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Knowing CYDY? Down 5%!!
Thanks for the kind reply. It really is amazing the pickle this company is in regarding financing. IMO, in an attempt to hold on to everything, CYDY has increased the risk of losing everything to an unacceptable degree.
I believe only financing will resolve the SP. If I ruled the world, I would have sold an indication (GvHD?) or a territory (e.g., Japan) long ago for what would probably not be a "fair" deal to CYDY (e.g., $50M + small royalty) but which would be enough cash to unlock the value of this stock.
Good post. My fear is that, even if a deal closes, it may not make much of an immediate impact on the SP unless the partner is a big enough player that a very bright light gets shined on CYDY.
We know that there are a total of $90M in milestone payments, but we also know that the up-front milestone is "small" according to NP. We should expect that milestones will be tied to combo approval, which may be 6+ months away. We also know that this deal is for combo AND mono, so it's possible that milestones are also tied to MONO.
I'm bracing for a very back-loaded deal. For example, what if, say, $25M in milestone payments is due on combo approval and $50M in milestone payments is due on MONO approval? That would leave $15M in payments due between now and (best case) next summer. In that case, CYDY will still be raising money, and we better hope it is on much better terms than now.
In short, I don't believe we can be sure this deal will solve CYDY's financing issues alone UNLESS the partner is such a player (REGN - look at the list of analysts that covered its recent earnings call) that the increased attention on CYDY might result in organic SP appreciation allowing raises on better terms (hopefully in conjunction with good news in mTNBC and NASH).
Like you, I would take no pride in being right and would LOVE to be wrong.
Just my two cents. Good luck to us all. It should never have come to this, but here we are ... as much at risk as before CYDY announced combo PE.
No worries at all. I enjoy listening to different opinions, and I just add what I can where I can to the board re: legal issues. Time will tell as to whether CYDY's termination of Pestell for cause was justified. GLTU.
Just to be clear for the board, Pestell was fired by CYDY's board of directors FOR CAUSE - he did not quit.
The current litigation relates to whether or not the for cause termination by CYDY was justified, and, consequently, whether or not CYDY has the right to buy back 8M shares from Pestell for around US $8,000.00.
It remains to be seen, once all of the facts come out, whether or not CYDY made a mistake in terminating Pestell's employment for cause.
Until that time, the reasonable thing to do is withhold judgment, because we do not have all of the facts.
The financing to actually pursue the science?
Thanks for sharing. I share your fears.
I'm curious as to why you would decide to lawyer up two days after buying another 100K shares. What changed in your opinion?
Good post.
Just to manage expectations on the CROI abstract by Sacha/Italian doctor, all conferences have embargo policies that prevent press release of the substance of a paper until the paper is presented.
CROI is no exception.
http://www.croiconference.org/information/media/embargo_policies
CROI is in March 2020. I believe we would be notified of abstract acceptance, but, unless the information in the study falls into an exception (possible), we likely wouldn't learn of the substance for almost another 6 months.
(Not just a reply to you, misiu, just really FYI for the board)
All theoretical indications for a CCR5 blocker. MS is more of a stretch. Parkinsons and Stroke are much closer.
There is pre-clinical evidence that maraviroc is beneficial in both Parkinsons and stroke, and I believe maraviroc has human trials underway in at least one.
To my knowledge, CYDY hasn't done pre-clinical work yet (due to finances, I'm sure).
Parkinsons:
https://www.jimmunol.org/content/202/12/3337
Stroke:
https://www.ncbi.nlm.nih.gov/pubmed/30794775/
RE: never another OTC stock ... Preach on. The only way I would ever consider investing in another OTC stock is if I find another leronlimab (extremely unlikely), and even then I would tread much more cautiously and eyes wide open than I have here. This has been a humbling learning experience for me. My big takeaway from my time with CYDY is that, in biotech, finances drive the science forward, and management drives the finances. A company has to "win" in all three phases to optimize its potential. Before this investment, I had a (naive) belief that science would ultimately prevail in the end. I still believe it will here, but it remains to be seen whether the return will have been worth the toll.
Saltz, really well put. I agree. I said to someone earlier today that this is the most critical point in the company's history since the days and weeks leading up to the announcement that the combination therapy trial hit primary endoints.
I think NP will deliver the deal. He has his strengths and weaknesses, as we all do, but I find it hard to believe that he would be putting out videos saying the things that he is saying right now if the deal wasn't going to get done.
