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 first feature back in April this season. Billions have been invested straight into countless biotechs all competing to produce a medicine or perhaps therapy for severe COVID 19 instances that trigger death, and none have been successful. Except for Cytodyn, if early indications are confirmed in the present trial now underway.
But after a deep jump on the business’s fiscal statements and SEC filings, a picture emerges of business control working having 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 appear after results of the company’s period 2b/3 trial for severe-to-critical COVID-19, I will exit the investment.
In case the company’s drug does in fact reliably save life in severe-to-critical COVID19 patients, subsequently a groundswell of investor assistance could drive the business into new, higher-grade relationships, which would permit for the redemption of debentures and elimination of reliance on fly-by-night financings such as those described below.
Cytodyn’s sole focus is actually creating treatments based on a monoclonal antibody called “leronlimab”, technically called “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor sort five (CCR5)”. This engineered antibody was acquired 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 ten dolars million and a five % net royalty on business sales.
The drug was acquired on its first promise as an HIV therapy, for which continued research and development by Cytodyn has demonstrated the ability to reduce regular drug cocktails with myriad pills right into a specific 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 staff has discovered the antibody’s influence on the CCR5 receptor has incredibly positive therapeutic implications for everything from certain solid tumours to NASH (Non alcoholic steatohepatitis), the liver function condition which afflicts up to 12 % of the US public, 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 now getting branded as Vyrologix by Cytodyn), is made for the Acute Respiratory Distress Syndrome (ARDS) caused by COVID 19 that precludes the Sequential Organ Failure wearing fatal cases of COVID infections.
Leronlimab evidently blocks the CCR5 receptor from over-responding to the virus and launching the today household-word “cytokine storm”. Some proportion of patients apparently return from the brink following 2 treatments (and in some instances, 1 treatment) of leronlimab, even when intubated.
The company completed enrollment of a phase 2b/3 trial on December 15 to “evaluate the efficacy and safety of leronlimab for individuals with severe-to-critical COVID 19 indications is actually a two-arm, placebo controlled, double blind, randomized, adaptive design and style multicenter study,” according to the company’s media release.
This trial period concluded on January 12 ish, and if the outcomes are good, this will make leronlimab a top treatment for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines that are now diffusing are certainly lending hope for a normalization of modern society by mid-2021, the surging global rates of illness suggest the immediate future is right now overwhelming health care systems throughout the world as more and more men and women call for utilization of Intensive Care Unit hospitalization.
During my first interview with Dr. Nader Pourhassan back in March of 2020, his serious passion for the prospects of the drug’s effectiveness was evident.
This was prior to the now raging second trend had gathered heavy steam, and he was then discovering individuals that were getting leronlimab under the FDA’s Emergency Investigative New Drug exemption.
Within the time, although, this small independent biotech without any significant funding along with a decidedly unhappy public listing on the naked short-sellers’ dream OTC marketplace was getting able to put on for a listing on NASDAQ, along with the deck was stacked from it.
Full Disclosure: I own 10,000 shares at an average price of $6.23
Even though the planet concentrates breathlessly on the hope for a brand new vaccine to restore the community liberties of theirs, the 10 ish percentage of COVID infectees who descend into the cytokine storm driven ARDS literally have their day saved by this apparently versatile drug. For these people, a vaccine is literally useless.
This particular drug has “blockbuster potential” written all over it.
With 394 people enrolled in the Phase 2b/3 trial as of December 16, and first data expected this week, any demonstrable consistency in the details is going to record the world’s focus in pretty much the most profound way. Short sellers could be swept apart (at minimum temporarily) while the business’s brand new share price amounts qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses prepared for sale now, with an extra 2.5 zillion purchased for each of 2021 as well as 2022 in a manufacturing agreement with Samsung, as per the CEO of its.
so if leronlimab/PRO 140/Vyrologix is so great, how come the stock’s been trapped in sub-1dolar1 5 penny stock purgatory for so long?
The quick solution is “OTC”.
Apart from struggling with a share price under three dolars, the company hasn’t been in a position to meet and maintain certain other quantitative prerequisites, like good shareholders’ equity with a minimum of $5 million.
