CytoDyn: Looking For A Turnaround Following Positive Updates
Nov. 20, 2021 5:47 AM ETCytoDyn Inc. (CYDY)2 Likes
Summary
CytoDyn continues to report noteworthy updates regarding their flagship product, Leronlimab, which has been able to post impressive results in numerous indications.
The bears have been on a winning streak as the company falls behind on clinical trials and regulatory actions.
The company is starting to get a hot hand with encouraging data, regulatory submissions, emergency use authorizations, and other positive updates.
These positive updates could lead to more potent catalysts in the future, which might fuel a potential turnaround that could restore the hype around the ticker and have a positive impact on the share price.
Cancer Cell Oncology concept cancer tumor cyst carcinoma lymphoma colon cancer brest cancers
CIPhotos/iStock via Getty Images
CytoDyn (OTCQB:CYDY) continues to report noteworthy updates regarding their flagship product, Leronlimab, which has been able to post impressive results in numerous indications. Over the years, CytoDyn and Leronlimab have generated copious amounts of hype and contention between bulls and bears. The bears have had a winning streak as clinical trials and regulatory actions fall behind schedule, which has hurt the share price. However, the company is starting to get a hot hand with encouraging data, regulatory submissions, emergency use authorizations, and other positive updates. These positive updates could lead to more potent catalysts in the future, which might fuel a potential turnaround that could restore the hype around the ticker and have a positive impact on the share price. I believe these recent happenings support my decision to switch from trading CYDY and focus on a speculative long-term investment strategy for the ticker. I intend to review some and provide my opinion about their impact on the company's fundamentals. In addition, I addressed downside risks associated with CYDY. Finally, I take a look at the charts to try to see if there are any signs of a reversal in the near term.
Recent Developments
Recently, CytoDyn publicized that they have started the resubmission of first section of Leronlimab's BLA for HIV, which is under rolling review by the FDA. CytoDyn CEO, Nader Pourhassan, believes "the application's issues have been successfully addressed, allowing us to advance the process." This portion will include the non-clinical and CMC sections. The company anticipates that the clinical section of the BLA will be submitted in Q1 of next year.
CytoDyn also stated that they plan on filing for expanded access use of Leronlimab for a fee to MDR HIV patients. The company is aiming to file as soon as next week.
On the same day, CytoDyn announced that Health Canada approved the emergency use of Leronlimab for a patient with mTNBC. CytoDyn is planning to ask Health Canada to permit expanded access use Leronlimab for mTNBC. CytoDyn will be working on similar approvals in other countries for mTNBC patients and other solid tumor cancers. Most importantly, the company will be filing with the U.S. FDA for expanded access use for mTNBC "shortly."
Winning Streak
These recent developments come in the wake of a couple of noteworthy data updates from Leronlimab in NASH and mTNBC. CytoDyn publicized preliminary marks from five patients in its 90 patient Phase II trial for NASH, which revealed all five patients experienced a decrease in fatty deposits "by as much as 45%" from baseline. Also, four out of the five patients showed a decrease in fibrosis "by as much as 10%" from baseline.
The company also announced some analysis from Leronlimab's CCR5+ Metastatic Triple-Negative Breast Cancer "mTNBC" study. This analysis demonstrated that 75% of the patients who displayed a decrease of circulating tumors cells after being administered Leronlimab had a 3600% improvement in 12-month OS. The analysis also revealed a 580% increase in 12-month PFS. Shortly after, the company submitted a Breakthrough Therapy application to the FDA.
It is important to note that both of these data updates are early and incomplete. So, we can't treat these results as the final analysis from a registration trial. Still, the NASH and mTNBC data do indicate that Leronlimab might be an elite candidate in both indications and justify the company's endeavors beyond HIV.
The recent developments have kept the company's hot-hand going by getting the HIV BLA back on track; bringing in product revenue; establishing Leronlimab as a legitimate player in oncology. It looks as if the company has addressed some of the major hindrances that have allowed the bears to continue to feast on the share price and investor sentiment. Now, investors have a solid winning streak that could be a setup for additional victories down the road.
Lingering Downside Risks
CytoDyn continues to fire off positive updates, which bolster the company's long-term outlook. However, there are several lingering downside risks associated with CytoDyn that investors should consider when managing their positions. Firstly, the company is still pre-commercial, so the company's product is not fully approved for any indication in any territory. As a result, all the near-term sales of Leronlimab could be one-off, so investors should not expect sequential growth from these sales. Secondly, the company is expected to continue to report losses for the foreseeable future, so the company will need financing, which could be dilutive. These downside risks are not going to be solved in the near term and could weigh on the share price until they are addressed.
Looking for a Reversal
I believe the recent events could spawn a reversal in the company's fortunes; the company's fundamentals; investor sentiment; and the share price. Although all of these categories do need an injection of bullishness, obviously, investors would like to see a turnaround in the share price more than anything.
Looking at the Daily chart (Figure 1), I believe the recent events could spawn a reversal in the company's fortunes; the company's fundamentals; investor sentiment; and the share price. Although all of these categories do need to be resuscitated, the share price is undoubtedly the critical component.
Figure 1: CYDY Daily (Source: TrendSpider)
Just getting some support near the $1 per share mark. Indeed, we have not seen any signs of a reversal confirmation that this is the bottom. Consequently, investors should be patient and look for a clear reversal setup before getting too aggressive with their position sizing. This way, investors are not locking up cash in a ticker that is grinding sideways or lower. What am I looking for?
I have several patterns or setups that I look for when trying to find a potential reversal of any stock. One of my favorites is a failed capitulation that generates a bullish divergence of the daily RSI with a sharp increase in trading volume. To me, this tells me that the new low enticed buyers to jump in as the selling pressure dried up. Looking back at the Daily chart, we could be seeing this scenario forming, but it is lacking the elevated volume that indicates the regime change. A failed move under $1 might form the conditions needed for this scenario to occur.
A Slight Change in Plans
In my previous CYDY article, I discussed how I was changing my investment strategy from trading the ticker to a long-term investment approach. The recent development has solidified that decision and has encouraged me to consider increasing the size and frequency of my buy transactions. Even if these developments fail to facilitate a prompt rise in share price, I believe they are preconditions for much more potent catalysts down the road.
I still have my time horizon out several years to allow the company time to prove their new endeavors with Leronlimab will be fruitful, which could drastically change the company's valuation.
Nov. 20, 2021 5:47 AM ETCytoDyn Inc. (CYDY)2 Likes
Summary
CytoDyn continues to report noteworthy updates regarding their flagship product, Leronlimab, which has been able to post impressive results in numerous indications.
The bears have been on a winning streak as the company falls behind on clinical trials and regulatory actions.
The company is starting to get a hot hand with encouraging data, regulatory submissions, emergency use authorizations, and other positive updates.
These positive updates could lead to more potent catalysts in the future, which might fuel a potential turnaround that could restore the hype around the ticker and have a positive impact on the share price.
Cancer Cell Oncology concept cancer tumor cyst carcinoma lymphoma colon cancer brest cancers
CIPhotos/iStock via Getty Images
CytoDyn (OTCQB:CYDY) continues to report noteworthy updates regarding their flagship product, Leronlimab, which has been able to post impressive results in numerous indications. Over the years, CytoDyn and Leronlimab have generated copious amounts of hype and contention between bulls and bears. The bears have had a winning streak as clinical trials and regulatory actions fall behind schedule, which has hurt the share price. However, the company is starting to get a hot hand with encouraging data, regulatory submissions, emergency use authorizations, and other positive updates. These positive updates could lead to more potent catalysts in the future, which might fuel a potential turnaround that could restore the hype around the ticker and have a positive impact on the share price. I believe these recent happenings support my decision to switch from trading CYDY and focus on a speculative long-term investment strategy for the ticker. I intend to review some and provide my opinion about their impact on the company's fundamentals. In addition, I addressed downside risks associated with CYDY. Finally, I take a look at the charts to try to see if there are any signs of a reversal in the near term.
Recent Developments
Recently, CytoDyn publicized that they have started the resubmission of first section of Leronlimab's BLA for HIV, which is under rolling review by the FDA. CytoDyn CEO, Nader Pourhassan, believes "the application's issues have been successfully addressed, allowing us to advance the process." This portion will include the non-clinical and CMC sections. The company anticipates that the clinical section of the BLA will be submitted in Q1 of next year.
CytoDyn also stated that they plan on filing for expanded access use of Leronlimab for a fee to MDR HIV patients. The company is aiming to file as soon as next week.
On the same day, CytoDyn announced that Health Canada approved the emergency use of Leronlimab for a patient with mTNBC. CytoDyn is planning to ask Health Canada to permit expanded access use Leronlimab for mTNBC. CytoDyn will be working on similar approvals in other countries for mTNBC patients and other solid tumor cancers. Most importantly, the company will be filing with the U.S. FDA for expanded access use for mTNBC "shortly."
Winning Streak
These recent developments come in the wake of a couple of noteworthy data updates from Leronlimab in NASH and mTNBC. CytoDyn publicized preliminary marks from five patients in its 90 patient Phase II trial for NASH, which revealed all five patients experienced a decrease in fatty deposits "by as much as 45%" from baseline. Also, four out of the five patients showed a decrease in fibrosis "by as much as 10%" from baseline.
The company also announced some analysis from Leronlimab's CCR5+ Metastatic Triple-Negative Breast Cancer "mTNBC" study. This analysis demonstrated that 75% of the patients who displayed a decrease of circulating tumors cells after being administered Leronlimab had a 3600% improvement in 12-month OS. The analysis also revealed a 580% increase in 12-month PFS. Shortly after, the company submitted a Breakthrough Therapy application to the FDA.
It is important to note that both of these data updates are early and incomplete. So, we can't treat these results as the final analysis from a registration trial. Still, the NASH and mTNBC data do indicate that Leronlimab might be an elite candidate in both indications and justify the company's endeavors beyond HIV.
The recent developments have kept the company's hot-hand going by getting the HIV BLA back on track; bringing in product revenue; establishing Leronlimab as a legitimate player in oncology. It looks as if the company has addressed some of the major hindrances that have allowed the bears to continue to feast on the share price and investor sentiment. Now, investors have a solid winning streak that could be a setup for additional victories down the road.
Lingering Downside Risks
CytoDyn continues to fire off positive updates, which bolster the company's long-term outlook. However, there are several lingering downside risks associated with CytoDyn that investors should consider when managing their positions. Firstly, the company is still pre-commercial, so the company's product is not fully approved for any indication in any territory. As a result, all the near-term sales of Leronlimab could be one-off, so investors should not expect sequential growth from these sales. Secondly, the company is expected to continue to report losses for the foreseeable future, so the company will need financing, which could be dilutive. These downside risks are not going to be solved in the near term and could weigh on the share price until they are addressed.
Looking for a Reversal
I believe the recent events could spawn a reversal in the company's fortunes; the company's fundamentals; investor sentiment; and the share price. Although all of these categories do need an injection of bullishness, obviously, investors would like to see a turnaround in the share price more than anything.
Looking at the Daily chart (Figure 1), I believe the recent events could spawn a reversal in the company's fortunes; the company's fundamentals; investor sentiment; and the share price. Although all of these categories do need to be resuscitated, the share price is undoubtedly the critical component.
Figure 1: CYDY Daily (Source: TrendSpider)
Just getting some support near the $1 per share mark. Indeed, we have not seen any signs of a reversal confirmation that this is the bottom. Consequently, investors should be patient and look for a clear reversal setup before getting too aggressive with their position sizing. This way, investors are not locking up cash in a ticker that is grinding sideways or lower. What am I looking for?
I have several patterns or setups that I look for when trying to find a potential reversal of any stock. One of my favorites is a failed capitulation that generates a bullish divergence of the daily RSI with a sharp increase in trading volume. To me, this tells me that the new low enticed buyers to jump in as the selling pressure dried up. Looking back at the Daily chart, we could be seeing this scenario forming, but it is lacking the elevated volume that indicates the regime change. A failed move under $1 might form the conditions needed for this scenario to occur.
A Slight Change in Plans
In my previous CYDY article, I discussed how I was changing my investment strategy from trading the ticker to a long-term investment approach. The recent development has solidified that decision and has encouraged me to consider increasing the size and frequency of my buy transactions. Even if these developments fail to facilitate a prompt rise in share price, I believe they are preconditions for much more potent catalysts down the road.
I still have my time horizon out several years to allow the company time to prove their new endeavors with Leronlimab will be fruitful, which could drastically change the company's valuation.
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