Jeez man, your theory is literally a plot for a crime based movie. If I were to completely suspend disbelief and agree with your assumptions, each more unlikely than the last, then yes, the theory is plausible.
But I am sure that you have heard of Occam's Razor. It generally provides good guidance when you have competing hypotheses. I do prefer to go with the short hypothesis that requires me to make the fewest assumptions. It is also likely to spare everyone involved a prison sentence.
Here's my non-conspiratorial theory: The shorts want to cover their position, which they initiated massively in mid-2015 based on inside (and illegal) knowledge of a patient's death in the GOG phase 2 study, in as low and narrow a price range as possible. However, they are unable to do so, as they keep running into resistance from a highly knowledgeable and stubborn retail base (the volume and quality of posts on this board being evidence).
I want to add that I have never seen this kind of continuity of retail shareholding or activism on any other biotech message board in the last 10 years (except may be Mannkind), especially considering that the stock price has been rendered completely incongruent with investor belief and expectation. The share price is trapped due to this standoff between shorts and longs but the former obviously enjoy a massive upper hand due to their access to HFT.
The end game: Given that retail longs are not abandoning ship even below $5 (there isn't that much room to go lower) and I don't see any major institutional selling, if at all, or sufficient short covering yet, I only see one possibility. A grudging HFT-controlled partial, slow covering from shorts when material news is released, assuming that it will happen in the near term. I think it will. But for shorts to drastically reduce their short position, the company will have to come up with a huge cluster of monstrously positive material news with no room for misinterpretation.
