LOS ANGELES, Nov. 15 /PRNewswire-FirstCall/ -- CytRx Corporation , 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 third quarter ended September 30, 2005.
Commenting on the quarter and recent highlights, CytRx President and CEO Steven A. Kriegsman, said, “Our leading drug candidate arimoclomol offers new hope for those afflicted with ALS, or Lou Gehrig’s disease, as it is the only drug ever to show efficacy in animal models after disease onset. We are indeed delighted with the U.S. Food and Drug Administration’s (FDA) recent approval of our Phase II protocol and the grant of “Fast Track” designation for clinical development of arimoclomol as a treatment for this particularly aggressive neurodegenerative disorder. We are pleased to report that patient dosing has begun at 10 clinical testing sites in this 80-patient clinical trial.
“Our scientific advisors believe that the novel mechanism of action, efficacy and safety of arimoclomol could also have major implications for the treatment of other neurological disorders caused by misfolded proteins in neuronal structures,” he added.
Review of Financial Results
For the third quarter of 2005, CytRx reported a net loss of $3.5 million, or $0.06 per share, compared with a net loss of $2.8 million, or $0.08 per share, for the third quarter of 2004. For the nine months ended September 30, 2005, CytRx reported a net loss of $11.5 million, or $0.20 per share, compared with a net loss of $10.6 million, or $0.30 per share, for the nine months ended September 30, 2004.
Research and development (R&D) expenses were $2.0 million in the third quarter of 2005, compared with $1.3 million in the comparable period in 2004. The increase during the third quarter of 2005 was due primarily to initiation of the Phase II clinical trial for arimoclomol, commitments to fund research and development activities conducted at the University of Massachusetts Medical School (UMMS) and Massachusetts General Hospital, and research and development activities at CytRx Laboratories.
General and administrative (G&A) expenses were $1.5 million for the 2005 third quarter, increased slightly from $1.4 million in the 2004 third quarter. The Company expects G&A expenses will continue at approximately the same level for the remainder of 2005. For the nine months ended September 30, 2005, G&A expenses were $4.4 million, compared with $5.1 million in the comparable 2004 period. The higher G&A expenses reported in the 2004 nine month period included expenses associated with a change in auditors, severance payments to certain former executives, and related legal fees.
As of September 30, 2005, cash, cash equivalents and short-term investments totaled $11.2 million, compared with $3.0 million as of December 31, 2004. The increase reflects completion of a private placement in January 2005 with net proceeds to the Company of $19.4 million. Working capital was $9.9 million as of September 30, 2005.
Recent Highlights
Recent highlights regarding CytRx’s clinical programs include the following:
* Initiation of a Phase II clinical trial for arimoclomol in the treatment of ALS following approval by FDA in September. * “Fast Track” designation granted by the FDA for arimoclomol for the treatment of ALS in September. * Dosing began in the 80-patient ALS Phase II clinical trial with arimoclomol at several clinical testing sites. * Favorable interim results reported from Phase I clinical trial on HIV DNA + protein vaccine in September. * RIP 140 siRNA advanced into development for the treatment of type 2 diabetes and obesity in August. Other corporate highlights include: * Prof. Geoffrey Burnstock, one of the world’s foremost neuroscientists, joined the CytRx Scientific Advisory Board in September. * Management presented at the UBS Global Life Sciences Conference in September and at the Rodman & Renshaw Techvest 7th Annual Healthcare Conference in November. 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. CytRx has initiated a Phase II clinical trial with its lead small molecule product candidate, arimoclomol for the treatment for amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease). Arimoclomol has received Orphan Drug and Fast Track designation from the U.S. Food and Drug Administration. CytRx has previously announced that a novel HIV DNA + protein vaccine exclusively licensed to CytRx and developed by researchers at University of Massachusetts Medical School (UMMS) and Advanced BioScience Laboratories, and funded by the National Institutes of Health, demonstrated very promising interim Phase I clinical trial results that indicate its ability to produce potent antibody responses with neutralizing activity against multiple HIV viral strains. CytRx also has a broad-based strategic alliance with UMMS to develop novel compounds in the areas of ALS, obesity, type 2 diabetes and cytomegalovirus (CMV) using RNAi technology. 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 at www.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. Examples of such statements include, but are not limited to, statements relating to the expected timing, scope and results of our clinical development and research programs, including the initiation of clinical trials, and statements regarding the potential benefits of our drug candidates and potential drug candidates. 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 or uncertainties regarding regulatory approvals for clinical testing and the scope of the clinical testing that may be required by regulatory authorities for its molecular chaperone co-induction drug candidates, including arimoclomol, and other products, and the timing and outcomes of those tests, uncertainties related to the early stage of CytRx’s diabetes, obesity, cytomegalovirus and ALS research, the need for future clinical testing of any RNAi-based products and small molecules 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 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.
