|Company Name||CytoDyn Inc.|
|Class Period||March 27, 2020 to March 09, 2021|
|Lead Plaintiff Motion Deadline||May 17, 2021|
On August 26, 2020, The Wall Street Journal reported that, despite earlier representations, CytoDyn was not being considered for Operation Warp Speed, the federal government’s program aimed at fast-tracking virus treatments. According to a senior administration official, “CytoDyn had only completed a preliminary qualification for being included in the initiative.”
On this news, the price of CytoDyn share price fell $0.66 per share, or 17%, over two consecutive trading sessions to close at $3.15, thereby injuring investors.
On September 3, 2020, the U.S. Securities and Exchange Commission (“SEC”) filed a lawsuit against Iliad Research and Trading L.P. (“Iliad”), CytoDyn’s lender, Iliad’s principal John Fife (“Fife”), and certain Fife-related entities. 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.
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 share price closed at $2.02, representing an 80% decline from the Class Period high.
On March 5, 2020, after the market closed, CytoDyn began issuing press releases that described the results of Phase IIb/III testing data for Leronlimab for the treatment of COVID-19. Masked by positive titles, these releases disclosed that the primary endpoint for the study (lowering all-cause mortality at Day 28) was not statistically significant.
On this news, the Company’s share price fell $1.14 per share, or 28%, to close at $2.91 on March 8, 2021. On March 9, 2021, CytoDyn shares dropped an additional 19% to close at $2.35, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements touting Leronlimab as a potential treatment for COVID-19 to pump up the CytoDyn’s stock price while executives aggressively sold their shares. The complaint also alleges that CytoDyn engaged in a wrongful scheme whereby Iliad and other Fife entities operated as an unregistered securities dealer for CytoDyn.
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