CytRx Corporation Announces Settlement Of Stockholder Derivative Lawsuit In Delaware

LOS ANGELES, June 2, 2015 /PRNewswire/ -- CytRx Corporation (NASDAQ: CYTR), a biopharmaceutical research and development company specializing in oncology, today announced that it has reached an agreement to settle the stockholder derivative action pending in the Delaware Court of Chancery, which names as defendants a number of the Company's current and former directors and officers, and names the Company as a nominal defendant.

The lawsuit, captioned In re CytRx Corp. Stockholder Derivative Litigation, C.A. No. 9864-VCL, relates to the Company's issuance and pricing of stock options to its directors and officers in December 2013.  Although the individual defendants have denied any liability or wrongdoing in connection with the allegations contained in the lawsuit, they believe that it is in the best interests of the Company and its stockholders to settle the matter on reasonable terms to avoid potentially protracted and expensive litigation.

The settlement provides that the Company will re-price 2,095,000 stock options that were collectively granted on December 10, 2013 to Louis Ignarro, Joseph Rubinfeld, Marvin L. Selter, Richard L. Wennekamp, Steven A. Kriegsman, John Y. Caloz and Benjamin S. Levin, from the original exercise price of $2.39 to an exercise price of $4.66 (the share price at market closing on December 20, 2013).  The settlement also provides that the Company will implement certain corporate governance changes and modify certain governance practices regarding the granting of stock option grants. Under the settlement, it is not expected that the Company will incur any out-of-pocket expenses.

"We believe that settling this case is in the best interest of all parties and will help avoid further risk to our business," said Steven A. Kriegsman, Chairman and CEO of CytRx.  "Our main focus continues to be the successful execution of our clinical programs, including our global Phase 3 pivotal clinical trial of aldoxorubicin for the treatment of second-line soft tissue sarcoma and our global Phase 2b clinical trial of aldoxorubicin for the treatment of second-line small cell lung cancer.  We remain committed to our primary corporate objective of leveraging our albumin-binding anti-cancer drug platform to advance new treatments in cancer care."

The parties have not yet reached an agreement on an amount of any award of fees and expenses to plaintiffs' attorneys.  The settlement is subject to approval by the Delaware Court of Chancery and certain other conditions, including notice to the Company's stockholders.

About CytRx Corporation

CytRx Corporation is a biopharmaceutical research and development company specializing in oncology.  CytRx currently is focused on the clinical development of aldoxorubicin (formerly known as INNO-206), its improved version of the widely used chemotherapeutic agent doxorubicin. CytRx has initiated under a special protocol assessment a pivotal Phase 3 global trial with aldoxorubicin as a therapy for patients with soft tissue sarcomas whose tumors have progressed following treatment with chemotherapy, and has announced that it has received approval from the FDA to continue dosing patients with aldoxorubicin until disease progression in that clinical trial. CytRx is currently evaluating aldoxorubicin in a global Phase 2b clinical trial in small cell lung cancer, a Phase 2 clinical trial in HIV-related Kaposi's sarcoma, a Phase 2 clinical trial in patients with late-stage glioblastoma (brain cancer), a Phase 1b trial in combination with ifosfamide in patients with soft tissue sarcoma, and a Phase 1b trial in combination with gemcitabine in subjects with metastatic solid tumors. CytRx has completed a global Phase 2b clinical trial with aldoxorubicin as a first-line therapy for soft tissue sarcomas, a Phase 1b/2 clinical trial primarily in the same indication, a Phase 1b clinical trial of aldoxorubicin in combination with doxorubicin in patients with advanced solid tumors and a Phase 1b pharmacokinetics clinical trial in patients with metastatic solid tumors. CytRx plans to expand its pipeline of oncology candidates at its laboratory facilities in Freiburg, Germany, based on novel linker technologies that can be utilized with multiple chemotherapeutic agents and may allow for greater concentration of drug at tumor sites.  For more information about CytRx Corporation, 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, the timing or FDA approval of projected commercial sales of aldoxorubicin, the risk that any future human testing of aldoxorubicin 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 the Phase 3 clinical development of aldoxorubicin, risks related to other lawsuits that have been brought against the Company and its officers and/or directors for alleged violations of the securities laws, the risk that the settlement described in this press release will not be approved by the Delaware Chancery Court, 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.

Investor Relations:
Argot Partners
Michelle Carroll
212.600.1902
michelle@argotpartners.com

Legend Securities
John Columbia
800-385-5790 ext 164
718-233-2677 (Direct)
jcolumbia@legendsecurities.com

Media:
Argot Partners
Eliza Schleifstein
973.361.1546
eliza@argotpartners.com

Company Contact:
CytRx Corporation
David J. Haen
Vice President, Business Development and Investor Relations
310-826-5648, x304
dhaen@cytrx.com

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SOURCE CytRx Corporation