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 1st feature back in April this season. Billions have been invested straight into a huge selection of biotechs all competing to create a cure or perhaps treatment for severe COVID-19 situations that result in death, and also none have succeeded. Except for Cytodyn, when early indications are established in the present trial now underway.
But right after a deep jump on the business’s monetary statements as well as SEC filings, an image emerges of business management operating having a “toxic lender” to direct severely discounted shares to the lender regularly. An investment in Cytodyn is actually a purely speculative bet on the part of mine, and when the anticipated upward price movement does not appear following results in the company’s period 2b/3 trial for severe-to-critical COVID 19, I am going to exit the investment.
If the company’s drug does actually reliably conserve lives in danger of severe-to-critical COVID19 patients, subsequently a groundswell of investor assistance could force the company into new, higher-grade relationships, which would permit for the redemption of elimination and debentures of reliance on fly-by-night financings like those discussed below.
Cytodyn’s sole focus is actually developing remedies used on a monoclonal antibody called “leronlimab”, technically described as “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor type 5 (CCR5)”. This engineered antibody was obtained 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 5 % net royalty on commercial sales.
The drug was acquired on the first promise of its as an HIV treatment, for which continued development and research by Cytodyn has shown the potential to reduce daily drug cocktails with assortment pills right into a single monthly injection, in some cases, with 0 unintended effects. To particular date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific team has realized the antibody’s effect on the CCR5 receptor has extremely optimistic therapeutic implications for everything from some stable tumours to NASH (Non alcoholic steatohepatitis), the liver feature ailment that afflicts up to 12 % of the US population, and up to twenty six % globally.
But the real emergent and potentially transformational program for leronlimab, as stated at the beginning, (which is now being branded as Vyrologix by Cytodyn), is made for the Acute Respiratory Distress Syndrome (ARDS) caused by COVID-19 which precludes the Sequential Organ Failure in fatal instances of COVID infections.
Leronlimab apparently blocks 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 after 2 treatments (and in some cases, one treatment) of leronlimab, even if intubated.
The company completed enrollment of a level 2b/3 trial on December fifteen to “evaluate the efficacy and safety of leronlimab for individuals with severe-to-critical COVID 19 indications is 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, of course, if the outcomes are positive, this can make leronlimab a high remedy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines that are now circulating are definitely lending optimism for a normalization of society by mid-2021, the surging worldwide rates of infection mean the immediate future is right now overwhelming health care systems throughout the world as increasingly more individuals require utilization of Intensive Care Unit hospitalization.
During the 1st job interview of mine with Dr. Nader Pourhassan returned found March of 2020, the serious interest of his for the prospects of this drug’s efficacy was evident.
It was prior to the now raging second wave had gathered steam, and also he was then discovering patients which were receiving leronlimab under the FDA’s Emergency Investigative New Drug exemption.
At the time, even thought, this little independent biotech with no big funding and a decidedly unfortunate public listing on the naked short-sellers’ dream 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 world focuses breathlessly on the hope for the latest vaccine to regain the social liberties of theirs, the 10 ish percentage of COVID infectees that descend into the cytokine storm driven ARDS actually have their day saved by this seemingly flexible drug. For these people, a vaccine is pretty much useless.
This particular drug has “blockbuster potential” written all over it.
With 394 individuals enrolled in the Phase 2b/3 trial as of December 16, in addition to initially information expected this week, a demonstrable consistency in the details is going to capture the world’s focus in probably the most profound way. Short sellers might be swept aside (at the very least temporarily) as the business’s new share priced levels qualify it for NASDAQ listing.
Cytodyn management says it’s 700,000 doses all set for sale now, with an extra 2.5 million purchased for each of 2021 plus 2022 in a manufacturing agreement with Samsung, as per the CEO of its.
really if leronlimab/PRO 140/Vyrologix is very great, why the stock’s been stuck in sub 1dolar1 five penny stock purgatory for such a long time?
The speedy answer is “OTC”.
Besides dealing with a share price under $3, the company has not been in a position to meet and maintain certain other quantitative prerequisites, including good shareholders’ equity with a minimum of five dolars million.
