Reverse Stock Split Gives Shot in Arm to Drug Firm

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Reverse Stock Split Gives Shot in Arm to Drug Firm
Steven Kreigsman

What a difference a reverse stock split and some good news have made for cancer drug developer CytRx Corp.

When the West L.A. company did a 1-for-7 split May 15, it resulted in a $2.59 stock price, from 35 cents. Since then, shares have climbed 50 percent, closing at $3.88 on June 13.

CytRx learned last week that it was slated to rejoin the Russell Microcap Index at the end of the month, less than a year after the company was kicked off. In addition, the company has regained compliance with Nasdaq listing requirements after months of warnings that the company needed to get its stock price consistently above $1 in order to remain listed.

The company also had good news to report in its core business: developing drugs that treat hard-to-kill tumors. Doctors at a meeting of the American Society of Clinical Oncology were impressed by a June 4 presentation of midstage clinical trial results for CytRx’s lead drug candidate.

Joseph Pantginis, an analyst at Roth Capital Partners in New York, told his clients he saw a number of research oncologists at Asco asking company representatives how they could get their clinics included in upcoming late-stage trials of the drug, Inno-206, which is designed to shrink tumors without the toxicity of currently approved drugs.

“While the data is early stage and only involve a small number of patients … we find that the (presentation) garnered a sizable amount of attention at Asco,” said Pantginis, who has a “buy” rating on shares with a 12-month price target of $14.

Last summer, CytRx came under investor criticism when it announced a $19 million stock offering that shareholders perceived as highly dilutive. Chief Executive Steven Kreigsman said at the time that his board members acted when they did because the window was shrinking to raise enough money to finance not only the Inno-206 study presented at Asco but also clinical trials for the company’s two other cancer drugs.

Kreigsman said he was pleased with the reception that Inno-206 received at Asco, noting that additional drug companies have inquired about becoming partners in studies of the drug for treatment of pancreatic and other cancers.

“By getting the financing done when we did, we had the money we needed to get to this point,” Kreigsman said.

A panel of cancer drug experts met with CytRx management last month to craft a design for the final stage of trials, which the company hopes to submit for Food and Drug Administration approval in the third quarter. Kreigsman said that if all goes as planned, data from the studies could be available next year.

Senior Tablets

LivHome Inc., a Miracle Mile-based company that provides at-home care for seniors in California and seven other states, is launching a tablet computer-based remote care service for older adults.

Chief Executive Mike Nicholson said the service, LivIndependa, targets seniors who are beginning to require some help so they can continue to live at home but who don’t yet need an at-home caregiver. The service is designed to help the company’s care managers to monitor their clients’ health and safety remotely.

Clients connected to the service use a computer application that allows around the clock monitoring. If a client doesn’t check in about taking their medication, exercising, going to a doctor’s appointment or other pre-established alerts, their personal care manager can quickly follow up by e-mail, phone or in person.

Taking advantage of the tablet computer’s other capabilities, the service also can introduce social networking that promotes emotional health to seniors who might not be computer literate, the company said.

“This includes everything from e-mail to photos and video chat,” said Kian Saneii, chief executive of San Diego’s Independa, which worked with LivHome to develop the technology. “They can also use LivIndependa to record their Life Stories (an app on the tablet) to be shared electronically with children and grandchildren.”

Staff reporter Deborah Crowe can be reached [email protected] or at (323) 549-5225, ext. 232.

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