when early indications are established in the current trial now underway.
But after a serious dive on the business’s fiscal statements as well as SEC filings, an image emerges of business management functioning who have a “toxic lender” to funnel seriously discounted shares to the lender frequently. An investment in Cytodyn is a purely speculative bet on my part, and when the anticipated upward price movement does not manifest after results in the company’s stage 2b/3 trial for severe-to-critical COVID-19, I will exit the investment.
If the business’s drug does actually reliably spend less life to come down with severe-to-critical COVID19 individuals, then a groundswell of investor support can drive the organization into new, higher grade human relationships, which would allow 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 creating 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 particular engineered antibody was purchased 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 business sales.
The drug was acquired on the early promise of its as an HIV therapy, for which continued development and research by Cytodyn has shown the ability to reduce daily drug cocktails with myriad pills right into a single monthly injection, in some instances, with zero negative effects. To day, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific team has discovered the antibody’s influence on the CCR5 receptor has extremely optimistic therapeutic implications for everything out of certain stable tumours to NASH (Non alcoholic steatohepatitis), the liver feature disorder that afflicts up to twelve % of the US population, and up to 26 % globally.
But the real emergent also potentially transformational application for leronlimab, as I have said at the beginning, (which is currently being branded as Vyrologix by Cytodyn), is made for the Acute Respiratory Distress Syndrome (ARDS) brought on by COVID-19 which precludes the Sequential Organ Failure wearing fatal cases of COVID infections.
Leronlimab apparently prevents the CCR5 receptor from over responding to the virus and also 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 finished enrollment of a level 2b/3 trial on December 15 to “evaluate the efficacy and safety of leronlimab for clients with severe-to-critical COVID-19 indications is actually a two-arm, randomized, double blind, placebo controlled, adaptive design multicenter study,” according to the company’s press release.
This trial phase concluded on January 12 ish, of course, if the outcomes are good, this will make leronlimab a premier treatment for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines that are now spreading are definitely lending optimism for a normalization of modern culture by mid 2021, the surging worldwide rates of illness suggest the immediate future is right now overwhelming health care systems across the world as increasingly more individuals require utilization of Intensive Care Unit hospitalization.
During the first job interview of mine with Dr. Nader Pourhassan back found March of 2020, the extreme enthusiasm of his for the prospects of this drug’s success was evident.
This was before the now raging second wave had gathered steam, and also he was then discovering individuals that were getting leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
Within the time, although, this little independent biotech without significant funding and a decidedly unhappy public listing on the naked short-sellers’ fantasy OTC marketplace was getting able to apply for a listing on NASDAQ, and the deck was stacked from it.
Full Disclosure: I posses 10,000 shares at an average expense of $6.23
While the planet concentrates breathlessly on the hope for the latest vaccine to regain the social liberties of theirs, the 10 ish portion of COVID infectees that descend into the cytokine storm-driven ARDS literally have their day saved by this apparently flexible drug. To them, a vaccine is practically pointless.
This drug has “blockbuster potential” written all over it.
With 394 individuals enrolled in the Phase 2b/3 trial as of December 16, along with first data expected this week, any demonstrable consistency in the data is going to capture the world’s focus in essentially the most profound way. Short sellers might be swept aside (at minimum temporarily) as the business’s new share priced amounts qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses ready for sale right now, with an additional 2.5 million ordered for each of 2021 as well as 2022 in a manufacturing arrangement with Samsung, as per the CEO of its.
so if leronlimab/PRO 140/Vyrologix is so great, why the stock’s been trapped in sub-1dolar1 five penny stock purgatory for so very long?
The speedy remedy is “OTC”.
Apart from faced with a share price under three dolars, the company hasn’t been able to meet and maintain some different quantitative requirements, like positive shareholders’ equity with a minimum of $5 million.
But in the NASDAQ world, one can find non-quantifiable behaviours by companies that create delays to NASDAQ listings. Overtly promotional communications are actually among such criteria that will never lead to a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn in addition has not been equipped to access capital under traditional means, thanks to its being mentioned on the OTC, and thus un attractive on that foundation alone to white shoe firms.
