![(CytRx Corporation Logo)](https://capedge.com/proxy/8-K/0000950129-05-008260/v11760v1176000.gif)
For Additional Information: | ||
CytRx Corporation: | Lippert/Heilshorn & Associates | |
Ed Umali | Investor Contact: | |
Director of Corporate Communications | Jody Cain (jcain@lhai.com) | |
(310) 826-5648, ext. 309 | Mariann Ohanesian (mohanesian@lhai.com) | |
eumali@cytrx.com | Media Contact: | |
Mark Stuart (mstuart@lhai.com) | ||
(310) 691-7100 |
CYTRX CORPORATION REPORTS SECOND QUARTER FINANCIAL RESULTS
LOS ANGELES (August 15, 2005) – CytRx Corporation (Nasdaq: CYTR),a biopharmaceutical company engaged in the development and commercialization of human therapeutics primarily in the area of small molecules and ribonucleic acid interference (RNAi), today reported financial results for the quarter ended June 30, 2005.
“We are fully committed to the clinical development of our oral drug candidate arimoclomol as a treatment for those suffering from the debilitating and life threatening consequences of ALS, also known as Lou Gehrig’s disease. We were pleased to have filed our investigational new drug (IND) application with the U.S. Food and Drug Administration (FDA) in May and we view the subsequent placement of this trial on clinical hold as only a delay as we provide additional information to the FDA. Our focus is squarely on providing a prompt, yet comprehensive response to the FDA’s information request,” said CytRx President and CEO Steven A. Kriegsman.
“While preparing our response to the FDA, which we expect to submit within the coming weeks, we are simultaneously undertaking steps necessary in preparation for entering the clinic with the goal of beginning this trial as soon as possible,” he added. “Our expectation is for trial initiation this year, and possibly even later in the current quarter.”
Review of Financial Results
For the second quarter of 2005, CytRx reported a net loss of $4.5 million, or $0.08 per share, compared with a net loss of $4.1 million, or $0.12 per share, for the comparable period in 2004. For the six months ended June 30, 2005, CytRx reported a net loss of $8.0 million, or $0.14 per share, compared with a net loss of $7.8 million, or $0.23 per share, for the six months ended June 30, 2004.
For the second quarter of 2005, CytRx reported a net loss of $4.5 million, or $0.08 per share, compared with a net loss of $4.1 million, or $0.12 per share, for the comparable period in 2004. For the six months ended June 30, 2005, CytRx reported a net loss of $8.0 million, or $0.14 per share, compared with a net loss of $7.8 million, or $0.23 per share, for the six months ended June 30, 2004.
Research and development (R&D) expenses were $2.9 million in the second quarter of 2005, compared with $1.4 million for the corresponding period in 2004. The increase during the second quarter of 2005 was due primarily to increased research and development
activities occurring at CytRx Laboratories and preparatory activities associated with our planned initiation of our Phase II clinical trial for arimoclomol.
General and administrative (G&A) expenses were $1.5 million for the second quarter of 2005 versus $2.6 million in the second quarter of 2004. The higher expenses incurred during the three month period ended June 30, 2004 primarily resulted from accounting fees associated with the Company’s change in auditors in 2004, severance payments to certain former executives, and legal fees related to both of the foregoing during those periods. During the second quarter of 2005, the Company expensed $77,000 of common stock, stock options and warrants for general and administrative services, compared with $375,000 for the corresponding period in 2004.
As of June 30, cash, cash equivalents and short-term investments totaled $15.8 million, compared with $3.0 million at December 31, 2004. The increase reflects completion of a private placement with net proceeds of $19.4 million in January 2005. Working capital was $13.4 million at June 30, 2005.
