Shares of West L.A. biotech CytRx Corp. plunged more than a third Wednesday morning after the West L.A. biotech priced a stock and warrant offering that the markets apparently believed was too dilutive.

Cytrx , which develops cancer drugs, first announced the offering late Tuesday. It said it expects net proceeds of about $19 million from the offering, which it intends to use for clinical development of three drug candidates and for general corporate purposes.

It priced an offering of 39.2 million shares of common stock plus warrants to purchase up to another 39.2 million shares at a combined price of 52 cents. The warrants are exercisable immediately at a price of 64 cents a share. Unless exercised, they will expire on the fifth anniversary of issuance.

Cytrx currently has 109 million shares outstanding. Assuming all the warrants were exercised, that would result in a 72 percent increase in the shares outstanding.

Cowen and Co. LLC and Roth Capital Partners LLC are underwriters of the offering. CytRx has granted them a 30-day option to purchase up to an additional 15 percent of shares of common stock and warrants to cover over-allotments, for additional gross proceeds of about $3 million. The offering is expected to close on or about Aug. 1.

Shares closed down 24 cents, or nearly 37 percent, to 41 cents on the Nasdaq.