Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug creator, has already shipped a win for Wealthpress members from our 1st feature returned in April this season. Billions have been invested straight into countless biotechs all competing to make a medicine or therapy for severe COVID-19 instances that result in death, and also none have been successful. Except Cytodyn, if early indications are established in the present trial now underway.
But after a serious dive on the business’s fiscal claims as well as SEC filings, an image emerges of company control operating with a “toxic lender” to direct severely discounted shares to the lender regularly. An investment in Cytodyn is actually a strictly speculative bet on my part, and when the expected upward price movement doesn’t occur following results of the company’s period 2b/3 trial for severe-to-critical COVID 19, I am going to exit the investment.
In case the company’s drug does actually reliably conserve lifestyles in danger of severe-to-critical COVID19 patients, subsequently a groundswell of investor support can push the company into new, higher grade relationships, which would enable for the redemption of elimination as well as debentures of reliance on fly-by-night financings for example those described below.
Cytodyn’s sole focus is developing therapies based on a monoclonal antibody known as “leronlimab”, technically referred to as “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor sort five (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 cost of acquisition amounts to $10 million and a five % net royalty on commercial sales.
The drug was acquired on the early promise of its as an HIV therapy, for which continued development as well as research by Cytodyn has demonstrated the ability to reduce daily drug cocktails with myriad pills right into a specific monthly injection, sometimes, with 0 unintended effects. To particular date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific staff has realized the antibody’s effect on the CCR5 receptor has incredibly positive therapeutic implications for everything out of some solid tumours to NASH (Non-alcoholic steatohepatitis), the liver function condition that afflicts up to 12 percent of the US public, and up to 26 % globally.
But the real emergent also potentially transformational application for leronlimab, as stated at the beginning, (which is already getting branded as Vyrologix by Cytodyn), is designed for the Acute Respiratory Distress Syndrome (ARDS) caused by COVID 19 which precludes the Sequential Organ Failure wearing fatal situations of COVID infections.
Leronlimab apparently prevents the CCR5 receptor from over responding to the virus and launching the today household-word “cytokine storm”. Some proportion of patients obviously return from the brink after 2 treatments (and in some instances, 1 treatment) of leronlimab, even when intubated.
The company finished enrollment of a stage 2b/3 trial on December 15 to “evaluate the efficacy as well as safety of leronlimab for individuals with severe-to-critical COVID-19 indications is actually a two arm, randomized, double blind, placebo controlled, adaptive design and style multicenter study,” based on the company’s press release.
This trial period concluded on January 12-ish, and if the outcomes are good, this will make leronlimab a high therapy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Although the vaccines that are presently spreading are certainly lending optimism for a normalization of modern society by mid-2021, the surging global rates of contamination suggest the immediate future is right now overwhelming health care systems across the world as a lot more people call for ability to access Intensive Care Unit hospitalization.
During my 1st job interview with Dr. Nader Pourhassan back contained March of 2020, his serious eagerness for the prospects of this drug’s effectiveness was apparent.
It was prior to the now raging next trend had gathered vapor, and also he was then seeing patients which were receiving leronlimab under the FDA’s Emergency Investigative New Drug exemption.
At the time, though, this small independent biotech without major 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, and the deck was stacked from it.
Full Disclosure: I own 10,000 shares from an average cost of $6.23
Even though the planet focuses breathlessly on the hope for a brand new vaccine to regain the community liberties of theirs, the 10-ish portion of COVID infectees that descend into the cytokine storm-driven ARDS literally have their lives saved by this apparently versatile drug. For them, a vaccine is literally pointless.
This particular drug has “blockbuster potential” written all over it.
With 394 patients enrolled inside the Phase 2b/3 trial as of December sixteen, along with initially information expected this week, any demonstrable consistency in the data is going to capture the world’s interest in pretty much the most profound way. Quick 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 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, according to its CEO.
really if leronlimab/PRO 140/Vyrologix is so great, why the stock’s been trapped in sub-1dolar1 5 penny stock purgatory for so very long?
The quick solution is “OTC”.
Apart from dealing with a share price under $3, the company hasn’t been equipped to meet and maintain some other quantitative prerequisites, including good shareholders’ equity of at least five dolars million.
