Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug developer, has already shipped a win for Wealthpress subscribers from our first feature back in April this year. Billions have been invested straight into a huge selection of biotechs all competing to make a cure or treatment for severe COVID-19 instances which result in death, and none have been successful. Except Cytodyn, if early indications are confirmed in the current trial now underway.
But after a serious jump on the business’s fiscal claims and SEC filings, a picture emerges of company management 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, and when the anticipated upward price movement doesn’t manifest after results in the company’s stage 2b/3 trial for severe-to-critical COVID 19, I will exit the investment.
In case the business’s drug does actually reliably spend less life to come down with severe-to-critical COVID19 patients, then a groundswell of investor support may push the company into new, higher grade relationships, which would allow 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 creating therapies 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 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 $10 million plus a 5 % net royalty on business revenue.
The drug was acquired on its first promise as an HIV therapy, for which continued research and development by Cytodyn has shown the potential to reduce regular drug cocktails with assortment pills right into an individual monthly injection, sometimes, with 0 negative effects. To particular date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific team has realized the antibody’s influence on the CCR5 receptor has extremely positive therapeutic implications for everything out of some solid tumours to NASH (Non alcoholic steatohepatitis), the liver feature disorder that afflicts up to 12 percent 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 start, (which is currently getting branded as Vyrologix by Cytodyn), is for the Acute Respiratory Distress Syndrome (ARDS) caused by COVID 19 that precludes the Sequential Organ Failure in fatal situations of COVID infections.
Leronlimab it seems that prevents the CCR5 receptor from over responding to the virus and launching the today household word “cytokine storm”. Some proportion of individuals evidently 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 stage 2b/3 trial on December 15 to “evaluate the efficacy and safety of leronlimab for patients with severe-to-critical COVID-19 indications is actually a two-arm, placebo controlled, double blind, randomized, adaptive design 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 top therapy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Although the vaccines which are presently dispersing are surely lending hope for a normalization of society by mid 2021, the surging global rates of infection suggest the immediate future is right now overwhelming health care systems around the world as a lot more individuals call for access to Intensive Care Unit hospitalization.
During the first interview of mine with Dr. Nader Pourhassan returned found March of 2020, his extreme eagerness for the prospects of the drug’s effectiveness was evident.
This was prior to the currently raging second wave had gathered heavy steam, and also he was then discovering individuals that were receiving leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
Within the time, though, this little independent biotech without any big funding and a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting prepared to utilize for a listing on NASDAQ, and the deck was stacked against it.
Full Disclosure: I posses 10,000 shares from an average cost of $6.23
Although the world focuses breathlessly on the optimism for the latest vaccine to restore their social liberties, 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 pretty much pointless.
This particular drug has “blockbuster potential” authored all over it.
With 394 people enrolled with the Phase 2b/3 trial as of December 16, along with initially information expected this week, any demonstrable consistency in the information is going to record the world’s interest in probably the most profound way. Short sellers may be swept aside (at least temporarily) simply because business’s new share priced amounts qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses all set for sale right now, with an additional 2.5 zillion ordered for each of 2021 and 2022 in a manufacturing agreement with Samsung, according to its CEO.
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 quick remedy is “OTC”.
Besides dealing with a share price under three dolars, the company hasn’t been in a position to meet and keep certain other quantitative prerequisites, including positive shareholders’ equity that is at least five dolars million.
But in the NASDAQ world, you can find non quantifiable behaviours by businesses that can cause waiting times to NASDAQ listings. Overtly promotional communications are among such criteria which won’t ever lead to a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn in addition has not been in a position to access capital under traditional ways, thanks to its being mentioned on the OTC, in addition to therefore un-attractive on that foundation alone to white colored shoe firms.
Thus, they have been lowered to accepting shareholder hostile OID debentures with ugly conversion terms that generate a short-seller’s damp dream.
