EXHIBIT 99.1
[CYTRX CORPORATION LOGO]
FOR ADDITIONAL INFORMATION:
CytRx Corporation:
Matthew Natalizio
Chief Financial Officer
310/826-5648
mnatalizio@cytrx.com
Investor Relations Group:
Jane Lin/John Nesbett
212/825-3210
CYTRX CORPORATION REPORTS THIRD QUARTER 2004 FINANCIAL RESULTS
Los Angeles, CA -- November 9, 2004 -- CytRx Corporation (Nasdaq: CYTR) today
reported its consolidated financial results for the quarter ended September 30,
2004.
CytRx Corporation (CytRx), a leader in small molecule drug development and RNA
interference (RNAi) technology, is focused on creating a significant and
sustainable product line to modify proteins responsible for ALS, obesity, type 2
diabetes, HIV, and cytomegalovirus.
Steven Kriegsman, CytRx's President and CEO, stated, "In the third quarter of
2004, we were very pleased to have been able to reduce our losses from the
previous quarter. We also, negotiated the acquisition of the clinical and
pharmaceutical assets of Biorex Research & Development RT., and a related
private placement of equity, both of which were consummated on October 4, 2004.
As a result of the Biorex transaction, CytRx has taken a step forward towards
our goal of becoming a major therapeutics company. The Biorex assets that we
acquired include compounds with the potential to enter Phase II trials for ALS,
type 2 diabetes and diabetic retinopathy, and we are expecting to enter the
clinic with a Phase II trial for ALS in the second quarter of 2005."
Revenues
For the three months ended September 30, 2004 and 2003, we did not earn any
revenues. For the nine months ended September 30, 2004, revenues were $0.3
million, which were generated from a licensing agreement with SynthRx, Inc. for
FLOCOR(TM) and other related technologies, while no revenues were reported for
the corresponding nine month period in 2003.
Net Loss
For the third quarter of 2004, we reported a net loss of $2.8 million or $0.08
per share, as compared to a net loss of $8.8 million or $0.30 per share for the
three months ended September 30, 2003. Included in the $8.8 million net loss for
2003 was a $6.0 million charge related to our write-off of an investment in an
unconsolidated subsidiary. There is no comparable expense in 2004. For the nine
months ended September 30, 2004, CytRx reported a net loss of $10.6 million or
$0.30 per share, versus a net loss of $14.7 million or $0.59 per share for the
comparable period of 2003.
Research and Development Expenses
Total research and development expenses were $1.3 million for the quarter ended
September 30, 2004 as compared with $1.5 million for the comparable period of
2003. For the nine months ended September 30, 2004, CytRx reported research and
development expenses of $5.0 million versus $3.7 million for the comparable nine
month period of 2003. The greater research and development expenses incurred in
the nine months ended September 30, 2004 resulted from the increased activities
at our subsidiary, CytRx Laboratories, on RNAi and small molecule drug research
and development.
General and Administrative Expenses
General and administrative expenses were $1.5 million for the quarter ended
September 30, 2004 as compared to $1.2 million for the prior period. For the
nine months ended September 30, 2004, general and administrative expenses were
$6.1 million versus $4.4 million for the comparable period in 2003. The higher
general and administrative expenses incurred during the nine months ended
September 30, 2004 were the result of higher accounting fees associated with our
change in auditors, severance payments to certain former executives, and legal
fees related to both of the foregoing.
Cash and Marketable Securities
At September 30, 2004, CytRx had total cash and short-term investments of $4.4
million and working capital of $2.9 million as compared to $11.6 million in cash
and short-term investment and $10.8 million as of December 31, 2003.
Third Quarter Highlights
- On October 4, 2004, CytRx Corporation acquired all of the
clinical and pharmaceutical assets and related intellectual
property of Hungary-based Biorex Research & Development RT.
(Biorex), a privately held biotechnology company focused on the
development of novel small molecules with broad therapeutic
applications in neurology, diabetes, and cardiology.
- In conjunction with the Biorex transaction, CytRx completed a
private placement of 4,000,000 shares of its common stock to
institutional investors, with gross proceeds of $4 million. The
company also issued warrants to purchase an additional 2,800,000
shares of common stock exercisable at an exercise price of $1.69
per share for a period of five years.
- Advanced Bioscience Laboratories (ABL) and the University of
Massachusetts Medical School (UMMS) investigators are enrolling
and inoculating the final cohort of volunteers in the Phase I
trial for the HIV vaccine developed by UMMS and ABL and funded
by an approximately $16.0 million grant from the National
Institute of Allergy and Infectious Diseases (NIAID), part of
the National Institutes of Health. The HIV vaccine is
exclusively licensed to CytRx by UMMS and ABL
- CytRx Corporation and the University of Massachusetts Medical
School (UMMS) significantly broadened their existing strategic
alliance with a new collaboration and invention disclosure
agreement giving CytRx option rights to license new technologies
developed at UMMS over the next three years in the fields of
RNAi, type 1 and type 2 diabetes, obesity, neurodegenerative
diseases (including ALS) and cytomegalovirus.
