Late-stage biotechnology company developing innovative treatments for multiple therapeutic indications, CytoDyn (OTCMKTS:CYDY), on August 2, 2021 announced that director nominations done by activist group led by Bruce Patterson and Paul Rosenbaum were invalid. The Rosenbaum/Patterson Group made efforts for nominating five director candidates for taking control of the firm’s Board of Directors.
The company’s bylaws include standard “advance notice bylaw” for shareholder protection, requiring some disclosures by nominating shareholders for providing necessary transparency for making informed decisions. The Notice Letter did not comply with the firm’s bylaws as it had more than 50 deficiencies, demonstrating lack of understanding of corporate governance
CytoDyn is using leronlimab, a novel humanized monoclonal antibody targeting the CCR5 receptor for treating ailments. Mr Rosenbaum has been handed over a letter stating the deficiencies filed on Form 8-K with the Securities and Exchange Commission.
The Notice Letter said that Patterson hasn’t taken any company shares in two years, which is untrue. It also did not disclose all members of the Group as well as its funding. It did not note that Bruce Patterson, CEO of IncellDX, had proposed CytoDyn acquire the firm for $350 million in cash and stock but was rejected by the company.
The Group had given notice on July 1, 2021, final day before deadline. CytoDyn said that it is open for constructive engagement with shareholders. The Board will give director candidates for 2021 annual meeting of shareholders, to be held on October 28, 2021.
CYDY stock fell 10% to $1.52 in the morning session on Monday.