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 subscribers from our 1st feature returned in April this year. Billions have been invested straight into hundreds of biotechs all competing to develop a medicine or maybe therapy for severe COVID-19 instances which trigger death, and also none have been successful. Except Cytodyn, when early indications are confirmed in the current trial now underway.
But after a deep dive on the company’s monetary claims as well as SEC filings, a picture emerges of company control operating having a “toxic lender” to direct seriously discounted shares to the lender frequently. An investment in Cytodyn is actually a strictly speculative bet on my part, and when the expected upward price movement doesn’t appear following results of the company’s phase 2b/3 trial for severe-to-critical COVID-19, I am going to exit the investment.
In case the business’s drug does actually reliably conserve lifestyles in severe-to-critical COVID19 patients, subsequently a groundswell of investor support may force the company into completely new, higher-grade human relationships, which would permit for the redemption of elimination and debentures of reliance on fly-by-night financings such as those described below.
Cytodyn’s sole focus is developing therapies used on a monoclonal antibody known as “leronlimab”, technically referred to as “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor sort 5 (CCR5)”. This engineered antibody was acquired of Progenics Pharmaceuticals as “PRO 140”, a recently-acquired subsidiary of Lantheus Holdings Inc (NASDAQ:LNTH), again in 2012.
Total price of acquisition amounts to $10 million and a 5 % net royalty on commercial revenue.
The drug was acquired on its first promise as an HIV therapy, for which continued research as well as development by Cytodyn has highlighted the capability to reduce regular drug cocktails with myriad pills into a single monthly injection, sometimes, with zero side effects. To particular date, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since then, Cytodyn’s scientific staff has discovered the antibody’s effect on the CCR5 receptor has extremely positive therapeutic implications for everything out of some solid tumours to NASH (Non alcoholic steatohepatitis), the liver feature condition that afflicts up to twelve % of the US population, and up to 26 % globally.
But the real emergent also likely transformational application 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 which precludes the Sequential Organ Failure wearing fatal cases of COVID infections.
Leronlimab it seems that prevents the CCR5 receptor from over-responding to the virus and also launching the today household-word “cytokine storm”. Some proportion of individuals obviously return from the brink following 2 treatments (and in some cases, 1 treatment) of leronlimab, still if intubated.
The company completed enrollment of a phase 2b/3 trial on December fifteen to “evaluate the efficacy as well as safety of leronlimab for individuals with severe-to-critical COVID-19 indications is a two arm, randomized, double blind, placebo controlled, adaptive design and style multicenter study,” based on the company’s press release.
This trial phase concluded on January 12-ish, of course, if the outcomes are positive, this will make leronlimab a top remedy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Even though the vaccines which are presently spreading are surely lending optimism for a normalization of society by mid 2021, the surging global rates of contamination mean the immediate future is right now overwhelming health care systems throughout the world as a lot more men and women call for ability to access Intensive Care Unit hospitalization.
During the first job interview of mine with Dr. Nader Pourhassan returned found March of 2020, his serious eagerness for the prospects of this drug’s success was apparent.
It was before the currently raging next trend had gathered steam, and he was then noticing patients that were getting leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
Within the time, nonetheless,, this small independent biotech without any significant funding along with a decidedly unhappy public listing on the naked short-sellers’ fantasy OTC marketplace was getting prepared to utilize for a listing on NASDAQ, and the deck was stacked from it.
Full Disclosure: I have 10,000 shares from an average cost of $6.23
Although the planet concentrates breathlessly on the hope for a brand new vaccine to restore the community liberties of theirs, the 10-ish portion of COVID infectees who descend into the cytokine storm driven ARDS literally have their day saved by this apparently flexible drug. For these people, a vaccine is literally useless.
This drug has “blockbuster potential” written all over it.
With 394 people enrolled with the Phase 2b/3 trial as of December sixteen, in addition to initially data expected this week, any demonstrable consistency in the data is going to capture the world’s attention in likely the most profound way. Quick sellers might be swept apart (at the very least temporarily) as the company’s new share priced levels qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses all set for sale right now, with an additional 2.5 million purchased for each of 2021 and 2022 in a manufacturing agreement with Samsung, according to the CEO of its.
really if leronlimab/PRO 140/Vyrologix is very great, why the stock’s been trapped in sub-1dolar1 5 penny stock purgatory for so long?
The quick remedy is “OTC”.
Besides dealing with a share price under three dolars, the company hasn’t been equipped to meet and keep certain other quantitative prerequisites, including positive shareholders’ equity that is at least $5 million.
