Recently, I shared with InvestorPlace readers interested in equity crowdfunding opportunities a privately held biotechnology firm called Cytonics. Listed on the SeedInvest.com platform, buying Cytonics stock gives you exposure to a groundbreaking regenerative medical technology that could potentially address the root cause of osteoarthritis.
Representing a $180 billion burden on the health care system, a solution here could have profoundly positive implications for our economy.
But another reason why so many have decided to invest in Cytonics stock is the issuing company’s innovative approach to the novel coronavirus pandemic.
As you know, the White House’s initiative Operation Warp Speed has incentivized several major pharmaceutical companies to drive resources toward a coronavirus vaccine. Unfortunately, this race has had a few high-profile hiccups.
First, AstraZeneca (NASDAQ:AZN) incurred a setback, pausing its clinical trial for its vaccine candidate when a U.K. patient came down with a mysterious illness. Recently, giant Johnson & Johnson (NYSE:JNJ) also halted its trial due to a patient suffering an unexplained illness. Although I’m still bullish long term on JNJ, from a scientific and social perspective, these disappointments are not confidence inspiring.
To the chagrin of President Donald Trump, we will not have a vaccine ready before Election Day. Based on the latest developments, it’s probably safe to say that a viable solution won’t be available until sometime next year. Naturally, this has shifted the discussion once again to Covid-19 therapeutics, which benefits the case to invest in Cytonics stock.
Although it’s a new approach (from what I understand), Cytonics’ medical innovation that primarily helps osteoarthritis patients could also end up helping those infected with the coronavirus. And this therapeutic approach got a big boost in coverage due to Trump’s own battle with Covid-19.
But just how effective will this pivot be? To better gauge this proposition, let’s first get a quick background on what Cytonics stock is all about.
Cytonics Stock Is an Investment in a ‘Super’ Protein
At the heart of this biotechnology story is alpha-2-macroglobulin (A2M), which is a plasma protein found in the blood and is mainly produced by the liver. Over the years, medical research has discovered that A2M has a unique structure that is able to link to (or inhibit) proteases.
Now, proteases are enzymes that catalyze proteolysis, defined as the breakdown of proteins into smaller polypeptides or single amino acids. Unfortunately, proteases can do damage to parts of the body, such as joints. As Cytonics website points out, these degradative enzymes can destroy an arthritic joint. Thus, the company utilizes A2M to inhibit proteases, thereby promoting better health outcomes.
What makes A2M so effective is a key feature called a scissile peptide bond, which “attracts” for lack of a better word certain proteases. You can read more about scissile peptide bonds in this Nature.com article.
For our purposes, through the innovations of biotechnology, it’s possible to modify this bond to tailor for the proteases for which you wish the A2M protein to preferentially bind.
But that’s not all. The beauty of the argument to invest in Cytonics stock is CYT-108, an artificially engineered A2M protein. From my article about the biotech firm, I stated that “Cytonics believes that its synthetic version is more effective, perhaps between two to three times more effective than naturally occurring A2M.”
If this claim is true, it could potentially reverse the damage done by osteoarthritis, leading to a cure. Of course, this is just a possibility and I’m not suggesting whatsoever that this is the breakthrough that arthritic patients have been waiting for. However, the science is undoubtedly compelling.
And this ability to modulate the binding capabilities of A2M (or in this case CYT-108) could be the key to Cytonics’ Covid-19 therapeutic.
Could CYT-108 Knock Out Covid?
As you know, the basic premise of coronavirus infection is as follows: the SARS-CoV-2 virus enters a person’s cell, which catalyzes the creation of antigens (toxins or foreign substances). Naturally, this induces an immune response, which involves cytokine activity.
As Cancer.gov states, cytokines are part of a normal immune response. However, too much volume all at one time – otherwise known as a cytokine storm – could lead to severe symptoms. In the worst cases, cytokine storms are life threatening.
