CytRx Corporation (NASDAQ:CYTR) tumbled by more than 50% in the market after the drug maker failed to prove that its cancer drug, aldoxorubicin, is better than other drugs in the market. In a press release, the company has attributed the less than favorable clinical results to a partial clinical hold in November 2014.
The company says the holdup made it impossible for it to follow up the more than two-thirds of the patients that enrolled for the Phase 3 study. The interruption according to CytRx meant that almost two thirds of the patients in Phase 3 could not take part in the current progression-free survival evaluation. To address the deficiency the company plans to carry out a second analysis that will include patients follow up for better results.
The company expects results of the second analysis to be ready by the fourth quarter, in time for an end-of-phase 3 meeting with the Food and Drugs Administration. With about $68.2 million in cash and equivalent, the company remains confident of carrying out the second analysis without any hitches.
Headwinds Facing CytRx
Even as the CytRx remains confident of its prospects on the proposed second analysis, class action lawsuits threaten to derail its plans. Lundin Law PC among other firms have initiated investigations against the company over possible violation of federal securities laws. The investigation will try to find out whether the company violated the Securities Exchange Act of 1934 on Phase 3 trial of its cancer drug aldoxorubicin.
A possible class action lawsuit will not be the only thing for CytRx Corporation (NASDAQ:CYTR) to worry about, in the coming days. Its stock has shed more than 60% in market value since the start of the year, having clocked a new 52-week low of $0.74 a share this week. For the three months of the year, the company posted a net loss of $12.6 million translating to a net loss of $19 cents a share.