I also agree that it will be catastrophic if the deal falls through. That's why I've been predicting either a deal or a stock price in the teens by Thanksgiving.
My money is on the former.
I do believe NP, FWIW. I was just pointing out that there are a host of possibilities that could explain why we have no news, none of which we can definitively rule out.
My money is quite literally on CYDY pulling this out. I will be surprised if we have no news by middle of next week, and I predict we either WILL have a deal or will have a stock price in the teens/low 20's by Thanksgiving.
This is as critical a moment for CYDY shareholders as the months/weeks/days leading up to the announcement that the combo trial hit PE.
Could be safety data. Could be lawyers getting in the way. Deal could have fallen through. Also could be the deal is done and just waiting to be inked, if the partner wants to control the timing of the 8K (+4 business days). Not saying one of these is more likely than any other, but I am looking forward to answers.
I do as well. Timing and magnitude are the variables. I am heavily invested and no longer have the appetite to add, or I would be considering it now!
It is getting harder and harder to make the case for the middle ground, that's for sure.
Exactly. Volume was high-ish for CYDY today, but very little stock (priced in dollars) actually changed hands today. It's hard to read much of anything into that.
If it's a leak, it's not a very big one. Something like $240,000 in stock has changed hands this morning. Always important to keep perspective. Big volume for CYDY is still tiny volume in the grand scheme.
FWIW, I like your posts too. Don't always agree with every one of your opinions, but it's all good. I'm sure you wouldn't agree with all of my opinions either if I posted them!
Amen. I am ready to shift from "Is this going to pay off?" to "How much is this going to pay off?"
I agree with your predictions, but I'll allow that it may not come NEXT WEEK. These things often take WAY longer than they should (lawyers getting in the way).
I'll add another prediction, with a broader timeline. We'll either see a deal or a .20 stock price by Thanksgiving. I have 388,198 reasons why I am rooting for the former, but I unfortunately believe that the latter is the downside of a deal not getting over the line.
For the sake of CYDY's future, it's time to get the deal done!
I don't disagree, tom, but, as a subsequent poster noted, I felt the same way at .50, .40, etc. At this point, I have a fairly substantial position with an average of .50. The capital I could commit right now wouldn't substantially lower my average or substantially increase my holdings.
Hindsight being 20/20 I would love to have timed my entry differently, but I can't commit more cash to this right now. Hope CYDY management comes through soon.
Good luck to us all!
Unfortunately, I can't even say I know enough about BK to be dangerous, so I don't have anything legal to add to the mix.
I do think it's important, as you both pointed out, to note that nothing is a given until it occurs, so it is always POSSIBLE (if highly improbable) that CYDY would declare BK.
Too many people (BOD, Pestell, etc.) are common shareholders and likely would be wiped out.
In the 10-Q, they stated they have 85M shares unissued and unreserved (i.e., not tied up by reserve requirements in the convertible notes).
Way I see it, they could probably raise the money they need with Paulson-style deals (shares + 1/2 warrant coverage), at market or lower prices, and be just fine. For example, a $0.25 offering with full warrant coverage would raise $10M.
I am not saying that is going to happen, just that I believe CYDY has options man to raise the money if needed.
I think we're all just frustrated with the interminable waiting and that, for the reasons we've all cited before, CYDY's finances are currently a mess.
I know I am! I want financing straightened out to see what the science can really do. Then we'll unlock some value here.
GLTU
This was an excellent exchange, SJ and Grip, and is the reason these boards exist. I'd love to see, read, and participate in more of this nuanced discussion. Nice work.
No, management was granted options at $0.39.
The "D" on the form states whether the ownership is direct or indirect (i.e., via a corporation, LLC, or other legal entity owned/controlled by the management individual).
Fair enough - I didn't get to listen to the call, so I don't have the benefit of that context.
I feel good about things as well, I am just not sure on the "when" and "how much" and whether the ultimate return will, in the end, be commensurate with the risk taken and the stress endured!
Like you, I might feel differently if we're still having the same conversation at Christmas 2019.
Thanks for the reply, and good luck as always.
I hope you are right!
In response to your thought that either NP's silence is a tactic or a harbinger of good things, I think there is also a 3rd option to explain his silence.
It also could be that NP vastly oversold it when he stated at the shareholders' meeting on 9/12 that:
"we have secured funding to get to the end of the year ... we don’t have the funding but we have secured it from the people that will be funding us. I'm hoping to get it done next week ..."