Recent Highlights
Updates on CytRx’s clinical program with arimoclomol for the treatment of ALS include:
Updates on CytRx’s clinical program with arimoclomol for the treatment of ALS include:
• | In May, CytRx filed an IND application with the FDA to initiate a Phase II clinical trial for arimoclomol for the treatment of ALS. | |
• | In June, CytRx responded to an FDA request for additional information regarding arimoclomol. | |
• | In July, the FDA announced the placement of a clinical hold on the Phase II trial pending review of additional information. |
Other corporate announcements include:
• | Release by the Massachusetts State Ethics Commission from a preliminary conflict of interest inquiry without a finding of any wrongdoing based on the Company’s retention of a consultant who had introduced the Company to UMMS. CytRx has a strategic relationship with UMMS. | |
• | Management presentations at the UBS 2005 Global Pharmaceuticals Conference and the Rodman & Renshaw 2nd Annual Healthcare Conference, both held in May. |
About CytRx Corporation
CytRx Corporation is a biopharmaceutical research and development company engaged in the development of products, primarily in the area of small molecules and ribonucleic acid interference (RNAi), in a variety of therapeutic categories. The Company owns three clinical-stage compounds based on its small molecule molecular “chaperone” co-induction technology, as well as a targeted library of 500 small molecule drug candidates that may be used to screen for new drug candidates. The Company expects to enter a Phase II clinical trial with its lead orally-administered small molecule drug candidate, arimoclomol, for the treatment of ALS (Lou Gehrig’s disease). CytRx also has a broad-based strategic alliance with the University of Massachusetts Medical School (UMMS) to develop novel compounds in the areas of ALS, obesity, type 2 diabetes and cytomegalovirus (CMV) using RNAi
CytRx Corporation is a biopharmaceutical research and development company engaged in the development of products, primarily in the area of small molecules and ribonucleic acid interference (RNAi), in a variety of therapeutic categories. The Company owns three clinical-stage compounds based on its small molecule molecular “chaperone” co-induction technology, as well as a targeted library of 500 small molecule drug candidates that may be used to screen for new drug candidates. The Company expects to enter a Phase II clinical trial with its lead orally-administered small molecule drug candidate, arimoclomol, for the treatment of ALS (Lou Gehrig’s disease). CytRx also has a broad-based strategic alliance with the University of Massachusetts Medical School (UMMS) to develop novel compounds in the areas of ALS, obesity, type 2 diabetes and cytomegalovirus (CMV) using RNAi
technology. CytRx also licensed from UMMS the rights to a DNA-based HIV vaccine technology currently in a Phase I clinical trial. The Company has a research program with Massachusetts General Hospital, Harvard University’s teaching hospital, to use RNAi technology to develop a drug for the treatment of ALS. For more information, visit CytRx’s Web site atwww.cytrx.com.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that 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 or uncertainties related to the early stage of CytRx’s diabetes, obesity, CMV and ALS research, the need for future clinical testing of any RNAi-based products and small molecules that may be developed by CytRx, uncertainties regarding the scope of the clinical testing that may be required by regulatory authorities for its molecular chaperone co-induction drug candidates and other products and the outcomes of those tests, the significant time and expense that will be incurred in developing any of the potential commercial applications for CytRx’s RNAi technology or small molecules, CytRx’s need for additional capital to fund its ongoing working capital needs, including ongoing research and development expenses related to its molecular chaperone co-induction drug candidates, risks relating to the enforceability of any patents covering CytRx’s products and to the possible infringement of third party patents by those products, and the impact of third party reimbursement policies on the use of and pricing for CytRx’s products. Additional uncertainties and risks are described in CytRx’s most recently filed SEC documents, such as its most recent annual report on Form 10-K, all quarterly reports on Form 10-Q and any current reports on Form 8-K filed since the date of the last Form 10-K. 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.
This press release may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that 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 or uncertainties related to the early stage of CytRx’s diabetes, obesity, CMV and ALS research, the need for future clinical testing of any RNAi-based products and small molecules that may be developed by CytRx, uncertainties regarding the scope of the clinical testing that may be required by regulatory authorities for its molecular chaperone co-induction drug candidates and other products and the outcomes of those tests, the significant time and expense that will be incurred in developing any of the potential commercial applications for CytRx’s RNAi technology or small molecules, CytRx’s need for additional capital to fund its ongoing working capital needs, including ongoing research and development expenses related to its molecular chaperone co-induction drug candidates, risks relating to the enforceability of any patents covering CytRx’s products and to the possible infringement of third party patents by those products, and the impact of third party reimbursement policies on the use of and pricing for CytRx’s products. Additional uncertainties and risks are described in CytRx’s most recently filed SEC documents, such as its most recent annual report on Form 10-K, all quarterly reports on Form 10-Q and any current reports on Form 8-K filed since the date of the last Form 10-K. 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.
