Cytrx Reports Positive Phase 2 Results In Patients With Brain Cancer Using Aldoxorubicin

Shares of Cytrx Corporation (CYTR) soared 20% on the news that their cancer drug, Aldoxorubicin, achieved positive phase 2 results in patients with brain cancer. Phase 2 is to show clinical efficacy but Cytrx hit the ball out of the park. This is because 12 patients enrolled in the trial showed tumor shrinkage in the brain, and one of the 12 patients had a complete response. A complete response is where the tumor is completely gone and the patient has achieved a full cure of their cancer. This phase 2 trial is expected to enroll up to 28 patients in total who will be receiving Aldoxorubicin to treat their brain cancer. The primary endpoint of the study will be progression-free survival at at 6-month time point along with overall survival upon completion of the trial. Progression-free survival is how long the patient goes in the trial without their cancer advancing or becoming worse. Overall survival measures the amount of time the patient goes through to the end of the trial.

The type of brain cancer in these patients is known as Glioblastoma multiforme. Glioblastoma multiforme is the most aggressive form of brain cancer in which patients have limited treatment options. Some other treatment options include chemotherapy along with surgery, but both carry significant risks to the patient. Aldoxorubicin is a chemotherapeutic agent in a way because it is derived from doxorubicin. Cytrx has been able to combine doxorubicin with an acid linker known as EMCH that creates the compound Aldoxorubicin. This combination allows the drug to be more efficacious in a variety of cancers, reduce toxicity (minimize side effects), and work more quickly to reach the cancerous target.

With this compound Cytrx can target many other types of cancers as well. The company's lead drug compound is currently testing Aldoxorubicin in patients with soft tissue sarcoma in a phase 3 trial. This treatment is used as a second-line type of treatment which occurs when patients have failed with primary treatment of a placebo compound.  

Although currently the FDA has placed a partial hold on the trials with Aldoxorubicin, that doesn't mean that the trials have been stopped completely; on the contrary the FDA is allowing Cytrx to continue to treat these patients but the company can't enroll new patients into the trial until the FDA hold is lifted. Cytrx believes that it will establish its safety issue with the FDA and remove the partial clinical hold in a timely manner. We believe that the issue will be resolved, as a partial clinical hold doesn't merit too much worry. On the other hand had the FDA issued a full clinical hold, then that would be a different story.

An additional catalyst will be when Cytrx reports some preliminary phase 2 results in patients with Kaposi's sarcoma in the first half of 2015. Today's volume is trading at 13 times the normal average volume so the company may be obtaining new interested investors. We feel that the partial clinical holds will be lifted. Right now Cytrx trades at $3.37 per share which we feel is way too low for a biotechnology company with a phase 3 trial along with multiple phase 2 trials. This is because the company has already proving that its compound works against two forms of cancer which minimizes its risk profile greatly. The only obstacle is, when will the FDA be able to lift the partial clinical hold and allow the company to enroll more patients who desperately need a better form of treatment.