Commenter Tom recently asked a very good question. To paraphrase, “everyone’s favorite reverse-merger pink sheet Coronacrapper, Cytodyn (CYDY) had bad news from the FDA but I can not find it on the FDA site. Can you help?” Certainly.
The answer to Tom’s question should be quite illuminating to readers unfamiliar with the FDA, clinical trials, and the drug approval process. Before we begin, it would be helpful to review the Maxims, especially Maxims 19 and 20.
So just what is Breakthrough Therapy Designation (BTD)? You can read all about it here. To briefly summarize, it is a stack of forms that a company fills out and sends to the FDA along with preliminary clinical evidence. The evidence must back up the company’s belief that the treatment may show a substantial improvement, on at least one clinically significant endpoint, over available therapies.
Receiving BTD does confer certain benefits to the company developing the drug. It does not, in any way, mean the FDA “likes” a drug, or “wants” a drug to succeed. Getting BTD only means that the company filled out the forms correctly and had shown compelling preliminary clinical evidence. (Spoiler alert! Clinical evidence, unfortunately for Cytodyn, is not stories about The NaDDir’s* mother-in-law.)
The existence of a filing for BTD status is actually confidential. A company applying for BTD is not required to disclose it to anyone, let alone the shareholders, but almost always do, in order to create hype and serve up a dose or two of that sweet sweet stock pimpin’. A company is not required to disclose if the request was granted or denied, either.
Furthermore, the FDA is forbidden from divulging this information as well.
How can we tell what happened to that January request? Easy. The FDA responds to BTD requests within 60 days.
So, let’s see what happened with Cytodyn’s BTD request following the January submission. A month after that first press release the company mentioned it was awaiting a BTD decision from the FDA. See this press release.
Fast forwarding to March, what did the company say about the BTD application after the 60 day window had passed? A quick perusal of the Cytodyn website shows no press releases in mid-March about the BTD application.
However, there WAS a press release from the 12th of March 2020 that Cytodyn appears to have removed from their website. It is still available on Bloomberg.
Instead of getting its BTD request approved, the BTD request was denied, and the Cytodyn clowns spun the rejection as a recommendation for a “request for a meeting”.
What retail and generalist investors do not know, but every professional does know, is that these “preliminary BTD” meetings are supposed to be held before a company makes a BTD request, to avoid wasting everyone’s time and potentially embarrassing the company. Con artists and stock promoters hope that retail investors never learn the truth about these things, they expect people to be lazy and not do the most basic research on these processes. The truth is easy to find, however. Says the FDA:
“How can you be so sure it was rejected?”, a bull might ask. Time for another quick lesson. Scams and shady companies will lie in press releases all the time. Sometimes outright lies, sometimes sins of omission. SEC filings, 10Ks in particular, are usually more truthful. So instead of believing anything in a press release, the rule at BuyersStrike! HQ is to believe nothing in press releases, and instead rely on the filings.
Let’s examine the recent Cytodyn 10K filing (get it here) from August, and see what it said about loserlimab getting BTD status from the FDA.
This section discloses that the Cytodyn BTD application from January was, in fact, denied! Otherwise, the clown crew would have awarded themselves 11.6mm free shares.
Moving on, let’s examine the company’s much hyped, but obviously doomed, BLA submission to get approval of loserlimab for HIV.
The company really started beating the drum about the BLA in late April with a series of press releases. Like this one from April 24th:
And this one claiming the BLA filing was complete and submitted just a few days later (spoiler alert: it wasn’t true!):
How can one tell that press release was false? Simple, just look at the press release from May 8th:
Once submitted, the FDA will respond within 60 days if they will even accept the BLA for review. Only upon acceptance will the application be reviewed for possible approval. Based on this calendar, sometime in mid-July the company should have an answer from the FDA as to whether or not it will even evaluate loserlimab.
Mid July comes around and the company issues a bizarre press release about their BLA submission, puzzling the retail cult, but surprising exactly zero professionals. Says the company:
Compare the company’s soft-selling in the press release (and conference calls) to the stark disclosure in the 10K. Buried in the 10K, is this admission:
Notice compared to the press release there is not a word in the filing about the FDA “suggesting” anything. RTF letters are non-public, you will not find them on the FDA website. It is up to the company to disclose them to investors.
Hopefully Tom and some others have learned something today. Now for some homework. Do the same research and analysis on Cytodyn’s pathetic attempts to get an EUA for Covid, additional EINDs for Covid, and Expanded Access for Covid.
Want to know why a NASDAQ listing is a virtual impossibility for Cytodyn? Read all about that here. Want to know why loserlimab is basically useless for anything except 1 (and only 1) strain of HIV? Read here.
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