Cytrx Corporation Announces That FDA Has Removed Partial Clinical Hold For Cancer Drug

Cytrx Corporation (CYTR) is a biotechnology stock focused primarily on creating new forms of treatments for cancer patients. Shares of Cytrx Corporation surged as high as 10% pre-market on the news that the FDA has lifted the partial clinical hold placed on the company for its experimental drug Aldoxorubicin. The partial clinical hold on Aldoxorubicin was first placed back on December 3, 2014 when the FDA requested that the company stop recruiting patients for its phase 2 trials. The FDA did not want to halt the trials completely, but instead wanted more safety evidence that Aldoxorubicin doesn't cause a lot of damage to the patient's body.

Today, though, the FDA, having received the requested safety information from Cytrx, has removed the partial clinical hold. That means that Cytrx is now allowed to continue enrollment for all its mid-stage phase II clinical trials. The FDA probably requested safety information because Aldoxorubicin uses a chemotherapeutic agent that is currently approved for multiple cancer types, but does so in a different way. This is because Aldoxorubicin is Doxorubicin with a created linker that attaches to proteins in the body known as albumin. These tumors in the body request for and want albumin and therefore Aldoxorubicin creates an intake by the cancerous cells. This uptake occurs directly to the cancerous cells avoiding the toxicity that is associated with chemotherapeutic agents like Doxorubicin by themselves.

We think that Cytrx Corporation has now in a better position in terms of dealing with the FDA by being allowed to continue the trials. Additional good news is that despite the few months of partial clinical hold, the company is still on track to report the pivotal trial of Second-line soft tissue sarcoma by the middle of 2016. The company still has a long way to go and there is still plenty of risk involved in terms of the efficacy of Aldoxorubicin in the trial, but for now the immediate risk of the trial being halted completely is gone. The company may or may not rise on speculation as the trial completion nears, but one thing is certain is that whatever the result, it will be a major catalyst that will re-value the company completely from its $200 million market cap.

Disclosure: No position in any stocks mentioned.

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