CytRx Corp. (CYTR) shares fell 18.6% following the announcement of its intention to issue shares and the pricing of the underwritten public offering of its common stock. The company is looking to issue 10 million shares at $2.25 per share. CytRx expects gross proceeds of $22.5 million through this offering. The offering will lead to additional dilution of the shareholder base. Last year too, CytRx had issued 8 million shares.
The underwriters have been granted an option to purchase up to 1.5 million shares with a 30-day window to do so.
CytRx intends to utilize the funds raised from the issuance of shares primarily for the development of aldoxorubicin. The company also has plans to use the net proceeds for working capital, capital expenditure and research and development expenses. Cash, cash equivalents and short term investments at the end of Jun 30, 2013 were roughly $28 million.
CytRx is focused on developing its candidate, aldoxorubicin. CytRx plans to start a phase III pivotal trial with aldoxorubicin under a special protocol assessment (SPA) as a therapy for patients with soft tissue sarcomas whose tumors have progressed following treatment with chemotherapy.
CytRx will also conduct a phase IIb study with aldoxorubicin in patients with late-stage glioblastoma (brain cancer) and AIDS-related Kaposi’s sarcoma.
Currently, CytRx is conducting a global phase IIb study with aldoxorubicin as a treatment for soft tissue sarcomas and has completed a phase Ib study of aldoxorubicin in combination with doxorubicin in patients with advanced solid tumors.
CytRx has also finished a phase Ib pharmacokinetics study with aldoxorubicin in patients with metastatic solid tumors.