Robbins Geller Rudman & Dowd LLP Announces Lead Plaintiff Deadline in the CytoDyn, Inc. Class Action Lawsuit - Seite 2
On August 26, 2020, The Wall Street Journal reported that, despite earlier representations, CytoDyn was not being considered for Operation Warp Speed. According to a senior administration official interviewed by The Wall Street Journal, “CytoDyn had only completed a preliminary qualification for being included in the initiative.” On this news, the price of CytoDyn shares dropped more than 17% over the next two trading days.
Then, on September 3, 2020, the U.S. Securities and Exchange Commission (“SEC”) filed a lawsuit against Iliad, Fife, and certain Fife-related entities, calling Fife a “recidivist violator of the federal securities laws.” Specifically, the SEC alleged that Iliad and its related entities operated as unregistered securities dealers in violation of the federal securities laws by buying convertible promissory notes, converting the notes into newly issued shares of stock, then rapidly selling those shares into the public at a profit.
Thereafter, on November 10, 2020, CytoDyn entered into an amended $28.5 million Secured Convertible Promissory Note with Fife’s company, Streeterville Capital LLC, a related entity that was not specifically named in the SEC action against Iliad and Fife. On this news, the price of CytoDyn’s shares fell.
Finally, on March 5, 2021, and continuing over the weekend, CytoDyn issued a flurry of press releases describing the results of Phase IIb/III data on Leronlimab. Hidden in press releases with titles like “Cytodyn to File Accelerated Rolling Review with MHRA and Interim Order (IO) with Health Canada for COVID-19” and “Cytodyn’s Phase 3 Trial Demonstrates Safety, a 24% Reduction in Mortality and Faster Hospital Discharge for Mechanically Ventilated Critically Ill COVID-19 Patients Treated with Leronlimab,” however, was a disclosure that the primary endpoint of the study – lowering all-cause mortality at Day 28 – was not statistically significant. Following the flurry of press releases, CytoDyn was accused of “massaging the data” and squeezing good news out of a failed study, the results of which CytoDyn reportedly sat on pending regulatory discussions. On this news, the price of CytoDyn’s shares fell more than 28%, further damaging investors.