More problems appear to be surrounding CytRx Corporation (NASDAQ: CYTR) after the company reported disappointing clinical results from a late-stage trial of its cancer drug candidate called aldoxorubicin. Law firm Bronstein, Gewirtz & Grossman, LLC has announced that it is investigating the company together with certain of its officers.
According to Bronstein, it’s acting on behalf of investors in CytRx Corporation (NASDAQ: CYTR), whom it has encouraged to contact it. At this point investors can contact the law firm to discuss their rights.
The investigations of CytRx by Bronstein relate to the poor clinical results obtained in the Phase 3 study of aldoxorubicin. The company reported that aldoxorubicin didn’t show any meaningful improve in the conditions of the cancer patients who received it compared to those who received another cancer drug that is already approved and is in common use.
CytRx further said that nearly 50% of the patients in the Phase 3 study were excluded in reported data. The reason for the move to discount the data was that there was a partial clinical hold that disturbed the study.
Selloff in the stock
News that Phase 3 trial of aldoxorubicin didn’t live up to expectation triggered a selloff in the stock of CytRx Corporation (NASDAQ: CYTR) that damaged value for shareholders. As such, Bronstein’s investigation is to find out if there was a violation of securities laws that may have contributed to the sharp decline in the stock price immediate the aldoxorubicin report came out.
There is no guarantee that CytRx will discover wrongdoing or whether class-action lawsuit would be launched against the company.
Analysis of results to continue
CytRx said that it will continue with the analysis of the Phase 3 data of aldoxorubicin, perhaps to see if it can continue developing the drug or drop it. Another study later this year is expected to evaluate the efficacy of aldoxorubicin in treating small-cell lung cancer (SCLC).
Wall Street reaction to CytRx Corporation (NASDAQ: CYTR)
Analysts at FBR Capital Markets reacted to the disappointing aldoxorubicin clinical trial results by cutting their price target on the stock of CytRx Corporation (NASDAQ: CYTR) to $3 from $8.