But in the NASDAQ world, you can find non quantifiable behaviours by businesses that can cause slow downs to NASDAQ listings. Overtly advertising communications are actually among such criteria which will never cause a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn has additionally not been able to access capital under standard ways, thanks to its being listed on the OTC, in addition to consequently un attractive on that foundation alone to white colored shoe firms.
So, they’ve been reduced to accepting shareholder hostile OID debentures with unsightly sales terms that produce a short-seller’s stormy dream.
In November, they coppied 28.5 zillion coming from Streeterville Capital of which just $25 million was paid to the company; $3.4 zillion will be the discount the Streeterville areas, and $100k is put aside to protect the costs. Streeterville is actually linked with Illiad Trading and Research, which is controlled by John Fife of Chicago Ventures Inc. Iliad has been called a “legendary so-called toxic lender”, by rival studies firm Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the price, Cytodyn needs to pay back again $7.5 million every month. In case they do not possess the cash, they pay in stock; the majority of recently, at a conversion cost of $3.40 a share.
These days consider when you are an opportunistic low-rent lender and you’ve received a guaranteed 2.2 million shares coming the way of yours in the first week of each month. Any price tag above the sales expenditure is pure profit. Remember – this guy is not an investor; he’s a lender.
He is not operating on the expectation that Cytodyn stock may go parabolic in the event that leronlimab is deemed a remedy for ARDS; the online business model of his is limiting risk and maximize upside via affordable transformation of share.
This is the short seller’s wet dream I’m discussing. Not only is definitely the lender enticed to go brief, but any short trading bucket repair 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 hitting the bid down to $3.40.
The SEC is not impressed, in addition, on September 3, 2020, filed a criticism.
The Securities as well as Exchange Commission these days filed charges from John M. Fife of Chicago and Companies he controls for acquiring as well as promoting more than 21 billion shares of penny inventory without the need of registering to be a securities dealer while 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 and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., in addition to the Typenex Co Investment, LLC, regularly engaged in the small business of buying sports convertible paperwork at penny stock issuers, transforming the notes into shares of stock at a large discount from the market price, and selling the freshly issued shares to the marketplace at a sizable profit. The SEC alleges that Fife as well as the businesses of his interested in around 250 convertible transactions with roughly 135 issuers, sold greater than twenty one billion newly issued penny stock shares to the industry, and obtained greater than $61 million in earnings.
Streeterville Capital isn’t mentioned as an entity in the complaint. Which hints that it was likely applied by Cytodyn as well as Fife to avoid detection by the SEC this same plan was being perpetrated on Cytodyn at the time of its complaint.
But that’s not the sole reason the stock cannot maintain some upward momentum.
The company has been offering inventory privately at ridiculously low prices, to the point in which one wonders just who exactly are the blessed winners of what amounts to free millions of dollars?
Additionally, beginning inside the month of November 2020 and also for each of the next 5 (5) calendar months thereafter, the Company is actually obligated to lower the outstanding 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 are going to be credited toward the transaction of each month Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the fifteen % prepayment premium.
Additionally detracting from the company’s gloss is the propensity of handling for endlessly marketing communications with shareholders. During an investor webcast on January 5th, the company played a compilation of audio testimonials from individuals applying PRO 140 for HIV therapy, backed by tear jerking music, and replete with emotional language devoid of data.
Even worse, the company’s telephone number at the bottom part of press releases has an extension for Nader Pourhassan, the CFO, and Mike Mulholland, the CEO, but neither one is a “valid extension” in accordance with the automated system.
That’s the approach type that the SEC and FDA view unfavourably, and it is likely at least in part the reason behind their continued underdog status at both agencies.
The company has also turned out to be unresponsive to requests for interviews, and so while using story coming out under merely these ill-advised publicity stunts, shorts are actually attracted, and big cash investors, alienated.
But think of this “management discount” as the chance to get a sizable job (should one be so inclined) contained what could very well prove to be, in a question of weeks, given that the top therapy for serious COVID19 related illness.
I expect the details in the trial now concluded for just such a sign could launch the organization into a whole new valuation altitude that will enable it to get over these shortfalls.
Average trading volume is steady above 6 million shares 1 day, and before the conclusion of this week, we’ll learn precisely how efficient leronlimab/PRO 140/Vyrologix is for saving lives from the worst of COVID 19. If the outcomes are good, this can be a huge winner.
Cytodyn Inc (OTCMKTS:CYDY)