The law firm of Kessler Topaz Meltzer & Check, LLP reminds investors of CytoDyn Inc. that a securities fraud class lawsuit has been filed on behalf of those who purchased or acquired CytoDyn common stock between March 27, 2020 and March 9, 2021, inclusive (the “Class Period”).
CytoDyn is a biotechnology company that has focused on the development and commercialization of a drug named “Leronlimab” which has long been promoted as a potential therapy for HIV patients. Since the beginning of the global COVID-19 pandemic, CytoDyn began aggressively touting Leronlimab as a treatment for COVID-19. Following CytoDyn’s pivot to hyping Leronlimab as a treatment for COVID-19, CytoDyn’s stock price rose exponentially.
Throughout the Class Period, CytoDyn continued to tout Leronlimab as a potential treatment for COVID-19 and to pump up the stock price of CytoDyn while executives aggressively sold shares. Indeed, while CytoDyn’s stock price was sufficiently pumped with the COVID-19 cure hype, long-term shareholders, including defendants Nader Z. Pourhassan, CytoDyn’s Chief Executive Officer, and Michael Mulholland, CytoDyn’s Chief Financial Officer, dumped millions of shares.
Following the cash-out by CytoDyn insiders and long-term shareholders, the defendants’ scheme began to unravel. On Friday, March 5, 2021 after the close of trading, and continuing over that weekend, CytoDyn issued press releases describing the results of the Phase IIb/III data on Leronlimab. The press releases had titles such as “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, hidden in the press releases was a disclosure that the primary endpoint of the study—lowering all-cause mortality at Day 28— was not statistically significant. Following the issuance of its 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.
Following the release of the data, the price of CytoDyn’s common stock fell over 28% to close at $2.91 on March 8, 2021. On March 9, 2021, the price of CytoDyn’s common stock continued to fall, dropping an additional 19% to close at $2.35.
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that CytoDyn’s development and marketing of Leronlimab as a treatment for COVID-19 was not commercially viable.
CytoDyn investors may, no later than May 17, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)