News Release
CytRx Reports Second Quarter 2012 Financial Results

Achieves multiple milestones in the clinical development of leading oncology assets aldoxorubicin and tamibarotene

LOS ANGELES--(BUSINESS WIRE)--Aug. 9, 2012-- CytRx Corporation (NASDAQ: CYTR), a biopharmaceutical company specializing in oncology, today reported financial results for the three months and six months ended June 30, 2012, and provided a business update.

“This is an incredibly exciting time at CytRx with many recent developments that are advancing our clinical programs,” said President and Chief Executive Officer Steven A. Kriegsman. “Importantly, we reported positive data at the ASCO conference in June from a Phase 1b/2 clinical trial with our doxorubicin tumor-targeting conjugate aldoxorubicin (formerly INNO-206) in patients with advanced soft tissue sarcomas. As the next step in this program, we plan to meet with the FDA later this year to discuss a potential Phase 3 pivotal trial with aldoxorubicin as a therapy for patients with soft tissue sarcomas whose tumors have progressed following treatment with chemotherapy.

“We are delighted that the investment community has taken notice of our many accomplishments as reflected in our higher market capitalization.”

CytRx Recent Highlights

Aldoxorubicin (INNO-206)

  • In July – initiated a Phase 1b clinical trial with a combination of aldoxorubicin and free doxorubicin in patients with solid tumors who had failed other therapies. The trial is being conducted under the direction of Sant P. Chawla, M.D., F.R.A.C.P., Director of the Sarcoma Oncology Center in Santa Monica, California. Studies in animal models of human tumors showed favorable results from this combination in ovarian and pancreatic cancers.
  • In July – received a key patent issuance providing significant intellectual property protection in the European Union for the INNO-206 linker technology, similar to the U.S. patent announced in April 2012. CytRx holds exclusive worldwide rights to this platform technology with proven affinity to couple with certain classes of chemotherapeutic agents beyond doxorubicin, making it essentially a product pipeline with blockbuster potential.
  • In June – announced results from the Phase 1b/2 trial with aldoxorubicin that showed clinical benefit of more than four months in 77% of evaluable advanced soft tissue sarcoma patients who had been treated with drug at the maximum tolerated dose.
  • In May – announced the publication in the peer-reviewed journal Clinical Cancer Research of animal and in vitro studies that showed aldoxorubicin produced anti-multiple myeloma effects with less toxicity than free doxorubicin. The study was conducted under the direction of Dr. James R. Berenson at the Institute for Myeloma & Bone Center Research.

Tamibarotene

  • In July – received a notice of allowance for a patent application that strengthens the overall intellectual property for tamibarotene with claims covering a pharmaceutical composition of the potent, orally available synthetic retinoid compound in capsule form. CytRx holds the North American and European rights to certain tamibarotene intellectual property for the treatment of non-small-cell lung cancer (NSCLC) and acute promyelocytic leukemia (APL), and retains an option to expand its licenses for the use of tamibarotene in other fields in oncology.
  • In June – reached a major milestone in the Phase 2b global clinical trial with tamibarotene as a first-line treatment for NSCLC with the Independent Data Safety Monitoring Board’s recommendation to move forward with the trial following a detailed review of safety data.

Corporate Developments

  • In June – regained compliance with NASDAQ listing requirements.
  • In June – added to the Russell Microcap Index, which is widely used by investment managers and institutional investors in their investments decisions.

Second Quarter 2012 Financial Results

CytRx reported a net loss for the quarter ended June 30, 2012 of $13.3 million, or $0.63 per share. The Company’s net loss for the quarter was substantially impacted by an increase in the Company’s stock price, which resulted in an $8.5 million increase in the Company’s warrant derivative liabilities. Excluding that non-cash loss on warrant derivative liabilities, CytRx reported a net loss for the quarter of $4.7 million. This compares with a net loss of $3.1 million, or $0.20 per share, for the quarter ended June 30, 2011, which included a recognized non-cash gain of $0.6 million resulting from the change in value of warrant derivative liability. The Company reported no revenue for the second quarter of 2012, which compares with $150,000 in revenue for the second quarter of 2011.

Research and development (R&D) expenses were $2.7 million for the second quarter of 2012, which included $1.2 million in development expenses for the aldoxorubicin, $0.6 million in expenses for tamibarotene and $0.1 million in expenses for bafetinib. R&D expenses for the second quarter of 2012 increased from the second quarter of 2011, due primarily to higher costs associated with the clinical development of aldoxorubicin.

General and administrative (G&A) expenses were $2.1 million and $2.0 million for the second quarters of 2012 and 2011, respectively. G&A expenses for the second quarter of 2012 included $0.4 million of non-cash stock-compensation expense in both respective quarters.

CytRx reported cash, cash equivalents and marketable securities of $26.9 million as of June 30, 2012, compared with $36.0 million as of December 31, 2011. Total outstanding shares of 21.3 million as of June 30, 2012 reflected the 1-for-7 reverse stock split instituted in May 2012.

