March 18, 2021 - An investor in shares of CytoDyn Inc. (OTC: CYDY) filed a lawsuit in the U.S. District Court for the Western District of Washington over alleged violations of Federal Securities Laws by CytoDyn Inc. in connection with certain allegedly false and misleading statements made between March 27, 2020 and March 9, 2021.
Vancouver, WA based CytoDyn Inc. operates as a late-stage biotechnology company.
On March 5, 2021, CytoDyn Inc. provided an update on its product "Vyrologix (leronlimab-PRO 140), a CCR5 antagonist with the potential for multiple therapeutic indications." CytoDyn Inc. stated, in part, that "the Phase 3 trial of leronlimab for the treatment of severe-to-critical patients with COVID-19 demonstrated continued safety, substantial improvement in the survival rate, and faster hospital discharge in critically ill COVID-19 patients." Then on March 8, 2021, an article was published entitled "CytoDyn: Parsing Failure." The article asserted that CytoDyn Inc's "leronlimab Phase 3 trial on COVID-19 severe-to-critical patients failed . . . to meet both its primary endpoint and all secondary endpoints with any statistical significance" and described CytoDyn as having effectively "buried" the results in its press release. The article noted that "[a] normal biotech company would have stated this clearly, both in its PR titles and in their text bodies. Cytodyn, however, did something else."
Shares of CytoDyn Inc. (OTC: CYDY) declined from $7.40 per share on February 2, 2021, to as low as $2.00 per share on March 11, 2021.
According to the complaint the plaintiff alleges on behalf of purchasers of CytoDyn Inc. (OTC: CYDY) common shares between March 27, 2020 and March 9, 2021, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between March 27, 2020 and March 9, 2021, the defendants made materially false and/or misleading statements, and failed to disclose that while CytoDyn's stock price was sufficiently pumped with the COVID-19 cure hype, long-term shareholders, including CEO Nader Z. Pourhassan and CFO Michael Mulholland, dumped millions of shares, that CytoDyn engaged in a wrongful scheme with its lender, Iliad Research and Trading L.P. ("Iliad"), and its principal John Fife ("Fife"), whereby Iliad and other Fife entities operated as an unregistered securities dealer for CytoDyn, and that Iliad obtained a convertible promissory note from CytoDyn and converted the note into newly issued shares of CytoDyn and sold those shares into the public market at a profit, in violation of the dealer registration requirements of the federal securities laws.