CytoDyn Inc (OTCMKTS:CYDY) Revs Up On News

CytoDyn Inc (OTCMKTS:CYDY)’s volumes have never really been consistent and unfortunately, the same can be said about the performance. We do observe increased interest every now and then, but on the whole, excitement tends to dissipate quite quickly around CYDY. In a similar fashion, apart from a few jumps, the price has been mostly going down over the last few years. But is this about to change?

In 2012, CYDY acquired the PRO140 antibody which should suppress the HIV virus from Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX), and they’ve been trying to commercialize it ever since. They seem quite confident that they can do it. So much so, that they signed a manufacturing agreement in mid-2014 which means that once the PRO140 gets the all-clear from the FDA, CYDY will waste no time looking for a factory to produce it.

More importantly, the all important green light might be getting closer and closer. Yesterday, CYDY announced that they have witnessed HIV suppression for nearly eleven months now and they hinted that they’ll soon request a meeting with the FDA in order to discuss the positive results. A conference call will also be conducted tomorrow which should shed some more light on the matter.

Thanks to the news, CYDY finally received some attention yesterday. In a matter of six and a half hours, investors poured nearly $650 thousand into the stock. The ticker went up and it briefly managed to poke its head above the $1 per share mark for the first time in over a month. It then went down, but it still closed the session at $0.98 (about 9% in the green).

So, the people from the management team seem confident in the future success and by the looks of things, the same can be said about investors. Is there anything that can stop CYDY?

Well, the latest financial report doesn’t look too promising. It covers the twelve months ended May 31 and it presents investors with the following figures:

  • cash: $1 million
  • current assets: $2 million
  • current liabilities: $10.7 million
  • no revenue since inception
  • yearly net loss: $25 million

Getting an HIV drug on the market isn’t exactly cheap and CYDY is clearly going to need a fresh cash injection. The lack of revenues could make finding non-toxic funding difficult and that’s a bit of a worry because the stock has already gone through some dilution. Between June 2014 and June 2015, CYDY‘s number of issued and outstanding shares grew from just under 56 million all the way to 70 million.

Then, of course, there are the risks associated with virtually every biotech penny stock that is trying to complete the long and expensive FDA approval process. CYDY‘s PRO140 still has some trials to go through and even the smallest slip-up could cause disaster which means that proceeding with caution is probably a good call.

About twenty-five minutes after the opening bell, CYDY is sitting at $0.93 (about 5% in the red).

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