Cytodyn (CYDY) Phase 2b/3 Trial Results Expected Any Day
Cytodyn Inc (OTCMKTS:CYDY), a late-stage biotech drug developer, has already delivered a win for Wealthpress subscribers from our first feature back in April this year. Billions have been invested directly into countless biotechs all competing to create a medicine or maybe therapy for severe COVID 19 situations that cause death, and none have been successful. Except Cytodyn, if early indications are established in the present trial now underway.
But right after a serious dive on the business’s financial claims and SEC filings, an image emerges of business control working having a “toxic lender” to funnel seriously discounted shares to the lender regularly. An investment in Cytodyn is actually a purely speculative bet on my part, and if 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 business’s drug does actually reliably spend less lives to come down with severe-to-critical COVID19 individuals, subsequently a groundswell of investor support could push the organization into completely 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 described below.
Cytodyn’s sole focus is actually creating therapies used on a monoclonal antibody called “leronlimab”, technically referred to as “humanized IgG4, monoclonal antibody (mAb) to the C C chemokine receptor type 5 (CCR5)”. This particular engineered antibody was obtained of Progenics Pharmaceuticals as “PRO 140”, a recently-acquired subsidiary of Lantheus Holdings Inc (NASDAQ:LNTH), back in 2012.
Total price of acquisition amounts to ten dolars million plus a 5 % net royalty on business sales.
The drug was acquired on its early promise as an HIV therapy, for which continued research as well as development by Cytodyn has demonstrated the capability to reduce daily drug cocktails with assortment pills right into a specific 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 staff has discovered the antibody’s effect on the CCR5 receptor has extremely positive therapeutic implications for everything out of certain stable tumours to NASH (Non-alcoholic steatohepatitis), the liver feature condition which afflicts up to twelve percent of the US population, and up to 26 % globally.
But the real emergent and potentially transformational program for leronlimab, as I have said at the start, (which is already being branded as Vyrologix by Cytodyn), is designed for the Acute Respiratory Distress Syndrome (ARDS) brought on by COVID-19 which precludes the Sequential Organ Failure in fatal cases of COVID infections.
Leronlimab evidently blocks the CCR5 receptor from over responding to the virus and also launching the today household-word “cytokine storm”. Some proportion of people apparently return from the brink following two treatments (and in some instances, one treatment) of leronlimab, even when intubated.
The company finished enrollment of a stage 2b/3 trial on December fifteen to “evaluate the efficacy and safety of leronlimab for clients with severe-to-critical COVID-19 indications is a two-arm, placebo controlled, double blind, randomized, adaptive design and style multicenter study,” according to the company’s media release.
This trial phase concluded on January 12-ish, of course, if the results are good, this can make leronlimab a high remedy for ARDS.
Cytodyn Inc (OTCMKTS:CYDY)
Although the vaccines that are currently circulating are surely lending optimism for a normalization of society by mid 2021, the surging global rates of illness suggest the immediate future is already overwhelming health care systems around the world as more and more individuals call for utilization of Intensive Care Unit hospitalization.
During the first job interview of mine with Dr. Nader Pourhassan back contained March of 2020, the serious enthusiasm of his for the prospects of this drug’s success was evident.
It was before the currently raging second wave had gathered steam, and also he was then discovering patients who were getting leronlimab underneath the FDA’s Emergency Investigative New Drug exemption.
At the time, even thought, this small independent biotech without any significant funding along with a decidedly unfortunate public listing on the naked short-sellers’ dream OTC marketplace was getting able to utilize for a listing on NASDAQ, along with the deck was stacked from it.
Full Disclosure: I posses 10,000 shares at an average cost of $6.23
Although the world concentrates breathlessly on the optimism for the latest vaccine to regain their community liberties, the 10 ish percentage of COVID infectees that descend into the cytokine storm driven ARDS literally have their lives saved by this seemingly flexible drug. To them, a vaccine is pretty much useless.
This drug has “blockbuster potential” written all over it.
With 394 patients enrolled inside the Phase 2b/3 trial as of December sixteen, and first data expected this week, a demonstrable consistency in the data is going to capture the world’s focus in pretty much the most profound way. Short sellers might be swept aside (at minimum temporarily) simply because company’s new share price levels qualify it for NASDAQ listing.
Cytodyn management says it has 700,000 doses prepared for sale now, with an additional 2.5 huge number of ordered for each of 2021 plus 2022 in a manufacturing arrangement with Samsung, according to its CEO.
so if leronlimab/PRO 140/Vyrologix is so great, how come the stock’s been trapped in sub-1dolar1 five penny stock purgatory for so long?
The fast answer is “OTC”.
Besides struggling with a share price under $3, the company hasn’t been in a position to meet and maintain some different quantitative requirements, like positive shareholders’ equity with a minimum of $5 million.