About CytRx Corporation
CytRx Corporation is a biopharmaceutical research and development company, based
in Los Angeles with a subsidiary in Worcester, Massachusetts. The company is
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 recently acquired 3 clinical stage compounds and a
library of 500 small molecule drug candidates from Biorex Research & Development
Company. The company has a broad-based strategic alliance with the University of
Massachusetts Medical School to develop novel compounds in the areas of ALS,
obesity, type 2 diabetes and 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 also 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
website at www.cytrx.com.
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 the products acquired from Biorex 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 the drugs purchased from Biorex, 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.
(more)
CYTRX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2004 2003
------------- -------------
(UNAUDITED)
ASSETS
Current assets:
Cash and short-term investments $ 4,436,921 $ 11,644,446
Prepaid and other current assets 736,569 236,349
------------- -------------
Total current assets 5,173,490 11,880,795
Property and equipment, net 475,149 227,413
Prepaid insurance and other assets 242,888 216,076
------------- -------------
Total assets $ 5,891,527 $ 12,324,284
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 797,184 $ 738,135
Accrued expenses and other current liabilities 1,470,427 381,977
------------- -------------
Total current liabilities 2,267,611 1,120,112
Accrued loss on facility abandonment 233,233 312,433
Deferred gain on sale of building 72,892 93,836
Deferred revenue 275,000 275,000
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Total liabilities 2,848,736 1,801,381
------------- -------------
Minority interest in subsidiary 214,677 330,287
------------- -------------
Commitments and contingencies
Stockholder' equity:
Preferred Stock, $0.01 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, $0.001 par value, 100,000,000
shares authorized; 36,097,000 and 34,392,000
shares issued at September 30, 2004 and
December 31, 2003, respectively 36,097 34,392
Additional paid-in capital 105,503,456 102,239,460
Treasury stock, at cost (633,816 shares held at
September 30, 2004 and December 31, 2003) (2,279,238) (2,279,238)
Accumulated deficit (100,432,201) (89,801,998)
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Total stockholders' equity 2,828,114 10,192,616
------------- -------------
Total liabilities and stockholders' equity $ 5,891,527 $ 12,324,284
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CYTRX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ ------------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues:
License Fees $ -- $ -- $ 328,164 $ --
Other -- -- -- --
------------ ------------ ------------ ------------
-- -- 328,164 --
------------ ------------ ------------ ------------
Expenses
Research and development (includes $40,000
and $1,334,000 of non-cash stock-based
expense for the three and nine month periods
ended September 30, 2004; $1,072,000 and
$2,901,000 of non-cash stock-based expense
for the three and nine month periods ended
September 30, 2003, respectively) 1,326,566 1,459,348 4,968,446 3,731,967
Depreciation and amortization 31,828 182,908 73,636 548,537
Common stock, stock options and warrants
issued for selling, general and
administrative services 134,314 184,114 939,601 1,821,643
Selling, general and administrative 1,360,343 1,016,288 5,143,042 2,570,128
------------ ------------ ------------ ------------
2,853,051 2,842,658 11,124,725 8,672,275
------------ ------------ ------------ ------------
Loss before other income (expense) (2,853,051) (2,842,658) (10,796,561) (8,672,275)
Other income (expense):
Interest income 10,995 19,977 50,748 47,292
Minority interest in losses of subsidiary 46,353 1,818 115,610 1,818
Equity in losses of minority-owned entity -- (5,955,659) -- (6,113,769)
Net loss $ (2,795,703) $ (8,776,522) $(10,630,203) $(14,736,934)
============ ============ ============ ============
Basic and diluted:
Loss per common share $ (0.08) $ (0.30) $ (0.30) $ (0.59)
============ ============ ============ ============
Weighted average shares outstanding 35,306,313 29,355,537 34,865,315 25,180,225
============ ============ ============ ============
CYTRX CORPORATION
CONDENSED CONSOLIDATED FINANCIAL SUMMARY
(UNAUDITED)
BALANCE SHEET HIGHLIGHTS
(IN THOUSANDS)
SEPTEMBER 30, 2004 DECEMBER 31, 2003
Cash and short-term investments $ 4,437 $11,644
Total assets $ 5,892 $12,324
Total liabilities $ 2,849 $ 1,801
Working capital $ 2,906 $10,761
Common shares outstanding 36,097 34,392