In November, they took 28.5 huge number of coming from Streeterville Capital of that just twenty five dolars million was paid to the company; $3.4 zillion is the discount the Streeterville pockets, and $100k is put aside to protect the expenditures. Streeterville is associated with Illiad Trading and Research, that is managed by John Fife of Chicago Ventures Inc. Iliad has been termed as a “legendary so-called toxic lender”, by rival research firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the deal, Cytodyn has to pay again $7.5 million per month. If they do not possess the cash, they pay inside stock; the majority of not long ago, within a conversion cost of $3.40 a share.
Now just imagine if you’re an opportunistic low rent lender and you’ve received an assured 2.2 million shares coming the way of yours in the first week of each month. Any price tag above the conversion cost is pure profit. Remember – this guy is not an investor; he is a lender.
He is not operating on the expectation that Cytodyn stock might go parabolic if leronlimab is deemed a cure for ARDS; the business model of his is to limit risk and maximize upside through affordable transformation of share.
This’s the brief seller’s wet dream I’m discussing. Not only would be the lender enticed to go short, but any short trading pail shop in town who could fog a mirror and read an EDGAR filing know that each month, like clockwork, there’s going to be 2 million+ shares striking the bid down to $3.40.
The SEC isn’t impressed, in addition, on September 3, 2020, filed a complaint.
The Securities in addition to the Exchange Commission nowadays filed charges from John M. Fife of Companies and Chicago he controls for acquiring as well as marketing much more than 21 billion shares of penny inventory without the need of registering to be a securities dealer using the SEC.
The SEC’s criticism, alleges that between 2015 as well as 2020, Fife, as well as his companies, Chicago Venture Partners, L.P., Iliad Research in addition to the Trading, L.P., St. George Investments LLC, Tonaquint, Inc., and Typenex Co Investment, LLC, regularly engaged in the small business of buying convertible notes from penny stock issuers, transforming these notes into shares of inventory at a major discount from the market cost, and offering the freshly issued shares to the marketplace at a sizable profit. The SEC alleges which Fife and the companies of his engaged in around 250 convertible transactions with around 135 issuers, sold more than twenty one billion newly issued penny stock shares to the market, and obtained more than sixty one dolars million in earnings.
Streeterville Capital isn’t stated as an entity in the complaint. Which suggests that it was likely utilized by Fife and Cytodyn to stay away from detection by the SEC that this same plan was being perpetrated on Cytodyn within the time of the complaint of its.
But that’s not the only reason the stock cannot observe some upward momentum.
The company has been selling stock privately from ridiculously low prices, to the position in which one wonders just who exactly are the fortunate winners of what amounts to free millions of dollars?
Moreover, beginning in the month of November 2020 and also for every one of the second 5 (5) calendar days thereafter, the Company is actually obliged to reduce the exceptional harmony belonging to the Note by $7,500,000 a month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes will likely be acknowledged toward the transaction of each monthly Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the fifteen % prepayment premium.
Likewise detracting from the company’s shine is the propensity of managing for endlessly marketing communications with shareholders. During an investor webcast on January 5th, the business played a number of audio testimonials from individuals making use of 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 level of press releases includes an extension for Nader Pourhassan, the CFO, and Mike Mulholland, the CEO, but neither one is a “valid extension” based on the automatic phone system.
That is the approach type that the FDA and SEC view unfavourably, and it is likely at the very least in part the reason behind their continued underdog status at both agencies.
The company has additionally become unresponsive to requests for interview, and therefore using the story coming out less than just 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 one be so inclined) found what could very well turn out to be, in a situation of weeks, since the leading treatment for severe COVID19 associated illness.
I expect the data from your trial now concluded for just such an indication could launch the business into a complete new valuation altitude that will permit it to overcome these shortfalls.
Average trading volume is steady above 6 million shares one day, and before the conclusion of this week, we will find out precisely how efficient leronlimab/PRO 140/Vyrologix is actually at saving lives from the most severe of COVID nineteen. In case the results are good, this can be a huge winner.
Cytodyn Inc (OTCMKTS:CYDY)