But in the NASDAQ world, one can find non-quantifiable behaviours by companies that cause waiting times to NASDAQ listings. Overtly promotional communications are actually among such type of criteria which won’t ever lead to a refusal letter…nor a NASDAQ listing.
More to the point, Cytodyn in addition has not been able to access capital under traditional means, because of its being listed on the OTC, and therefore un-attractive on that basis alone to white colored shoe firms.
And so, they have been lowered to accepting shareholder hostile OID debentures with unsightly conversion terms that generate a short-seller’s damp dream.
In November, they borrowed 28.5 zillion from Streeterville Capital of that only twenty five dolars million was given to the company; $3.4 huge number of will be the discount the Streeterville areas, and $100k is put aside to protect the bills. Streeterville is linked with Illiad Research and Trading, which is controlled by John Fife of Chicago Ventures Inc. Iliad has been referred to as a “legendary so-called poisonous lender”, by rival studies tight Utopia Capital Research.
Cytodyn Inc (OTCMKTS:CYDY)
Under the terms of the deal, Cytodyn needs to pay again $7.5 million every month. In case they don’t have the cash, they pay inside stock; the majority of lately, within a sales cost of $3.40 a share.
Now just imagine when you’re an opportunistic low rent lender and you have gained an assured 2.2 million shares coming your way in the very first week of every month. Any cost above the sales cost is pure profit. Remember – this guy isn’t an investor; he’s a lender.
He is not operating on the hope that Cytodyn stock may go parabolic in the event that leronlimab is deemed a cure for ARDS; the online business model of his is limiting risk and optimize upside via affordable transformation of share.
This’s the short seller’s wet dream I am speaking about. Not only would be the lender enticed to go short, but some short-trading container shop in town who are able to fog a mirror and go through an EDGAR filing realize that every month, like clockwork, there is going to be 2 million+ shares striking the bid down to $3.40.
The SEC is not impressed, additionally, on September three, 2020, filed a complaint.
The Securities and Exchange Commission these days filed charges against John M. Fife of Chicago and Companies he controls for obtaining and promoting more than twenty one billion shares of penny inventory without registering as a securities dealer with the SEC.
The SEC’s criticism, alleges that between 2015 as well as 2020, Fife, and also the companies of his, Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., as well as Typenex Co-Investment, LLC, routinely engaged in the business of buying convertible paperwork from penny stock issuers, transforming those notes into shares of inventory at a big discount from the market cost, and selling the freshly issued shares to the marketplace at a substantial profit. The SEC alleges which Fife as well as his companies interested in more than 250 convertible transactions with roughly 135 issuers, sold greater than 21 billion newly-issued penny stock shares into the market, and obtained greater than sixty one dolars million in earnings.
Streeterville Capital isn’t mentioned as an entity in the complaint. Which implies that it was probably applied by Cytodyn as well as Fife to stay away from detection by the SEC that this very same scheme was being perpetrated on Cytodyn within the time of the complaint of its.
But that is not the only reason the stock cannot preserve any upward momentum.
The company has been selling stock privately from ridiculously minimal prices, to the point where one wonders just who exactly are the blessed winners of what requires free millions of dollars?
Additionally, beginning in the month of November 2020 as well as for each of the second five (5) calendar days thereafter, the Company is obligated to cut down the excellent harmony of the Note by $7,500,000 a month (the “Debt Reduction Amount”). Payments the Company makes within the Prior Notes will likely be credited toward 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 business’s shine is actually the propensity of handling for endlessly marketing communications with shareholders. During an investor webcast on January 5th, the business played a compilation of sound testimonials from patients using PRO 140 for HIV treatment, backed by tear-jerking music, and then replete with emotional language devoid of data.
Worse, the company’s telephone number at the bottom level of press releases has an extension for Mike Mulholland, the CFO, and Nader Pourhassan, the CEO, but neither one particular is a “valid extension” in accordance with the automatic phone system.
That’s the type of approach that the SEC and FDA view unfavourably, and it is likely at the very least in part the reason behind their continued underdog status at both agencies.
The company also has come to be unresponsive to requests for interview, and so with the story coming out less than merely these ill advised publicity stunts, shorts are attracted, and big money investors, alienated.
But think of this “management discount” as the ability to buy a sizable role (should someone be so inclined) contained what might really well prove to be, in a situation of weeks, as the leading treatment 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 get over these shortfalls.
Average trading volume is actually constant above 6 million shares one day, and before the conclusion of this week, we will learn precisely how efficient leronlimab/PRO 140/Vyrologix is for saving lives from the worst of COVID 19. If the results are positive, this may be a huge winner.
Cytodyn Inc (OTCMKTS:CYDY)