It's possible that, in response to that statement and the stream of inquiries and criticism from shareholders since (as the SP plummeted another 25%), CYDY's attorneys told NP not to speak on funding issues anymore, lest he risk any sort of SEC action (see, Elon Musk "funding secured" tweet).
Again, I SINCERELY hope you are right and that a deal is IMMINENT.
No one would be happier than me.
But I think it's important to consider all possibilities.
GLTU
I agree with you. The new buyers come, IMO, only if the licensing/partnership/financing, what have you, is with a reputable, fairly brand-name entity.
Financing alone might help in that it may slow the SELLING, but it won't create demand on its own, again IMO.
Your memory is accurate. On September 12th at the SH Meeting, at approximately the 30 minute mark, NP stated:
“We have secured funding to get to the end of the year. We don’t have the funding but we have secured it from the people that will be funding us. I’m hoping to get it done next week to stop all the bleeding that we get from people who sell their shares, keep their warrants, that’s why the stock is always hurting.”
Let's hope the purpose of Monday's call is to announce that funding.
To answer your question, leronlimab
Yes, biotech BO is typically priced based on revenue potential, but no BP in its right mind would pay anything close to CYDY pipeline potential while SP sits at $0.35.
The SP absolutely matters in terms of CYDY's leverage to negotiate deals with potential partners/BP/etc.
Right now, CYDY is bleeding to death and trying to play hardball in negotiations with the tourniquet vendor. Who do you think holds the upper hand?
I remain hopeful that a deal is consummated in short order, but I retain a healthy skepticism that it will come to pass.
Nothing in life is guaranteed, including success in this investment.
I have no doubt that leronlimab will make money for SOMEONE, SOMEWHERE, SOMETIME, in SOME AMOUNT, but the someone doesn't necessarily have to be current CYDY shareholders.
If management doesn't pull this off, management could drive this company right into a ditch. In that case, someone will surely come along and give the stranded passenger (leronlimab) another ride, but the totaled car (CYDY and its shareholders) will sit destroyed on the side of the road, short of its destination.
The pressure is on management to get a deal done NOW, and management has put itself in an absolutely horrible negotiating position (see bleeding to death/tourniquet pricing).
Management has to get a deal done or it will get very ugly, very fast.
We're on the same page.
NP has delivered much for CYDY over the years in terms of scientific progress (PIII primary endpoints is an accomplishment in and of itself).
What has been lacking, as we all know, is SP appreciation. NP and others have been compensated handsomely the whole time while my (initial) investment has declined 50% since March 2017 (down 22% overall).
It's time for CYDY management to deliver for shareholders or find someone who can!
Bobby, I am upset and frustrated as well, but, FWIW, I never took this raise to be the "funding secured through the end of the year".
I expected another small Paulson-style raise and then a bigger deal of a different sort.
The ability to deliver on the latter is what is in question.
GLTU
Count me in the camp as well.
At this point, it is not enough anymore for CYDY to say it can get it done (it being BLA, partnerships, alternative financing, uplisting, etc.).
It's time to PROVE that they can get it done, and, right now, the market believes CYDY can't get it done.
I'm not sure to what degree I have lost confidence, but, perversely, in spite of all the recent "good news", I am less confident in this investment now than I was, say, a year ago.
Good luck to us all. I'm starting to think we need it (luck).
RE: ready to put this in the rear view mirror ...
I can't even imagine. I've been in almost 3, and I think it may have already taken an equal number of years off of my life.
I stick around because I doubt I'll ever see a situation again where potential value and current SP are so disconnected.
However, I am starting to doubt to what extent any of that potential value will ever be realized, given all of the company's headwinds and handicaps (self-imposed and otherwise).
There are days when I am just ready to be done with it, loss or gain (currently sitting down 22%)....
Grip, 6 weeks or so is when the company said they expected the binding agreements to be in place. At that time, the deal presumably would be PR'd and we would know the partner and the terms. Depending on those variables, it may or may not be a catalyst. Good luck to you
FWIW Grip, I don't have any problem with your position on this.
I've been long all the way, and I've had issues with the inconsistent positions taken by some posters here (positive then negative then positive then negative, ad nauseam), but I also think it's unrealistic for anyone to talk about massive market caps for CYDY at this point.
Off topic, I love NC. Many good friends live there, and I'm there as frequently as I can be. The Wilmington area is a particular favorite of mine. I am in GA but may reside in NC one day if life circumstances permit.
Good luck to us all!
This is where I landed as well.