But in the NASDAQ world, you can find non quantifiable behaviours by organizations that create waiting times to NASDAQ listings. Overtly promotional communications are among such type of criteria that will never cause a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn has also not been in a position to access capital under conventional ways, because of its being listed on the OTC, along with consequently un-attractive on that foundation alone to white colored shoe firms.
So, they’ve been cut down to accepting shareholder-hostile OID debentures with ugly conversion terms that generate a short-seller’s wet dream.
In November, they borrowed 28.5 million out of Streeterville Capital of which only $25 million was paid to the company; $3.4 million will be the discount the Streeterville pockets, and $100k is reserved to cover the bills. Streeterville is linked with Illiad Research and Trading, which is managed by John Fife of Chicago Ventures Inc. Iliad has been called a “legendary so called toxic lender”, by rival research firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the offer, Cytodyn needs to pay back again $7.5 million each month. In case they do not possess the cash, they spend within stock; most recently, at a sales cost of $3.40 a share.
These days just think about if you are an opportunistic low rent lender and you have received a guaranteed 2.2 million shares coming the way of yours in the very first week of every month. Any cost above the conversion cost is pure profit. Remember – this guy is not an investor; he is a lender.
He is not operating on the hope that Cytodyn stock may go parabolic if leronlimab is deemed a cure for ARDS; his online business model is limiting risk and optimize upside via affordable transformation of share.
This’s the short seller’s wet dream I am discussing. Not merely is the lender enticed to go short, but some short trading bucket repair shop in town who can fog a mirror and examine an EDGAR filing understand that every month, like clockwork, there is going to be 2 million+ shares impacting the bid down to $3.40.
The SEC is not impressed, and on September three, 2020, filed a complaint.
The Securities in addition to the Exchange Commission these days filed charges from John M. Fife of Companies and Chicago he controls for acquiring as well as promoting more than twenty one billion shares of penny inventory without the need of registering as a securities dealer using the SEC.
The SEC’s complaint, alleges that in between 2015 and 2020, Fife, and the businesses of his, 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 business of buying sports convertible notes at penny stock issuers, converting the notes into shares of stock at a large discount from the market price, and selling the newly issued shares into the marketplace at a sizable profit. The SEC alleges which Fife as well as the businesses of his interested in around 250 sports convertible transactions with about 135 issuers, sold more than 21 billion newly issued penny stock shares into the industry, and obtained greater than sixty one dolars million in profits.
Streeterville Capital is not mentioned as an entity in the complaint. Which suggests that it was very likely used by Fife and Cytodyn to stay away from detection by the SEC this very same plan was being perpetrated on Cytodyn at 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 offering stock privately from ridiculously minimal prices, to the point in which one wonders just that exactly are the blessed winners of what requires no cost millions of dollars?
Moreover, beginning inside the month of November 2020 and also for every one of the following five (five) calendar days thereafter, the Company is obliged to reduce the outstanding sense of balance of the Note by $7,500,000 per 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 are not be subject to the fifteen % prepayment premium.
Also detracting from the business’s shine is actually the propensity of management for endlessly promotional communications with shareholders. During an investor webcast on January 5th, the company played a number of audio testimonials from patients making use of PRO 140 for HIV treatment, backed by tear-jerking music, and then replete with emotional language devoid of data.
Even worse, the company’s mobile phone number at the bottom of press releases comes with 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 system.
That’s the sort of approach that the SEC and FDA view unfavourably, and is likely at the very least in part the reason for their continued underdog status at both agencies.
The company has additionally become unresponsive to requests for interview, and thus with the story coming out under only these ill-advised publicity stunts, shorts are attracted, and big money investors, alienated.
But think of this particular “management discount” as the opportunity to acquire a sizable position (should someone be so inclined) found what might very well turn out to be, in a question of weeks, given that the top therapy for serious COVID19 related illness.
I expect the data from the trial now concluded for only such a sign might release the business into a whole new valuation altitude that will allow it to overpower these shortfalls.
Average trading volume is actually steady above 6 million shares a day, and right before the tail end of this week, we will find out just how effective leronlimab/PRO 140/Vyrologix is for saving lives from the worst of COVID nineteen. If the outcomes are good, this could be a huge winner.
Cytodyn Inc (OTCMKTS:CYDY)