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The papers of the biotech company CytoDyn (WKN: A0YHA5) have been in high spirits since the outbreak of the corona crisis at the end of last year. Starting from the December low of $ 0.27, there were meanwhile gains of up to + 1,196%.
The company’s value driver is the antibody active ingredient leronlimab, which can already look back on a successful phase 3 as a combination therapy for HIV and could be approved this year.
However, it is not the HIV indication that has fueled the stock extremely for weeks, but the potential use Leronlimabs as COVID-19 therapy. The active substance has been administered to affected patients for some time. As the company announced yesterday, the number of patients treated rose to 10. The previous impressions were “encouraging”.
The FDA had previously given Leronlimab “Emergency Investigational New Drug” status, although no robust studies on the effects and tolerability in COVID-19 patients are available. A corresponding phase 2 study should now start in parallel and provide the necessary evidence.
CytoDyn today announced much-needed funding: $ 15 million will be made available in the form of a convertible bond. Positive: the conversion price of USD 4.50 is significantly higher than the current exchange rate. Negative: Interest rates are high at 10 percent and creditors can incorporate the company’s assets in the event of bankruptcy.
The better alternative: Bellerophon Therapeutics (WKN: A2PZZR)
While CytoDyn is now trading at over $ 1 billion in market capitalization despite a weak balance sheet, Bellerophon Therapeutics is less than 100 million.
Bellerophon has also received approval from the FDA to market its asset for COVID-19 therapy and reported the first patient deployment yesterday and shortly thereafter a $ 15.3 million capital increase – pleasantly without issuing price-cutting warrants.
In contrast to Leronlimab Bellerophon’s “INOpulse” is not used in patients who are already confronted with severe respiratory complications. Instead, inhalation therapy aims to prevent serious courses from developing in the first place.
The INIpulse is said to inhibit virus reproduction using nitrogen monoxide. The 2002/2003 SARS pandemic demonstrated that the gas slows the spread of the virus, which gives hope that INOpulse could play a key role in combating the corona pandemic. CEO Fabian Tenenbaum commented on the latest milestone as follows:
We believe that the first patient with COVID-19 to begin treatment with INOpulse could be a critical step in the fight against this pandemic, as therapy can stop the disease from progressing and reduce the need for ventilation support.
Stock with potential over $ 50
After consolidating the share price at the financing level around USD 12, entry seems very tempting again, after SD readers were able to bag massive profits yesterday at prices above USD 20.
In the coming weeks, the share will have significantly more upside potential than CytoDyn, whose valuation is currently far more than ten times higher. While CytoDyn recently fueled the hype almost daily with Corona News, Bellerophon still keeps plenty of powder dry.
Conflict of interest: This post represents an opinion of the author. The author, editor, employee and NBC members naturally hold shares in the company discussed. There is therefore a specific and clear conflict of interest. The author, publisher, employees and NBC members intend to buy or sell the shares – depending on the market situation, even at short notice – and could benefit from increased trading liquidity.
