Aug 9 2010
CytRx Corporation (NASDAQ: CYTR), a biopharmaceutical company specializing in oncology, today reported financial results for the three months and six months ended June 30, 2010 and provided a business update.
“The past several months have been truly exceptional with achievements that support our goal to become a major oncology company with billion-dollar revenue opportunities”
"The past several months have been truly exceptional with achievements that support our goal to become a major oncology company with billion-dollar revenue opportunities," said Steven A. Kriegsman, CytRx President and CEO. "It is highly gratifying that tamibarotene has helped eradicate advanced-stage acute promyelocytic leukemia (APL) in four patients, all of whom had failed multiple approved treatment therapies. These results provide encouraging news to clinicians in treating patients with refractory APL who faced few, if any, promising treatment options, and support our plan to evaluate the development of tamibarotene as a first-line treatment for APL and potentially for other deadly cancers with large market opportunities.
"In addition, we achieved a key corporate milestone by initiating enrollment in our ENABLE clinical trial, which is evaluating the efficacy and safety of bafetinib in high-risk b-cell chronic lymphocytic leukemia (B-CLL). Importantly, the recent grant of a key U.S. patent encompassing claims related to bafetinibs' pharmaceutical compound and composition in all indications with coverage to the year 2025 provides the foundation for our strategy to assess the therapeutic value of this dual kinase inhibitor in multiple cancers.
"We have a highly ambitious agenda for the remainder of 2010 with plans to initiate several additional Phase 2 proof-of-concept oncology trials in diverse advanced-stage cancers. Preparations are underway to begin our PROACT clinical trial to evaluate bafetinib in advanced prostate cancer and we are actively taking steps to begin testing bafetinib as a treatment for brain cancer. In addition, we continue to make progress on our plans to enter proof-of-concept clinical trials with our doxorubicin prodrug INNO-206 in advanced-stage pancreatic cancer, gastric cancer and soft tissue sarcoma," he added.
Second Quarter Financial Results
CytRx reported net income for the three months ended June 30, 2010 of $1.3 million, or $0.01 per diluted share, based on 111.6 million weighted average shares outstanding. Net income included a $5.0 million gain on the sale of RXi Pharmaceuticals Corporation (RXi) common shares and a $1.3 million gain on marked-to-market warrant liabilities. The Company reported other comprehensive income of $8.0 million for an unrealized gain on available-for-sale securities of RXi Pharmaceuticals (Nasdaq:RXII), bringing total comprehensive income for the second quarter of 2010 to $9.3 million, This compares with a net loss for the three months ended June 30, 2009 of $2.2 million, or $0.02 per share, based on 93.3 million weighted average shares outstanding. The increase in weighted average shares outstanding was primarily due to the completion of a registered direct offering of $18.3 million, net of fees and expenses, in July 2009.
CytRx did not recognize revenue for the second quarter of 2010. The Company reported revenue of $1.0 million for the second quarter of 2009, which consisted 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 $3.1 million for the three months ended June 30, 2010, compared with $1.4 million for the three months ended June 30, 2009. R&D expense for the second quarter of 2010 related to various development programs, including development costs of $0.9 million for the INNO-206 program, $1.2 million for the bafetinib program and $0.3 million for the tamibarotene program, with the remainder primarily related to R&D support costs.
General and administrative (G&A) expenses were $2.1 million for the second quarters of 2010, compared with $1.9 million for the second quarter of 2009. G&A expenses for both periods included all administrative salaries and other general corporate expenses.
CytRx reported cash, cash equivalents and marketable securities totaling $33.5 million as of June 30, 2010, which included $5.0 million from the sale of 2.0 million shares of RXi common stock. The Company reported cash and cash equivalents of $32.6 as of December 31, 2009. CytRx's approximate 17% ownership stake in RXi as of June 30, 2010 had a market value of approximately $8.0 million.
The Company's management reported that it believes that CytRx's current cash on hand, together with its marketable securities and proceeds from possible future sales of RXi shares, will be sufficient to fund its operations for the foreseeable future.
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