To understand the science behind Cytonics repurposing of CYT-108 for Covid-19, I reached out to the company. Unfortunately, I was not able to get a response before publication. Therefore, what I have to share with you is my best educated assumption. As such, I must stress that investors interested in Cytonics stock should perform their due diligence.
With that caveat out of the way, it’s possible that CYT-108 could be modified to bind to the antigens, acting as an inhibitor or suppressor. By lowering the amount of foreign substances in the body, this correlates to lower cytokine activity. Thus, the introduction of CYT-108 (in Covid-19 patients) could save the body from basically attacking itself.
Naturally, the question comes up, how does CYT-108 compare to some of the therapeutics that have been in the news, specifically Regeneron Pharmaceuticals’ (NASDAQ:REGN) REGN-COV2 and Gilead Sciences’ (NASDAQ:GILD) remdesivir?
From my research, information regarding CYT-108’s repurposing for Covid-19 is not available publicly. So, I would again be speculating here. That said, you can summarize REGN-COV2 and remdesivir as two non-competing therapeutics: the former is on a “seek and destroy” mission, while remdesivir is an inhibitor, which according to Stanford Medicine disrupts the RNA replication process of SARS-CoV-2.
From what I personally gather, Trump’s medical team gave him the two therapeutics as a dual-stage strategy: REGN-COV2 to “kill the viral load,” and remdesivir to suppress viral replication of any viruses remaining in the president’s cells.
As I mentioned earlier, I would need more information to better ascertain how CYT-108 relates to these therapeutics. But from my speculation, it appears that CYT-108 utilizes a suppression methodology similar (in principle) to remdesivir to attack SARS-CoV-2. However, remdesivir may be a vital component to any frontline therapeutic as it disrupts or scrambles the viral replication process.
Therefore, it’s probably best to think of CYT-108 as a complement to the treatment options available rather than a competitor.
Benefits and Risks of Using Modified A2M
By no means is this meant to be a conclusive discussion on why you should invest in Cytonics stock. As I’ve repeatedly mentioned, all equity crowdfunding opportunities are inherently risky. And Cytonics approach to Covid-19 is no different.
However, I’d like to lay out the scientific benefits and risks of using modified A2M to create a novel approach to the novel coronavirus. Obviously, because A2M is a naturally occurring protein, CYT-108 can “mask” itself. In other words, it’s less likely for the body to reject it.
You don’t have to be a scientist to understand the huge implications of this one fact. As I demonstrated above, we’ve seen many vaccines succumb to hiccups during clinical trials. Plus, the New York Times reported that Eli Lilly (NYSE:LLY) had to pause its trial for its therapeutic due to a “potential safety concern.”
Worryingly for many observers, Eli Lilly’s antibody cocktail is similar to Regeneron’s REGN-COV2. Logically, this raises questions about whether these two therapeutics will be approved for distribution to the public. Cynically, what’s bad news for other biotechs may be good news for Cytonics stock.
However, that doesn’t mean that Cytonics is in the clear. Far from it. One of the risks that CYT-108 could incur is that it inhibits proteases indiscriminately. It’s very important to note that not all proteases are harmful for the body. Indeed, some proteases are good for us.
Therefore, you can bet your bottom dollar that safety tests will be a huge factor for CYT-108. Given the setbacks of others, you don’t want to be cocky with your approach on Cytonics stock.
A Shrewd Business Move in the Making
Having analyzed the risk-reward narrative as it relates to CYT-108 and Covid-19, I can’t help but feel that Cytonics is incredibly confident in its modified A2M. By exposing CYT-108 to a new purpose, the company would suffer bad PR if the protein harmed study participants.
On the flip side, if CYT-108 is proven safe, that would result in renewed interest toward this equity crowdfunding opportunity. Of course, you don’t want to read too much into this possible business maneuvering. But so far, this is an impressive organization that is forwarding groundbreaking scientific innovations. It’s definitely a name to watch.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks