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 members from our 1st feature back in April this season. Billions have been invested straight into hundreds of biotechs all competing to produce a cure or perhaps treatment for severe COVID-19 instances which cause death, as well as none have succeeded. Except for Cytodyn, when early indications are verified in the current trial now underway.
But after a serious jump on the company’s monetary statements and SEC filings, a picture emerges of business control working with a “toxic lender” to funnel severely 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 does not manifest after results of the company’s phase 2b/3 trial for severe-to-critical COVID-19, I will exit the investment.
If the business’s drug does in fact reliably conserve lifestyles to come down with severe-to-critical COVID19 patients, then a groundswell of investor assistance may drive the business into new, higher grade human relationships, which would allow for the redemption of debentures as well as elimination of reliance on fly-by-night financings for example those discussed below.
Cytodyn’s sole focus is actually developing treatments used on a monoclonal antibody called “leronlimab”, technically referred to as “humanized IgG4, monoclonal antibody (mAb) to the C-C chemokine receptor type five (CCR5)”. This engineered antibody was purchased 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 plus a five % 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 highlighted the ability to reduce regular drug cocktails with assortment pills right into an individual monthly injection, sometimes, with zero side effects. To day, the FDA has denied Cytodyn’s Biologics License Application (BLA)
Since that time, Cytodyn’s scientific team has discovered the antibody’s impact on the CCR5 receptor has incredibly positive therapeutic implications for everything out of certain stable tumours to NASH (Non-alcoholic steatohepatitis), the liver feature ailment that afflicts up to 12 percent of the US public, and up to 26 % globally.
But the real emergent also potentially transformational program for leronlimab, as I have said at the start, (which is currently being branded as Vyrologix by Cytodyn), is for the Acute Respiratory Distress Syndrome (ARDS) due to COVID 19 which precludes the Sequential Organ Failure in fatal situations of COVID infections.
Leronlimab evidently 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 instances, 1 treatment) of leronlimab, still if 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, placebo controlled, double blind, randomized, adaptive design 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)
While the vaccines that are now diffusing are certainly lending optimism for a normalization of modern culture by mid-2021, the surging global rates of illness mean the immediate future is today overwhelming health care systems across the world as increasingly more individuals require ability to access Intensive Care Unit hospitalization.
During my 1st job interview with Dr. Nader Pourhassan back found March of 2020, his serious interest for the prospects of the drug’s success was evident.
It was prior to the now raging second trend had gathered steam, and also he was then noticing individuals who were getting leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
Within the time, though, this small independent biotech with no big funding along with a decidedly unhappy public listing on the naked short-sellers’ dream OTC marketplace was getting ready to put on for a listing on NASDAQ, as well as the deck was stacked from it.
Full Disclosure: I own 10,000 shares from an average price of $6.23
While the planet focuses breathlessly on the optimism for the latest vaccine to restore 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 flexible drug. For them, a vaccine is pretty much useless.
This drug has “blockbuster potential” written all over it.
With 394 clients enrolled with the Phase 2b/3 trial as of December 16, along with first data expected this week, a demonstrable consistency in the details is going to record the world’s attention in the most profound way. Quick sellers may be swept apart (at least temporarily) simply because business’s brand new share priced levels qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses all set for sale now, with an additional 2.5 huge number of ordered for each of 2021 plus 2022 in a manufacturing understanding with Samsung, based on its CEO.
really if leronlimab/PRO 140/Vyrologix is so great, how come the stock’s been stuck in sub-1dolar1 five penny stock purgatory for such a long time?
The quick remedy is “OTC”.
Apart from faced with a share price under $3, the company hasn’t been in a position to meet and keep some different quantitative prerequisites, like positive shareholders’ equity that is at least $5 million.
But in the NASDAQ community, there are non quantifiable behaviours by businesses that cause waiting times to NASDAQ listings. Overtly advertising communications are among such criteria which will never cause a refusal letter…nor a NASDAQ listing.
More importantly, Cytodyn in addition has not been equipped to access capital under standard ways, thanks to its being listed on the OTC, along with consequently un attractive on that foundation alone to white shoe firms.
And so, they’ve been lowered to accepting shareholder-hostile OID debentures with unsightly conversion terms that create a short-seller’s wet dream.
In November, they took 28.5 zillion out of Streeterville Capital of that just twenty five dolars million was given to the company; $3.4 zillion is the discount the Streeterville sections, and $100k is actually set aside to protect the expenditures. Streeterville is actually linked with Illiad Research and Trading, that is controlled by John Fife of Chicago Ventures Inc. Iliad has been termed as a “legendary so-called toxic lender”, by rival research tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the deal, Cytodyn wants to pay again $7.5 million each month. If they don’t possess the cash, they pay in stock; most recently, within a conversion price of $3.40 a share.
Now just think about when you are an opportunistic low-rent lender and you’ve received a guaranteed 2.2 million shares coming your way in the first week of each month. Any cost above the conversion expenditure is pure profit. Remember – this guy isn’t an investor; he is a lender.
He’s not operating on the expectation that Cytodyn stock could go parabolic in the event that leronlimab is deemed a remedy for ARDS; his online business model is limiting risk and maximize upside through affordable conversion of share.
This is the short seller’s wet dream I’m speaking about. Not merely is definitely the lender enticed to go brief, but any short-trading pail dealer in town who could fog a mirror and read an EDGAR filing understand that every month, like clockwork, there’s going to be 2 million+ shares hitting the bid down to $3.40.
The SEC is not impressed, additionally, on September 3, 2020, filed a complaint.
The Securities and Exchange Commission today filed charges against John M. Fife of Chicago and Companies he controls for obtaining and marketing much more than twenty one billion shares of penny stock without registering as a securities dealer with the SEC.
The SEC’s complaint, alleges this between 2015 and 2020, Fife, and his businesses, Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., as well as Typenex Co-Investment, LLC, frequently engaged in the company of buying convertible notes from 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 significant profit. The SEC alleges which Fife as well as the businesses of his engaged in more than 250 convertible transactions with about 135 issuers, sold greater than 21 billion newly-issued penny stock shares to the market, and obtained more than sixty one dolars million in profits.
Streeterville Capital isn’t mentioned as an entity of the complaint. Which suggests it was very likely utilized by Cytodyn as well as Fife to avoid detection by the SEC that this same scheme was getting perpetrated on Cytodyn at the time of its complaint.
But that is not the sole reason the stock can’t maintain some upward momentum.
The company has been offering inventory privately at ridiculously minimal prices, to the stage where by one wonders just who exactly are the fortunate winners of what amounts to no cost millions of dollars?
Additionally, starting within the month of November 2020 and also for each of the following 5 (5) calendar months thereafter, the Company is actually required to bring down the outstanding harmony belonging to the Note by $7,500,000 per month (the “Debt Reduction Amount”). Payments the Company makes under the Prior Notes will be acknowledged toward the transaction of each month Debt Reduction Amount. The Debt Reduction Amount payments are not be subject to the fifteen % prepayment premium.
Likewise detracting from the company’s gloss is the propensity of handling for excessively marketing communications with shareholders. During an investor webcast on January 5th, the business played a number of sound testimonials from patients making use of PRO 140 for HIV treatment, backed by tear jerking music, and replete with mental language devoid of information.
Even worse, the company’s cell 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 particular is actually a “valid extension” based on the automatic phone system.
That’s the approach type that the FDA and SEC view unfavourably, and 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 interview, and thus while using story coming out less than only these ill advised publicity stunts, shorts are actually attracted, and huge cash investors, alienated.
But think of this “management discount” as the ability to acquire a sizable role (should someone be so inclined) contained what could really well turn out to be, in a matter of weeks, since the best therapy for serious COVID19 associated illness.
I expect the data in the trial now concluded for only such an indication might release the organization into a whole new valuation altitude that will permit it to get over these shortfalls.
Average trading volume is actually steady above 6 million shares one day, and right before the conclusion of this week, we will know precisely how effective leronlimab/PRO 140/Vyrologix is actually at saving lives from the most severe of COVID 19. If the results are good, this could be a big winner.
Cytodyn Inc (OTCMKTS:CYDY)