[Tables to Follow]
CYTRX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenues: | ||||||||||||||||
License fees | $ | — | $ | 228,164 | $ | 1,500 | $ | 328,164 | ||||||||
Total Revenues | — | 228,164 | 1,500 | 328,164 | ||||||||||||
Expenses: | ||||||||||||||||
Research and development (includes $38,000 and $90,000 of non-cash stock-based expense for the three and six month periods ended June 30, 2005, respectively, and $167,000 and $1,294,000 of non-cash stock-based expense for the three and six month periods ended June 30, 2004, respectively) | 2,915,969 | 1,356,876 | 4,829,989 | 3,641,880 | ||||||||||||
Depreciation and amortization | 62,288 | 25,478 | 100,412 | 41,808 | ||||||||||||
Common stock, stock options and warrants issued for general and administrative services | 77,012 | 374,511 | 316,064 | 805,287 | ||||||||||||
Selling, general and administrative | 1,537,683 | 2,582,904 | 2,955,843 | 3,782,699 | ||||||||||||
4,592,952 | 4,339,769 | 8,202,308 | 8,271,674 | |||||||||||||
Loss before other income (expense) | (4,592,952 | ) | (4,111,605 | ) | (8,200,808 | ) | (7,943,510 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income | 41,066 | 16,447 | 83,730 | 39,753 | ||||||||||||
Minority interest in losses of subsidiary | 42,753 | 34,329 | 81,452 | 69,257 | ||||||||||||
Net loss | $ | (4,509,133 | ) | $ | (4,060,829 | ) | $ | (8,035,626 | ) | $ | (7,834,500 | ) | ||||
Basic and diluted: | ||||||||||||||||
Loss per common share | $ | (0.08 | ) | $ | (0.12 | ) | $ | (0.14 | ) | $ | (0.23 | ) | ||||
Weighted average shares outstanding | 57,542,340 | 34,954,360 | 55,509,421 | 34,641,735 | ||||||||||||
CYTRX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and short-term investments | $ | 15,772,758 | $ | 2,999,409 | ||||
Prepaid and other current assets | 419,073 | 956,146 | ||||||
Total current assets | 16,191,831 | 3,955,555 | ||||||
Property and equipment, net | 411,493 | 447,579 | ||||||
Molecular library, net | 417,730 | 447,567 | ||||||
Goodwill | 183,780 | — | ||||||
Prepaid insurance and other assets | 147,326 | 198,055 | ||||||
Total assets | $ | 17,352,160 | $ | 5,048,756 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 410,477 | $ | 1,661,104 | ||||
Accrued expenses and other current liabilities. | 2,379,688 | 1,074,146 | ||||||
Total current liabilities | 2,790,165 | 2,735,250 | ||||||
Accrued loss on facility abandonment | 154,033 | 206,833 | ||||||
Deferred gain on sale of building | 51,948 | 65,910 | ||||||
Deferred revenue | 275,000 | 275,000 | ||||||
Total liabilities | 3,271,146 | 3,282,993 | ||||||
Minority interest in subsidiary | — | 170,671 | ||||||
Commitments and contingencies | — | — | ||||||
Stockholders’ equity: | ||||||||
Preferred Stock, $.01 par value, 5,000,000 shares authorized, including 5,000 shares of Series A Junior Participating Preferred Stock; no shares issued and outstanding | — | — | ||||||
Common stock, $.001 par value, 100,000,000 shares authorized; 58,824,000 and 40,190,000 shares issued at June 30, 2005 and December 31, 2004, respectively | 58,824 | 40,190 | ||||||
Additional paid-in capital | 130,531,241 | 110,028,327 | ||||||
Treasury stock, at cost (633,816 shares held at June 30, 2005 and December 31, 2004) | (2,279,238 | ) | (2,279,238 | ) | ||||
Accumulated deficit | (114,229,813 | ) | (106,194,187 | ) | ||||
Total stockholders’ equity | 14,399,514 | 1,595,092 | ||||||
Total liabilities and stockholders’ equity. | $ | 17,352,160 | $ | 5,048,756 | ||||
###