CytRx Corporation (NASDAQ:CYTR)
Shares of CytRx Corporation (NASDAQ:CYTR) are up over 45% as of 11:50AM EST on news that the oncology-focused biopharmaceutical R&D firm entered into a global strategic license with NantCell, Inc., for the exclusive rights to develop and commercialize aldoxorubicin for all indications. NantCell, a privately held subsidiary of NantWorks, LLC, is a clinical stage immuno-oncology company focused on developing novel molecularly targeted therapeutics for cancer patients. The sharp rise in the share price comes with a strong increase in volume – about ten times the listed daily average.
Terms of the license agreement include a “strategic investment” of $13 million worth of CYTR common stock by NantCell – shares priced at $1.10 per share. CYTR shares closed at $0.57 yesterday. CytRx Corporation (NASDAQ:CYTR) may also receive an additional $343 million in milestone payments related to regulatory approvals and commercial milestones for aldoxorubicin. In addition, CytRx will receive growing double-digit royalties for sales of aldoxorubicin for soft tissue sarcomas and mid-to-high single digit royalties for all other indications. NantCell will absorb all expenses for all future development, manufacturing and commercialization efforts. Lastly, NantCell purchased a warrant exercisable for up to 3 million shares of common stock at $1.10 over the next 18 months.
CytRx Corporation (NASDAQ:CYTR) shares have a 52-week high of $0.99 and a consensus target price of $4.00. YTD, CYTR shares have performed well, gaining over 53% however they are still down over 5% for the past year. Three investment firms follow CytRx Corporation (NASDAQ:CYTR) and two rate CYTR shares as a “Strong Buy” while one rates the shares as a “Hold”.
Shareholders have been patient. Over the past five years, the company has never posted a profit. In 2012 the per share loss was (-$0.78). Losses continued over the years and in 2016 was (-$0.63) per share. Meanwhile the number of outstanding shares continued to grow annually thereby diluting shareholders. In 2012, the number of outstanding shares was listed at 22.97 million. But by 2016 that number had steadily grown and was listed at 81.06 million.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.