CytRx reports $6.3 million net loss for first quarter 2011

CytRx Corporation (Nasdaq:CYTR), a biopharmaceutical company specializing in oncology, today reported financial results for the three months ended March 31, 2011, and provided a business update.

“Our ability to rapidly produce preliminary efficacy and safety data reflects solid execution on a strategy to quickly and cost-effectively move our oncology portfolio toward commercialization, with the goals of providing effective treatment options for patients suffering with cancers and enhancing value for our shareholders.”

"This is a highly eventful time at CytRx as we currently have seven clinical trials underway or expected to begin soon with our oncology portfolio. We are very excited about our plans to report preliminary clinical data from our Phase 2 proof-of-concept clinical trial in high-risk B-cell chronic lymphocytic leukemia (B-CLL) in the near-term," said Steven A. Kriegsman, CytRx President and CEO. "Our ability to rapidly produce preliminary efficacy and safety data reflects solid execution on a strategy to quickly and cost-effectively move our oncology portfolio toward commercialization, with the goals of providing effective treatment options for patients suffering with cancers and enhancing value for our shareholders.

"Among our recent highlights, we commenced a dose escalation trial with our tumor-targeting pro-drug candidate INNO-206 in patients with advanced solid tumors who have failed standard therapies. Data from this trial is expected to support our planned move in the second half of this year into a Phase 2 clinical trial in patients suffering from soft tissue sarcomas," he added. "Additionally, just last week we announced receipt of orphan drug designation for INNO-206 in pancreatic cancer and are now making arrangements to support third-party development for this deadliest of all cancers. With tamibarotene, we took measures to expedite enrollment in our Phase 2b clinical trial with this drug candidate as a first-line treatment for non-small-cell lung cancer by increasing our clinical sites to 15.

"We are in the highly advantageous position of having what we believe are sufficient capital resources to support our current operations and development programs for the foreseeable future, as we begin to produce important clinical data," added Mr. Kriegsman. "We reported more than $30 million in cash and cash equivalents at the first quarter close and have additional opportunities to boost our financial resources by monetizing our remaining non-oncology assets. Last month, we received 163,000 shares of common stock of ADVENTRX Pharmaceuticals (of which approximately 20% are being held in escrow) in exchange for our 19.1% stake in SynthRx. If all milestones under that agreement are achieved, we could receive up to 2.9 million additional shares of ADVENTRX." The last sale price of ADVENTRX (NYSE Amex: ANX) shares on the NYSE Amex on May 2, 2011 was $2.65.

First Quarter 2011 Financial Results

CytRx reported a net loss for the first quarter of 2011 of $6.3 million, or $0.06 per share, based on 109.2 million weighted average shares outstanding. The 2011 first quarter net loss included a recognized gain of $0.6 million resulting from the warrant derivative liabilities related to warrants issued in July 2009 being marked to market each quarter. The Company reported a net loss for the first quarter of 2010 of $0.6 million, or $0.01 per share, based on 108.9 million weighted average shares outstanding. The 2010 first quarter included a $3.8 million gain on the sales of shares of common stock in RXi Pharmaceuticals Corporation (Nasdaq:RXII) and $0.1 million on the valuation of warrant derivative liabilities related to warrants issued in July 2009. The Company's cash used in operating activities was approximately $3.7 million for the first quarter of 2011.

Research and development (R&D) expenses were $4.8 million for first quarter of 2011, compared with $2.0 million for first quarter of 2010. This increase resulted from the expansion of the Company's oncology clinical development programs. R&D expenses excluding stock option expense, non-cash expenses, and depreciation expense, were $4.7 million for the three-month period ended March 31, 2011, and included $1.1 million for the INNO-206 program, $0.1 million for the bafetinib program, $2.3 million for the tamibarotene program, with the remainder for general operation of clinical programs.

General and administrative (G&A) expenses were $2.0 million for the first quarter of 2011, compared with $2.6 million for the comparable period in 2010, and included $0.2 million of employee stock option expense. The reduction was due to a decrease in professional, legal and consulting fees.

CytRx reported cash, cash equivalents and marketable securities of $30.1 million as of March 31, 2011, compared with cash, cash equivalents and marketable securities, and proceeds from the sale of RXi, of $33.8 million as of December 31, 2010. On April 8, 2011, CytRx received approximately 163,000 shares of common stock of ADVENTRX Pharmaceuticals, Inc. (NYSE Amex: ANX) in exchange for its 19.1% ownership in SynthRx, Inc.