Is CytoDyn Inc. (OTCMKTS:CYDY) A Buy?

CytoDyn Inc (OTCMKTS:CYDY) has been making big moves lately, which have propelled the stock from December low of $0.270 to new highs. Notably, CytoDyn’s surge has come on significant volume as well, a clear sign of strong investor interest in the stock.

The excitement in CytoDyn stock that we are witnessing right now comes as the company has taken a leading role in the fight against the deadly Wuhan coronavirus. Moreover, investors have started pouring on CytoDyn stock as the company advances the development of its lead drug candidate as a treatment for about two dozen different cancer types.

Before we delve into the details, here is a brief profile of CytoDyn for those investors who may have just come across this company for the very first time.

About CytoDyn

CytoDyn operates in the healthcare sector as a biotechnology company. It is engaged in developing innovative treatments for a broad range of medical indications. Its lead product candidate is leronlimab (PRO 140). Clinical trials of leronlimab are ongoing for conditions such as HIV and multiple cancers with impressive results already attained. But CytoDyn is expanding its target conditions with leronlimab in the wake of the outbreak of the Wuhan coronavirus.

Here are some of the recent developments at CytoDyn that have excited renewed investor interest in its stock.

CytoDyn’s leronlimab under consideration as Wuhan potential coronavirus treatment

CytoDyn’s lead drug candidate leronlimab (PRO 140) has produced impressive clinical outcomes in cases where it has been tested as a potential treatment for HIV and multiple cancers. Now leronlimab is under evaluation as a potential treatment for the deadly Wuhan coronavirus.

The novel coronavirus, which originated in China, is spreading rapidly and killing people that the World Health Organization has declared it a global public health emergency. The virus has already killed nearly 700 people and infected more than 30,000 people. The infections continue, so is the scramble to stop the deadly virus.

 “We support efforts to identify new and potential treatments to limit the spread of the 2019-nCoV [coronavirus], which is affecting people on a global scale at an accelerating rate. We look forward to advancing discussions with potential partners to study leronlimab as a treatment option for this deadly virus,” commented CytoDyn CEO Nader Pourhassan.

As the coronavirus threat spreads around the world, countries are scrambling to find solutions. That promises to open a new market for CytoDyn’s leronlimab beyond HIV and cancer treatment markets it has initially targeted.

In China, the economic cost of the coronavirus outbreak is estimated above $60 billion in the current quarter alone. The cost to the global economy as the virus spreads to more countries and sickens and kills more people would be even greater. That explains why the global rush to stop the virus. Global health officials would want to move quickly and work with CytoDyn to see if its drug candidate leronlimab, which has worked well in past trials, could help combat the deadly virus.

Hopes that leronlimab could be adopted in the global fight against coronavirus has contributed to the investor excitement in CytoDyn stock.

CytoDyn is advancing trial of leronlimab as cancer treatment

But tackling coronavirus is just a new potential opportunity for CytoDyn’s leronlimab. CytoDyn has mainly focused on developing leronlimab as a treatment for HIV and cancer. The company continues to make progress in the HIV and cancer treatment areas to the excitement of investors.

For example, on February 6, CytoDyn announced plans to commence a Phase 2 clinical trial with leronlimab for the treatment of about 22 different solid tumor cancers, including lung, stomach, breast and ovarian cancers.

CytoDyn intends to enroll about 30 cancer patients in the so-called basket trial. It expects preliminary results to start streaming within 3 to 4 weeks after the study kicks off. CytoDyn is ready to start the trial immediately it receives the FDA greenlight because over 50 patients have already requested to use leronlimab.

“If leronlimab proves to be as effective in this basket trial as we have seen in the first 4 patients in our [previous trials], we believe we will be able to file for another breakthrough therapy designation (BTD) for the multiple cancer indications evaluated in this basket trial,” commented CytoDyn CEO Nader Pourhassan.

With leronlimab, CytoDyn is pursuing a huge revenue opportunity in the cancer treatment market. The global solid tumor cancer treatment market was worth $121.3 billion in 2018 and is projected to reach $424.6 billion in 2027.

Bottom line

CytoDyn’s role in the efforts to stop Wuhan coronavirus has helped put the stock on the radar of many investors. But the breakout in the stock is just starting to unfold, which means the stock is still a discount entry opportunity at current levels.

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Disclosure: We have no position in CytoDyn and have not been compensated for this article.