CytRx reports $4.4 million net loss for third quarter 2010

Nov 8 2010

CytRx Corporation (NASDAQ: CYTR), a biopharmaceutical company specializing in oncology, today reported financial results for the three months and nine months ended September 30, 2010, and provided a business update. The Company also announced the filing of a shelf registration statement with the Securities and Exchange Commission to replace its existing shelf registration, which expires in December 2010.

"We are firmly focused on advancing development of our highly promising oncology portfolio," said Steven A. Kriegsman, CytRx President and CEO. "In September we began enrolling patients in our PROACT Phase 2 proof-of-concept prostate cancer clinical trial - our second clinical trial evaluating the efficacy and safety of bafetinib in patients with advanced cancers. We continue recruiting patients in our ENABLE clinical trial in patients with a late-stage form of leukemia known as high-risk B-cell chronic lymphocytic leukemia or B-CLL.

"Last week we were awarded a nontaxable, non-dilutive grant of approximately $735,000 related to our INNO-206, tamibarotene and bafetinib programs under the Qualifying Therapeutic Discovery Project Program. We believe this grant serves as further validation of the potential of our oncology portfolio, with each compound designed to have advantages over currently marketed oncology drugs. We will receive $635,000 of the grant this year and the remaining $100,000 in 2011.

"We also replaced our shelf registration filing with the SEC. Having a current shelf registration provides us with flexibility in considering future financing alternatives and makes sense from a strategic standpoint, although we have no immediate plans to use this registration statement. As we reported in our quarterly report for the third quarter, we believe that our current cash on hand, together with our marketable securities and proceeds from possible future sales of our shares of RXi Pharmaceuticals (Nasdaq: RXII), will be sufficient to fund our operations for the foreseeable future," he added.

Third Quarter Financial Results

CytRx reported a net loss for the three months ended September 30, 2010 of $4.4 million, or $0.04 per share, based on 109.1 million weighted average shares outstanding. The Company reported comprehensive income of $3.6 million, which reflected an unrealized gain on available-for-sale securities of RXi. The Company reported net income applicable to common stockholders for the three months ended September 30, 2009 of $3.9 million, or $0.04 per diluted share based on 105.8 million diluted weighted average shares outstanding. Net income for the third quarter of 2009 reflected the recognition of $6.7 million in service revenue from the ALS Charitable Remainder Trust, or ALSCRT, and the gain on sale of RXi shares of $1.2 million.

Research and development (R&D) expenses were $2.8 million for the three months ended September 30, 2010, compared with $1.2 million for the three months ended September 30, 2009. The increase in R&D expenses was due to the ramp up of the Company's oncology clinical trials. R&D expenses for the third quarter of 2010 related to various development programs, including development costs of $0.5 million for the INNO-206 program, $1.4 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 $1.8 million for the third quarter of 2010, compared with $2.6 million for the third quarter of 2009. Lower G&A expenses for the third quarter of 2010 were due to a decrease in stock option expense.

In the third quarter of 2009, the Company recognized an impairment loss of $1.2 million resulting from the write-down of laboratory equipment available for sale.

CytRx reported cash, cash equivalents and marketable securities totaling $30.8 million as of September 30, 2010, compared with cash and cash equivalents of $32.6 as of December 31, 2009. CytRx's approximate 17% ownership stake in RXi Pharmaceutical (NASDAQ: RXII) as of September 30, 2010 had a market value of approximately $8.8 million.