But in the NASDAQ community, you can find non quantifiable behaviours by businesses that cause waiting times to NASDAQ listings. Overtly advertising communications are among such type of criteria which won’t ever lead to a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn in addition has not been equipped to access capital under standard means, thanks to its being listed on the OTC, in addition to therefore un attractive on that foundation alone to white shoe firms.
So, they have been cut down to accepting shareholder-hostile OID debentures with ugly conversion terms that produce a short-seller’s stormy dream.
In November, they took 28.5 huge number of out of Streeterville Capital of which just twenty five dolars million was paid to the company; $3.4 million will be the discount the Streeterville sections, and $100k is actually reserved to cover the costs. Streeterville is actually associated with Illiad Research and Trading, that is operated by John Fife of Chicago Ventures Inc. Iliad has been called a “legendary so-called poisonous lender”, by rival research tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the deal, Cytodyn must pay back $7.5 million per month. If they do not have the cash, they pay within stock; the majority of recently, within a conversion price of $3.40 a share.
Now just think about if you’re an opportunistic low-rent lender and you’ve got a certain 2.2 million shares coming your way in the earliest week of every month. Any cost above the conversion cost is pure profit. Remember – this guy isn’t an investor; he is a lender.
He is not operating on the expectation that Cytodyn stock might go parabolic if leronlimab is deemed a remedy for ARDS; his online business model is limiting risk and optimize upside through affordable conversion of share.
This is the quick seller’s wet dream I am discussing. Not only is definitely the lender enticed to go brief, but some short trading container dealer in town who are able to fog a mirror and read an EDGAR filing understand that every month, like clockwork, there’s going to be two million+ shares striking the bid down to $3.40.
The SEC isn’t impressed, and on September 3, 2020, filed a criticism.
The Securities as well as Exchange Commission nowadays filed charges from John M. Fife of Chicago and Companies he controls for obtaining and promoting much more than 21 billion shares of penny inventory without 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., and Typenex Co Investment, LLC, regularly involved in the company of purchasing convertible paperwork from penny stock issuers, transforming these notes into shares of stock at a big discount from the market price, and offering the newly issued shares to the marketplace at a sizable profit. The SEC alleges which Fife as well as the businesses of his interested in over 250 convertible transactions with approximately 135 issuers, sold greater than twenty one billion newly-issued penny stock shares into the industry, and obtained greater than $61 million in profits.
Streeterville Capital isn’t mentioned as an entity of the complaint. Which hints that it was very likely used by Cytodyn and Fife to stay away from detection by the SEC that this same scheme was being perpetrated on Cytodyn within the time of its complaint.
But that’s not the sole reason the stock can’t maintain some upward momentum.
The company has been selling stock privately from ridiculously low prices, to the point in which one wonders just who exactly are the lucky winners of what requires free millions of dollars?
In addition, beginning inside the month of November 2020 and for each of the second five (five) calendar days thereafter, the Company is obliged to bring down the exceptional sense of balance with the Note by $7,500,000 a month (the “Debt Reduction Amount”). Payments the Company makes under the Prior Notes will be acknowledged to the transaction of each month Debt Reduction Amount. The Debt Reduction Amount payments aren’t be subject to the 15 % prepayment premium.
Likewise detracting from the company’s shine is the propensity of management for excessively promotional communications with shareholders. During an investor webcast on January 5th, the company had a number of audio testimonials from individuals using PRO 140 for HIV treatment, backed by tear-jerking music, and replete with emotional language devoid of data.
Worse, the company’s mobile phone number at the bottom part of press releases has an extension for Mike Mulholland, the CFO, and Nader Pourhassan, the CEO, but neither one is a “valid extension” based on the automatic system.
That’s the sort of approach that the FDA and SEC view unfavourably, and it is likely at least in part the reason for their continued underdog status at both agencies.
The company has additionally come to be unresponsive to requests for interviews, and so using the story coming out under just these ill-advised publicity stunts, shorts are actually attracted, and huge money investors, alienated.
But think of this “management discount” as the ability to buy a sizable job (should someone be so inclined) in what could very well prove to be, in a question of weeks, since the top treatment for serious COVID19 associated illness.
I expect the details from the trial now concluded for only such an indication could launch the business into a whole new valuation altitude that will allow it to overpower these shortfalls.
Average trading volume is steady above 6 million shares a day, and before the conclusion of this week, we will find out exactly how efficient leronlimab/PRO 140/Vyrologix is at saving lives from the worst of COVID nineteen. In case the results are good, this can be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)