Cytrx Announces Acquisition, Drug Delay

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CytRx Corp. shares fell 16 percent on Monday on news of a delay in the development of its lead drug candidate, despite also announcing an acquisition.

The Los Angeles-based drug developer said it would delay by at least one year a mid-stage clinical trial of its therapy for Lou Gehrig’s Disease, arimoclomol, so it can conduct additional animal toxicology studies to answer regulatory concerns. CytRx shares closed down 16 cents, or 16 percent, to 83 cents on the Nasdaq.

The FDA in January halted human trials of arimoclomol after deciding it needed additional analysis of animal studies. CytRx said it will not resume human clinical studies until the results are in, which could take up to a year.

CytRx also on Monday said it would acquire for $21.3 million Innovive Pharmaceuticals Inc., a New York-based cancer drug developer. CytRx also will assume debt and other expensive totaling $3 million. Innovive which is focuses on treatments for blood and bone cancer leukemia, has a drug approved in Japan for which it plans to seek U.S. approval.

Innovive shareholders will receive $3 million of CytRx shares up front. In addition, Innovive would be eligible for milestones of $18.3 million, payable in cash or stock. CytRx expects the deal to close in the third quarter.

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