For Additional Information: CytRx Corporation: Ed Umali (eumali@cytrx.com) Director of Corporate Communications (310) 826-5648, ext. 309 CEOcast, Inc. Investor Contacts: Kevin Theiss (ktheiss@ceocast.com) Cormac Glynn (cglynn@ceocast.com) (212) 732-4300 CYTRX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, December 31, 2005 2004 ASSETS Current assets: Cash and short-term investments $11,212,309 $2,999,409 Prepaid and other current assets 459,361 956,146 Total current assets 11,671,670 3,955,555 Property and equipment, net 380,048 447,579 Molecular library, net 395,352 447,567 Goodwill 183,780 -- Prepaid insurance and other assets 103,118 198,055 Total assets $12,733,968 $5,048,756 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $551,433 $1,661,104 Accrued expenses and other current liabilities 1,240,243 1,074,146 Total current liabilities 1,791,676 2,735,250 Accrued loss on facility abandonment -- 206,833 Deferred gain on sale of building -- 65,910 Deferred revenue 275,000 275,000 Total liabilities 2,066,676 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, 125,000,000 shares authorized; 58,824,608 and 40,190,000 shares issued at September 30, 2005 and December 31, 2004, respectively 58,824 40,190 Additional paid-in capital 130,609,988 110,028,327 Treasury stock, at cost (633,816 shares, at cost, held at September 30, 2005 and December 31, 2004) (2,279,238) (2,279,238) Accumulated deficit (117,722,282) (106,194,187) Total stockholders’ equity 10,667,292 1,595,092 Total liabilities and stockholders’ equity $12,733,968 $5,048,756 CYTRX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Revenues: License fees $-- $-- $1,500 $328,164 Other 10,000 -- 10,000 -- 10,000 -- 11,500 328,164 Expenses: Research and development (includes $32,000 and $122,000 of non-cash stock-based expense for the three and nine-month periods ended September 30, 2005, respectively, and $40,000 and $1,334,000 of non-cash stock-based expense for the three and nine-month periods ended September 30, 2004, respectively) 1,990,963 1,326,566 6,820,952 4,968,446 Depreciation and amortization 58,074 31,828 158,486 73,636 Common stock, stock options and warrants issued for general and administrative services 26,497 134,314 342,561 939,601 Selling, general and administrative 1,467,356 1,360,343 4,423,198 5,143,042 3,542,890 2,853,051 11,745,197 11,124,725 Loss before other income (3,532,890) (2,853,051) (11,733,697) (10,796,561) Other income: Interest income 40,420 10,995 124,150 50,748 Minority interest in losses of subsidiary 46,353 81,452 115,610 Net loss $(3,492,470) $(2,795,703) $(11,528,095) $(10,630,203) Basic and diluted: Loss per common share $(0.06) $(0.08) $(0.20) $(0.30) Weighted average shares outstanding 58,190,792 35,306,313 56,367,717 34,865,315
CytRx Corporation
CONTACT: Ed Umali, Director of Corporate Communications of CytRxCorporation, +1-310-826-5648, ext. 309, eumali@cytrx.com; or investors,Kevin Theiss, ktheiss@ceocast.com, or Cormac Glynn, cglynn@ceocast.com,both of CEOcast, Inc., +1-212-732-4300, for CytRx
Web site: http://www.cytrx.com/