But in the NASDAQ world, you can find non quantifiable behaviours by companies that cause waiting times to NASDAQ listings. Overtly advertising communications are among these kinds of criteria which won’t ever cause a refusal letter…nor a NASDAQ listing.
More to the point, Cytodyn has additionally not been equipped to access capital under conventional means, thanks to its being listed on the OTC, in addition to therefore 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 produce a short-seller’s damp dream.
In November, they took 28.5 huge number of from Streeterville Capital of which only twenty five dolars million was paid to the company; $3.4 zillion is the discount the Streeterville sections, and $100k is actually reserved to protect the expenses. Streeterville is linked with Illiad Research and Trading, that is managed by John Fife of Chicago Ventures Inc. Iliad has been referred to as a “legendary so-called toxic lender”, by rival studies firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the phrases of the offer, Cytodyn has to pay back again $7.5 million every month. If they do not have the cash, they pay inside stock; most lately, within a sales cost of $3.40 a share.
Now consider when you’re an opportunistic low-rent lender and you’ve received an assured 2.2 million shares coming your way in the first week of every month. Any price above the sales price is pure profit. Remember – this guy is not an investor; he’s a lender.
He’s not operating on the hope 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’s the quick seller’s wet dream I am talking about. Not only is definitely the lender enticed to go brief, but some short-trading container shop in town who can fog a mirror and go through an EDGAR filing know that each month, like clockwork, there is going to be two million+ shares striking the bid lowered by to $3.40.
The SEC isn’t impressed, additionally, on September 3, 2020, filed a criticism.
The Securities and Exchange Commission today filed charges from John M. Fife of Chicago and Companies he controls for obtaining and marketing more than twenty one billion shares of penny stock without the need of registering to be 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 as well as Trading, L.P., St. George Investments LLC, Tonaquint, Inc., in addition to the Typenex Co-Investment, LLC, routinely interested in the company of purchasing sports convertible paperwork from penny stock issuers, converting those notes into shares of inventory at a large discount from the market price, and selling the newly issued shares to the market at a substantial profit. The SEC alleges that Fife as well as the companies of his engaged in more than 250 sports convertible transactions with approximately 135 issuers, sold greater than twenty one billion newly issued penny stock shares to the industry, and obtained more than sixty one dolars million in profits.
Streeterville Capital isn’t mentioned as an entity in the complaint. Which implies that it was very likely applied by Cytodyn and Fife to avoid detection by the SEC this same plan was getting perpetrated on Cytodyn within the time of its complaint.
But that is not the only reason the stock cannot keep any upward momentum.
The company has been offering inventory privately from ridiculously low prices, to the stage in which one wonders just who exactly are the fortunate winners of what requires free millions of dollars?
Moreover, beginning in the month of November 2020 as well as for each of the next 5 (5) calendar months thereafter, the Company is obliged to reduce the exceptional sense of balance belonging to the Note by $7,500,000 a month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes will be credited toward the transaction of each monthly Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the fifteen % prepayment premium.
Additionally detracting from the company’s shine is actually the propensity of management for excessively marketing communications with shareholders. During an investor webcast on January 5th, the company had a compilation of sound testimonials from clients making use of PRO 140 for HIV treatment, backed by tear-jerking music, and then replete with emotional language devoid of information.
Even worse, the company’s phone number at the bottom of press releases has 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 is the type of approach that the FDA and SEC view unfavourably, and is likely at minimum in part the reason behind the continued underdog status of theirs at both agencies.
The company also has become unresponsive to requests for interview, and so while using story coming out under merely these ill advised publicity stunts, shorts are actually attracted, and huge money investors, alienated.
But think of this particular “management discount” as the ability to get a sizable role (should a person be so inclined) in what might really well turn out to be, in a situation of weeks, since the best therapy for serious COVID19 related illness.
I expect the information in the trial now concluded for only such an indication may launch the business into a complete new valuation altitude that will permit it to overpower these shortfalls.
Average trading volume is constant above six million shares a day, and before the end of this week, we’ll find out just how effective leronlimab/PRO 140/Vyrologix is actually for saving lives from the most severe of COVID nineteen. If the results are good, this could be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)