Cytodyn Inc (CYDY)

[fred198484]

I appreciate the response, but your original comments weren't welcomed by many because they weren't grounded in facts or reality.

Time will tell what the reality is with the PRO 140 results.
If you are not worried about the lack of specificity in the release,
you likely don't have much experience with these things or are just blinded by your positive expectations. But since you acknowledged earlier that the press release left you somewhat unhappy, I think you actually do know there is room for concern.

Regarding p value, your initial post said:

"The low "p" value also tells you that there may have actually been many non-responders."

That's factually incorrect. A low p value is indicative of more conclusive data against the null hypothesis. Simply put and all else aside, it is widely accepted statistical practice that a low p value is better than a high p value, and p<0.01 is a very small p value.

Your response said:

"It is good but I have seen better and combined with the lack of detail about the patients response leads me to conclude there may be more non-responders or low responders than many believe."

Reversing your position in your second post does your credibility no favors, and suggesting that you've "seen lower" doesn't either. I find Kate Upton more attractive than Jennifer Lawrence - that doesn't suggest that Jennifer Lawrence isn't objectively attractive. She's still attractive, and a p value of below 0.01 is still very, very low.

If you want to make a statistical argument about sample size, confidence intervals, p values, etc... be my guest. We can have fun. I'll give you a hint though... in small sample sizes, small numbers of non-responders have the potential to greatly impact the p value. That's one reason the stat nerds prefer larger sample sizes - they correct for random outcomes in individual observations much more efficiently. In this case (N=52), a significant number of non-responders would nearly guarantee a statistically insignificant (read: higher value and not good) p value. The very low observed p value suggests that there were very few non-responders. Again, you can choose to disagree with statistical practices, but I'll side with the numbers.

You are making a mountain out of a mole hill on my p value comments. My comment on it being "low" was meant as "not as good as I would have thought it would be. For example, Ibalizumab, whose phase III trial was pretty similar to PRO 140's combo trial, had a p value of 0.0001, which is technically lower but much better. If I had said higher rather than lower, many who are unfamiliar with these statistical measure may not have understood what I was saying. We both understand what the p value means and I actually spoke with someone who is intimately involved in drug testing and they suggested to me there may have been many non-responders in this trial given the p value. If I recall correctly, that was the case in at least one of the earlier trials as well.

I also believe that the wording of PRs are very carefully chosen. That's why I choose to interpret the words that are said, and not dishonestly paraphrase to twist meaning. Similarly, the fact that they didn't mention a BLA doesn't imply that there "likely will be no BLA for combo." Omission of a direct statement in a quick PR intended to get the word out that primary endpoints were met on a trial doesn't imply a wholesale change of strategic direction for a firm that has consistently stated that a BLA for combo was a planned step. Well, it doesn't to me anyway. You can read whatever you want, but that doesn't mean that it makes sense.

I just think there is a significant chance you are wrong about that. IF the data tells you can get approved, you will make sure that gets into the press release. It is not something that is overlooked in order to get the topline results out quickly. It was a critical omission that raises a serious risk that should not be ignored. If CYDY just somehow forgot to include it, that indicates management is not ready for prime time.

Regarding money, Paulson investors have consistently put money into the company. It appears to me that management was strategically raising money in small amounts in an attempt to minimize dilution and impact on share price, and they were able to get money whenever they needed it. You may interpret that differently, and I'll agree to disagree. I still think your comment about lawyers is baffling. Even if they were led to believe that they would be getting good news... that's exactly what they got. Primary endpoints were met. When did primary endpoints become unimportant? When did meeting primary endpoints in a phase 3 clinical trial become bad news??

First, if you are of the impression that frequent, small offerings indicate a clever management team and fund raising strategy, you are just wrong. That is desperation financing. Second, they ended up raising a lot just before the data after barely being able to raise anything prior to that in the last few months. All the financings were done at the same price. If they last large round was raised at a higher price, your argument might have made sense, but it wasn't, so it doesn't make sense. Third, the primary endpoint data has led to a lower share price and it seems reasonable to believe that shareholders buying just before the release might feel they were misled. You are right they might not have a case right now as the share price remains above the issue price, but that could change.

Also, you mention in your response that there is "huge potential dilution coming from the conversion of the warrants just ahead". This signals to me that you don't understand the finance aspect at all - or you just don't care. In a buyout - which I believe that every person here suspects is the only way this investment ends positively, although I could be wrong about that - outstanding warrants are automatically converted. That means that on a fully diluted basis, those warrants already count as shares, are already expected to impact investors ROI at buyout, and nobody keeping score at home would count warrant conversions as new dilution. In fact, if you weren't already including those in your full share count, you should reassess your investment thought process. I, personally, would welcome the cash conversion of every single outstanding warrant, as it would preclude the marginal need for additional new shares (and associated new warrants!) that actually dilute the count.

First, my comments about dilution were in the context of the sale of stock last week and how odd it was. Seems to me they thought the warrant conversion might not happen because of bad results. Granted they did not really know but this stock sale indicates management's confidence level perhaps wasn't as high as we thought. Second, if you really believe a buyout is the only profitable way out, what you are really saying is the chance of success is pretty low. There will not be a buyout if the data is not good enough and if it is good enough,
the stock will reflect it. Third, I agree counting all the warrants as fully issued shares is a good idea for CYDY investors. Moreover, you should really add a ton of additional shares as it is going to be a long time before CYDY is generating revenues and it will need a lot more financing. CYDY shareholders better hope Paulsen has an unending source of money for CYDY. So far, they have been, so maybe my concern on that front is overdone. But I think CYDY shareholders ought to be worried there is a limit to what Paulsen can do.

I used to believe that you made some good points on occasion, even when I disagreed. For example, we've previously had exchanges where you suggested that the time YOU would target to get in would be after the last big dilution, and you were willing to give up the potential of a much better return if said dilution wasn't necessary or highly impactful. I get that. It's a reasonable investment thesis, even if it doesn't align with my own. But I no longer believe that you're the slightest bit credible in anything you say.

I don't think I am lacking in credibility. If you had listened to me and followed my strategy, you and others would likely be better off. Like everyone else, I don't get all my expectations right, but I got the main one right on CYDY so far. So, it might serve you well to give due consideration to my thoughts as you have in the past.
There is no reason to get chippy - just discuss the situation as you see it as will I and all will benefit from the dialogue.