CytRx plans five Phase 2 clinical trials with oncology drug candidates

Mar 15 2010

CytRx Corporation (NASDAQ:CYTR), a biopharmaceutical company specializing in oncology, today reported financial results for the twelve months ended December 31, 2009, and affirmed its 2010 milestones of commencing up to five Phase 2 clinical trials with its oncology drug candidates.

“Given the potential of our diverse oncology portfolio and strength of our corporate infrastructure, we are highly optimistic about reaching our near-term prospects as well as our longer-term goal of building CytRx into a major oncology company”

“Our ability to achieve our many milestones last year advanced CytRx into a full-fledged oncology company,” said Steven A. Kriegsman, CytRx President and CEO. “This year we have set a very aggressive clinical and regulatory agenda that reflects our clear focus on rapidly commercializing our oncology drug portfolio. We plan to initiate three Phase 2 proof-of-concept clinical trials with INNO-206 and two additional Phase 2 proof-of-concept clinical trials with bafetinib, while continuing to execute our development plans for tamibarotene as a treatment for acute promyelocytic leukemia (APL).

“Given the potential of our diverse oncology portfolio and strength of our corporate infrastructure, we are highly optimistic about reaching our near-term prospects as well as our longer-term goal of building CytRx into a major oncology company,” he added. “Our drug candidates, which offer advantages over currently marketed drugs, are based on known mechanisms of action, which can minimize development risk. Our clinical strategy calls for trials to be conducted in patients with advanced-stage cancers, allowing for more rapid assessment of efficacy data, and we expect substantial progress toward proof-of-concept in multiple clinical trials by late this year and next year as well. Additionally, our oncology portfolio could address multiple cancers, several of which have blockbuster potential with revenue opportunities exceeding $2 billion. We have a highly experienced team with extensive expertise to advance this agenda and believe that our current cash resources, including our holdings in RXi Pharmaceuticals, Inc. (Nasdaq:RXII) will be sufficient to fund our operations for the foreseeable future.”

CytRx’s expected 2010 clinical milestones include:

“We plan to take aggressive steps to further develop our promising molecular chaperone portfolio, including clinical-stage arimoclomol and iroxanadine, which target diabetic complications and neurodegenerative diseases and disorders. We are considering partnership opportunities, as well as a spinout similar to our successful transaction with RXi,” said Mr. Kriegsman.

Review of Financial Results

CytRx reported a net loss attributable to CytRx common stockholders for the twelve months ended December 31, 2009 of $4.8 million, or $0.05 per share, based on 100.0 million weighted average shares outstanding. This compares with a net loss attributable to CytRx common stockholders for the twelve months ended December 31, 2008 of $27.8 million, or $0.30 per share, based on 91.4 million weighted average shares outstanding. The increase in weighted average shares outstanding for 2009 was primarily due to the completion of a registered direct offering totaling $18.3 million, net of fees and expenses, in July 2009. The net loss for fiscal 2008 included charges of approximately $8.0 million related to in-process research and development resulting from the Company's acquisition of Innovive Pharmaceuticals, Inc. in September 2008.

Revenue for 2009 was $9.5 million, compared with revenue of $6.3 million for 2008, with revenue for both years consisting primarily of service revenue recognized from CytRx's 2006 $24.3 million royalty transaction with the ALS Charitable Remainder Trust or ALSCRT. Pursuant to an amendment signed between CytRx and the beneficiary of the ALSCRT in August 2009, the Company recognized the remaining revenue from this transaction as service revenue in the third quarter of 2009.

Research and development (R&D) expenses were $7.5 million for the twelve months ended December 2009, compared with $10.5 million for the twelve months ended December 2008. In 2009 the Company substantially completed the initial phase of its new-drug discovery research in its laboratory facility in San Diego, which accounted for the significant decrease in R&D expenses in 2009 compared with 2008. R&D expenses in 2009 related primarily to the Company’s various research and development programs and included development costs of $0.8 million for the INNO-206 program, $0.3 million for the bafetinib program, $0.8 million for the tamibarotene program and $0.4 million for activities related to arimoclomol. In 2009 the Company also recognized an impairment loss of $1.2 million, included in research and development expense, resulting from the write-down of laboratory equipment which is classified as assets held for sale as of December 31, 2009. R&D expenses incurred during 2008 were related primarily to the Company's various research and development programs and included two months of RXi-related expenses.

General and administrative (G&A) expenses were $9.1 million for 2009, compared with $10.9 million for 2008. G&A expenses for 2009 decreased compared to 2008, due in part to $1.3 million in G&A expenses for two months of RXi-related expenses that were included for 2008. There were no RXi-related expenses included for 2009. G&A expenses in 2009 also decreased from 2008 due to a $0.6 million decrease in legal and accounting/auditing, with higher expenses in 2008 related to the spin-off of RXi, and the acquisition of Innovive in September of that year. G&A expenses included employee stock option expense of $1.6 million for both 2009 and 2008.

Cash and cash equivalents and marketable securities totaled $32.6 million as of December 31, 2009, including proceeds of $18.3 million, net of fees and expenses, from a registered direct offering completed in July 2009, and proceeds of $1.2 million, net of fees, from the sale of 500,000 shares of common stock of RXi in September 2009. CytRx's ownership stake in RXi as of December 31, 2009 had a market value of approximately $26.4 million.