Shares of CytoDyn Inc. (OTCMKTS:CYDY) Tumble on Announcement; What’s Next for This Stock?

CytoDyn Inc. (OTCMKTS:CYDY)’s share price fell on news that the biotech company has announced a $10.0 Million Registered Direct Offering.

VANCOUVER, Washington, Sept. 12, 2016 (GLOBE NEWSWIRE) — CytoDyn Inc. (CYDY), a biotechnology company focused on the development of new antibody therapies for combating human immunodeficiency virus (HIV) infection, today announced that it has entered into definitive agreements with healthcare dedicated institutional investors for an offering of 13,333,334 shares of common stock, at a price per share of $0.75, and warrants to purchase 6,666,667 shares of common stock with gross proceeds of approximately $10.0 million in a registered direct offering.  The warrants have an exercise price of $1.00 per share and will expire five years from the date of issuance. The closing of the offering is expected to take place on or about September 15, 2016, subject to the satisfaction of customary closing conditions.

Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC, acted as the exclusive placement agent in connection with this offering.

Net proceeds from the offering are expected to be approximately $9.0 million. CytoDyn intends to use the net proceeds from the offering to fund clinical trials for its product candidates and for general corporate purposes.

The securities described above are being offered by CytoDyn pursuant to a shelf registration statement (File No. 333-213349) previously filed with and subsequently declared effective by the Securities and Exchange Commission (the “SEC”). A prospectus supplement relating to the offering will be filed with the SEC and will be available on the SEC’s website at http://www.sec.gov and following such filing, copies of the prospectus supplement and the accompanying base prospectus relating to this offering may be obtained at the SEC’s website at http://www.sec.gov, or from H.C. Wainwright & Co. by e-mailing placements@hcwco.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein. There shall not be any offer, solicitation of an offer to buy, or sale of securities in any state or jurisdiction in which such an offering, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About CytoDyn

CytoDyn is a biotechnology company focused on the clinical development and potential commercialization of humanized monoclonal antibodies for the treatment and prevention of HIV infection. The Company has one of the leading monoclonal antibodies under development for HIV infection, PRO 140, which has completed Phase 2 clinical trials with demonstrated antiviral activity in man and is currently in Phase 3. PRO 140 blocks the HIV co-receptor CCR5 on T cells, which prevents viral entry. Clinical trial results thus far indicate that PRO 140 does not negatively affect the normal immune functions that are mediated by CCR5. Results from seven Phase 1 and Phase 2 human clinical trials have shown that PRO 140 can significantly reduce viral burden in people infected with HIV. A recent Phase 2b clinical trial demonstrated that PRO 140 can prevent viral escape in patients during several months of interruption from conventional drug therapy. CytoDyn intends to continue to develop PRO 140 as a therapeutic anti-viral agent in persons infected with HIV and to pursue non-HIV indications where CCR5 and its ligand CCL5 may be involved. For more information on the Company, please visit www.cytodyn.com.

About PRO 140

PRO 140 belongs to a new class of HIV/AIDS therapeutics – viral-entry inhibitors – that are intended to protect healthy cells from viral infection. PRO 140 is a humanized IgG4 monoclonal antibody directed against CCR5, a molecular portal that HIV uses to enter T-cells. PRO 140 blocks the predominant HIV (R5) subtype entry into T-cells by masking this required co-receptor, CCR5. Importantly, PRO 140 does not appear to interfere with the normal function of CCR5 in mediating immune responses. PRO 140 does not have agonist activity toward CCR5 but does have antagonist activity to CCL5, which is a central mediator in inflammatory diseases. PRO 140 has been the subject of seven clinical trials, each demonstrating efficacy by significantly reducing or controlling HIV viral load in human test subjects. PRO 140 has been designated a “fast track” product candidate by the FDA. The PRO 140 antibody appears to be a powerful antiviral agent leading to potentially fewer side effects and less frequent dosing requirements as compared to daily drug therapies currently in use.

Original Source

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Potential investors in CytoDyn Inc. (OTCMKTS:CYDY) should be looking at the current and historical short data in order to get a glimpse of where the market believes the stock might be headed.  According to the most recent information, there are 683200 total short interest.  Given the stock’s average daily volume of 195129, this results in 2.1 days to cover.  In looking at the total shares short in respect to the total outstanding share total of 124530000, yields a 0.00549% of total shares that are short.  Compared to last month, this is a -13.23 change in total short interest.

When investors engage in short selling or “shorting a stock”, they actually borrow shares from an existing owner, sell the borrowed shares at market price, and take the cash.  The short sellers then promise to replace the stock in the future and makes dividend payments out of their own pockets to cover the dividend income that is no longer exists on the original, now borrowed and sold, shares.

They hope that the stock price will fall or that the company will fail and go bankrupt, leading the equity holders to ruin.  The short sellers will then buy the stock back at a much lower price and replace the borrowed shares, pocketing the difference.

Shorting a stock can be very risky if the price doesn’t decline like planned and, in fact, increases.  It’s important for any investor to understand the dangers and potentially catastrophic financial losses of short selling.

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CytoDyn Inc. (OTCMKTS:CYDY) shares closed the most recent session at 0.81 moving from the previous open or $-0.145.  This is compared to the stock’s 52-week high of 1.57 and 52-week low of 0.64.  Is now the right time to take stake in the 94480000 market cap company?

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Disclaimer: The views, opinions, and information expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any company stakeholders, financial professionals, or analysts. Examples of analysis performed within this article are only examples. They should not be utilized to make stock portfolio or financial decisions as they are based only on limited and open source information. Assumptions made within the analysis are not reflective of the position of any analysts or financial professionals.

 

 

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