Thus, they have been cut down to accepting shareholder-hostile OID debentures with unsightly sales terms that create a short-seller’s damp dream.
In November, they borrowed 28.5 million coming from Streeterville Capital of which just $25 million was paid to the company; $3.4 million will be the discount the Streeterville sections, and $100k is put aside to protect the expenses. Streeterville is actually related with Illiad Research and Trading, that is managed 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 phrases of the offer, Cytodyn has got to pay back again $7.5 million each month. In case they do not possess the cash, they spend within stock; most lately, within a conversion price of $3.40 a share.
These days just think about when you’re an opportunistic low rent lender and you have got an assured 2.2 million shares coming your way in the very first week of every month. Any cost above the conversion price is pure profit. Remember – this guy isn’t an investor; he is a lender.
He’s not operating on the expectation that Cytodyn stock may go parabolic in the event that leronlimab is deemed a remedy for ARDS; his online business model is to limit risk and optimize upside via affordable transformation of share.
This’s the quick seller’s wet dream I’m discussing. Not only is the lender enticed to go short, but any short trading bucket dealer in town who can fog a mirror and read an EDGAR filing realize that every 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 3, 2020, filed a criticism.
The Securities and Exchange Commission today filed charges from John M. Fife of Companies and Chicago he controls for acquiring and marketing more than twenty one billion shares of penny stock without the need of registering as a securities dealer using the SEC.
The SEC’s criticism, alleges this in between 2015 and 2020, Fife, and his businesses, Chicago Venture Partners, L.P., Iliad Research in addition to the Trading, L.P., St. George Investments LLC, Tonaquint, Inc., as well as Typenex Co Investment, LLC, frequently engaged in the business of purchasing convertible notes from penny stock issuers, transforming those notes into shares of stock at a major discount from the market price, and offering the freshly issued shares to the marketplace at a sizable profit. The SEC alleges that Fife as well as the companies of his interested in around 250 convertible transactions with roughly 135 issuers, sold more than twenty one billion newly issued penny stock shares to the industry, and obtained greater than $61 million in profits.
Streeterville Capital is not mentioned as an entity in the complaint. Which hints that it was very likely utilized by Cytodyn as well as Fife to stay away from detection by the SEC that this very same scheme was getting perpetrated on Cytodyn within the time of the complaint of its.
But that is not the only reason the stock can’t observe any upward momentum.
The company has been selling inventory privately from ridiculously low prices, to the point where one wonders just who exactly are the fortunate winners of what requires no cost millions of dollars?
Furthermore, starting in the month of November 2020 and also for every one of the next five (5) calendar days thereafter, the Company is required to lower the exceptional harmony 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 monthly Debt Reduction Amount. The Debt Reduction Amount payments are not be subject to the fifteen % prepayment premium.
Likewise detracting from the business’s shine is actually the propensity of managing for excessively marketing communications with shareholders. During an investor webcast on January 5th, the business had a compilation of audio testimonials from clients using PRO 140 for HIV therapy, backed by tear-jerking music, and therefore replete with emotional language devoid of information.
Even worse, the company’s telephone number at the bottom of press releases comes with an extension for Nader Pourhassan, the CFO, and Mike Mulholland, the CEO, but neither one particular is actually a “valid extension” in accordance with the automated system.
That is the sort of approach that the FDA and SEC view unfavourably, and is likely at the very least 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 thus using the story coming out under just these ill-advised publicity stunts, shorts are actually attracted, and big cash investors, alienated.
But think of this specific “management discount” as the chance to get a sizable job (should someone be so inclined) in what could really well turn out to be, in a situation of weeks, as the leading therapy for severe COVID19 associated illness.
I expect the details in the trial now concluded for just such an indication may launch the company into a whole new valuation altitude that will enable it to overpower these shortfalls.
Average trading volume is actually constant above six million shares 1 day, and before the tail end of this week, we’ll know exactly how efficient leronlimab/PRO 140/Vyrologix is actually for saving lives from the worst of COVID nineteen. If the outcomes are good, this can be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)