About CytRx Corporation

CytRx Corporation is a biopharmaceutical research and development company specializing in oncology. The CytRx oncology pipeline includes two programs in clinical development for cancer indications: aldoxorubicin (formerly known as INNO-206) and tamibarotene. With its tumor-targeted doxorubicin conjugate aldoxorubicin, CytRx has initiated an international Phase 2b clinical trial as a treatment for soft tissue sarcomas, has completed its Phase 1b/2 clinical trial primarily in the same indication, recently initiated both a Phase 2 trial for patients with advanced pancreatic ductal adenocarcinomas and a Phase 1b study of aldoxorubicin in combination with doxorubicin in patients with advanced solid tumors, and plans to meet with the FDA in the second half of 2012 to discuss a potential Phase 3 pivotal trial as a therapy for patients with soft tissue sarcomas whose tumors have progressed following treatment with chemotherapy. Tamibarotene is being tested in a double-blind, placebo-controlled, international Phase 2b clinical trial in patients with non-small-cell lung cancer, and is in a Phase 2 clinical trial as a treatment for acute promyelocytic leukemia (APL). The Company completed its evaluation of a third drug candidate, bafetinib, in the ENABLE Phase 2 clinical trial in high-risk B-cell chronic lymphocytic leukemia (B-CLL), and plans to seek a partner for further development of bafetinib. For more information about the Company, visit www.cytrx.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks relating to the outcome, timing and results of CytRx's clinical trials, including the international Phase 2b clinical trial with aldoxorubicin in patients with soft tissue sarcomas, the Phase 1b study of aldoxorubicin in combination with doxorubicin in patients with advanced solid tumors, the Phase 2 clinical trial with aldoxorubicin in patients with pancreatic cancer and the international Phase 2b clinical trial with tamibarotene in patients with non-small-cell lung cancer, risks related to the ability to obtain regulatory approval for any future clinical testing of aldoxorubicin or tamibarotene, uncertainties regarding whether CytRx will be permitted to conduct a Phase 3 clinical trial aldoxorubicin as a treatment for STS, the scope of clinical testing that may be required by regulatory authorities and the timing and outcome of further clinical trials, the risk that any future human testing of aldoxorubicin, tamibarotene or bafetinib might not produce results similar to those seen in past human or animal testing, risks related to CytRx's ability to manufacture its drug candidates in a timely fashion, cost-effectively or in commercial quantities in compliance with stringent regulatory requirements, risks related to CytRx's need for additional capital or strategic partnerships to fund its ongoing working capital needs and development efforts, including any future clinical development of aldoxorubicin, tamibarotene or bafetinib, and the risks and uncertainties described in the most recent annual and quarterly reports filed by CytRx with the Securities and Exchange Commission and current reports filed since the date of CytRx's most recent annual report. All forward-looking statements are based upon information available to CytRx on the date the statements are first published. CytRx undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

       
 

CYTRX CORPORATION

CONDENSED BALANCE SHEETS

(Unaudited)

 

June 30, 2012

December 31, 2011

ASSETS
Current assets:
Cash and cash equivalents $ 11,859,009 $ 17,988,590
Marketable securities 15,067,770 18,057,672
Receivable 20,758 175,704
Interest receivable 22,171 41,275
Prepaid expenses and other current assets   918,821     1,017,799  
Total current assets 27,888,529 37,281,040
Equipment and furnishings, net 321,102 266,335
Goodwill 183,780 183,780
Other assets   119,921     123,268  
Total assets $ 28,513,332   $ 37,854,423  
LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Accounts payable $ 2,232,148 $ 2,074,463
Accrued expenses and other current liabilities 5,403,039 4,786,956
Warrant liabilities   19,155,292     6,738,934  
Total current liabilities   26,790,479     13,600,353  
Stockholders’ equity (2011 restated to reflect a 7-1 reverse common stock split, see Note 1):
Preferred Stock, $.01 par value, 5,000,000 shares authorized, including 25,000 shares of Series A Junior Participating Preferred Stock; no shares issued and outstanding
Common stock, $.001 par value, 250,000,000 shares authorized; 21,296,913 shares issued and outstanding at June 30, 2012 and 21,294,413 shares issued and outstanding at December 31, 2011 21,296 21,294
Additional paid-in capital 238,318,443 237,452,308
Treasury stock, at cost (90,546 shares) (2,279,238 ) (2,279,238 )
Accumulated deficit   (234,337,648 )   (210,940,294 )
Total stockholders’ equity   1,722,853     24,254,070  
Total liabilities and stockholders’ equity $ 28,513,332   $ 37,854,423  
 
 
       
 

CYTRX CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 
 

Three Months Ended

June 30,

Six Months Ended

June 30,

2012

   

2011

2012

   

2011

Revenue:
License revenue $   $ 150,000   $   $ 150,000  

Expenses:

Research and development 2,686,465 1,886,652 7,087,980 6,707,360
General and administrative   2,091,856     2,026,602     4,006,572     4,174,061  
  4,778,321     3,913,254     11,094,552     10,881,421  
 
Loss before other income (expense) (4,778,321 ) (3,763,254 ) (11,094,552 ) (10,731,421 )
Other income (expense):
Interest income 27,547 50,270 63,005 105,699
Other income, net 16,491 15,619 50,551 52,650
Loss (gain) on warrant derivative liability   (8,528,192 )   577,290     (12,416,358 )   1,177,762  
Loss before provision for income taxes (13,262,475 ) (3,120,075 ) (23,397,354 ) (9,395,310 )
Provision for income taxes                
Net loss $ (13,262,475 ) $ (3,120,075 ) $ (23,397,354 ) $ (9,395,310 )
 
Other comprehensive income (net of tax)
Unrealized gain on available-for-sale securities       379,260         379,260  
 
Comprehensive loss $ (13,262,475 ) $ (2,740,815 ) $ (23,397,354 ) $ (9,016,050 )
 
Basic and diluted net loss per share $ (0.63 ) $ (0.20 ) $ (1.10 ) $ (0.60 )
 
Basic and diluted weighted-average shares outstanding   21,204,499     15,603,867     21,203,754     15,603,812  
 

Source: CytRx Corporation

Investor Relations:
Legend Securities, Inc.
Thomas Wagner
800-385-5790 x152
718-233-2600 x152
twagner@legendsecuritiesinc.com