[CYTRX LOGO]
FOR ADDITIONAL INFORMATION:
CytRx Corporation:
Carolyn French
Director of Communications
310/826-5648
cfrench@cytrx.com
Investor Relations Group:
Lisa Lindberg/John Nesbett
212/825-3210
CYTRX REPORTS FOURTH QUARTER AND FISCAL 2003 RESULTS
LOS ANGELES, CA - MAY 14, 2004 - CytRx Corporation (Nasdaq: CYTRE) today
announced the results of its operations for the fourth quarter and fiscal year
ended December 31, 2003. The company has also now filed its Annual Report on
Form 10-K for 2003 with the SEC.
The company reported a net loss of $3.1 million, or $0.09 per share, for the
quarter ended December 31, 2003 compared to $2.5 million, or $0.12 per share,
for the same period in 2002. Net loss for the year ended December 31, 2003 was
$17.8 million, or $0.65 per share, compared to $6.2 million, or $0.39 per share
for the same period last year.
Research and development costs were $4.4 million for the year ending December
31, 2003, compared to $0.8 million for 2002.
Cash and cash equivalents and short-term investments at December, 2003 were
$11.6 million compared to $1.8 million at the end of 2002.
The majority of CytRx's expenses resulted from a strategic decision by the
company to focus the company's resources on the development of proprietary RNAi
technology for ALS, type 2 diabetes and obesity. In addition, and as previously
reported by the company, the company wrote-off its investment in Blizzard
Genomics and another development-stage genomics company. This non-cash write off
of $5.87 million was taken in the third quarter of 2003, and the company has now
filed an amended Form 10-Q to reflect the write-off being made in that quarter.
Commented Steven A. Kriegsman, President and CEO of CytRx, "2003 was an
absolutely pivotal year for the company that transformed CytRx into a leader in
the RNAi field. We licensed RNAi technology that we feel has the potential to
revolutionize the way ALS, type 2 diabetes and obesity may be treated. During
the year we funded world-class facilities and scientific talent to support this
initiative."
Mr. Kriegsman continued, "Thanks to two private placements, CytRx had a cash
position of approximately $12 million at the end of 2003, which gives us the
resources to start funding our pre-clinical development for our ALS, obesity and
type 2 diabetes programs. We further enhanced our capital structure by electing
not to invest further monies in two genomics companies that we felt did not fit
with our new corporate strategy."
Highlights for 2003 include:
- The company licensed RNAi technology from UMMS for the
development of lead drug compounds for use in the treatment of
obesity and type 2 diabetes. The research sponsored by CytRx is
being led by Michael Czech, Ph.D., an internationally renowned
authority in the field of obesity and type 2 diabetes and a
founder of the company's CytRx Laboratories, Inc. (formerly
known as Araios, Inc.) subsidiary.
- The company established an exclusive, worldwide, royalty-bearing
license agreement with UMMS to use UMMS' RNAi technology to
develop a treatment for a form of ALS.
- The company licensed from UMMS the exclusive worldwide
commercial rights to a novel DNA-based HIV vaccine technology.
Enrollment of volunteers for a Phase I study of an HIV vaccine
that incorporates the company's technology commenced in April
2004, and the company will acquire this vaccine after completion
of the Phase I trial.
- The Company established a subsidiary, CytRx Laboratories, to
develop orally active small molecule-based drugs to prevent,
treat and cure obesity and type 2 diabetes. Mark A. Tepper,
Ph.D., President of CytRx Laboratories, leads a team of world
renowned scientific advisors who are working with this
subsidiary.
- CytRx and Massachusetts General Hospital jointly initiated a
research program for the use of RNAi in the development of an
effective treatment for certain cases of ALS. The research
program is led by Robert H. Brown, Jr., M.D., Ph.D., Director of
the Cecil B. Day Laboratory for Neuromuscular Research at
Massachusetts General Hospital.
- CytRx entered into an agreement to outlicense its co-polymer
technologies, including FLOCOR, Opti-Vax and related
anti-infective products, on an exclusive basis to SynthRx, Inc,
a Houston-based biopharmaceutical company.
- During 2003, the company raised approximately $14 million from
private placements.
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 ribonucleic
acid interference (RNAi), for the human health care market, in a variety of
therapeutic categories. The company has a broad-based strategic alliance with
the University of Massachusetts Medical School to develop novel compounds for
obesity, type 2 diabetes, CMV and ALS using RNAi technology. CytRx also licensed
from UMMS the rights to a DNA-based HIV vaccine technology. 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 prevention,
treatment or cure of ALS. The company has licensed its TranzFect delivery
technology for DNA-based vaccines for certain diseases. 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 that may be developed by CytRx, the
significant time and expense that will be incurred in developing any of the
potential commercial applications for CytRx's RNAi technology, CytRx's potential
need for additional capital, risks relating to the enforceability of any patents
covering CytRx's products and to the possible infringement of third party
patents by those products, the impact of third party reimbursement policies on
the use of and pricing for CytRx's products, and the potential impact of pending
or future legal proceedings. 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 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 CONSOLIDATED FINANCIAL SUMMARY
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
INCOME:
Service revenues $ -- $ -- $ -- $ 22,453
License fees 90,000 50,000 94,000 1,051,000
Grant revenue -- -- -- 46,144
------------ ------------ ------------ ------------
90,000 50,000 94,000 1,119,597
------------ ------------ ------------ ------------
EXPENSES:
Cost of service revenues -- -- -- 11,287
Research & development (includes
non-cash stock compensation of
$2,902,484 in 2003) 655,632 268,845 4,387,599 767,102
Common stock, stock options and
warrants issued for selling,
general and administrative 1,326,404 -- 3,148,047 229,550
Selling, general and administrative 1,266,492 374,962 3,840,620 1,703,402
Depreciation and amortization 1,855 189,980 2,130 793,563
Severance and other contractual
payments to officers -- -- -- 1,822,454
Asset impairment charge -- 920,939 -- 920,939
Loss on facility abandonment -- 477,686 -- 477,686
------------ ------------ ------------ ------------
3,250,383 2,232,412 11,378,396 6,725,983
------------ ------------ ------------ ------------
Loss before other income (3,160,383) (2,182,412) (11,284,396) (5,606,386)
OTHER INCOME-
Interest income 34,772 12,671 82,064 95,508
------------ ------------ ------------ ------------
(3,125,611) (2,169,741) (11,202,332) (5,510,878)
Equity in losses from minority-owned
entity -- (349,009) (6,662,031) (664,758)
Minority interest in losses of subsidiary 17,945 -- 19,763 --
------------ ------------ ------------ ------------
Net loss $ (3,107,666) $ (2,518,750) $(17,844,600) $ (6,175,636)
============ ============ ============ ============
Basic and diluted loss per common share (0.09) (0.12) (0.65) (0.39)
============ ============ ============ ============
Basic and diluted weighted average
shares outstanding 33,688,570 21,510,111 27,324,794 16,004,155
============ ============ ============ ============
CYTRX CORPORATION
CONDENSED CONSOLIDATED FINANCIAL SUMMARY
BALANCE SHEET HIGHLIGHTS
(IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
2003 2002
------------ ------------
Cash and short-term investments $11,644 $ 1,789
Total assets $12,324 $ 9,284
Total liabilities $ 1,801 $ 1,324
Common shares outstanding 34,392 22,144