Talk about the worst possible timing for a stock offering.

CytRx Corp. executives already knew last week that some investors weren’t going to be pleased that the West Los Angeles biotech company was going through with its third offering of roughly 10 million shares in just 30 months.

Yet CytRx is facing key clinical trials on its main cancer-fighting drug early next year and needed more cash. And since shares of biotech companies had been on a roll recently, company executives sensed they had a narrow window amid the prospect of the government’s partial shutdown forcing the Food and Drug Administration to halt or slow drug testing programs.

So they chose last Tuesday, Oct. 8, to hit the market. But biotech investors were jittery about the unfolding events in Washington and picked that day to unload shares, creating the sector’s worst one-day selloff in two years. The iShares Nasdaq Biotechnology Fund, which holds shares in more than 100 biotech companies, fell 4.4 percent.

The damage was more severe among small- and mid-cap companies, especially locally. Shares of CytRx, Puma Biotechnology, MannKind Corp. and Response Genetics all plunged more than 10 percent on Oct. 8, placing all four among the biggest losers last week on the LABJ Stock Index. (See page 24.)

The slide for CytRx continued on Oct. 9 as more bad news hit the cancer-fighting drug sector: the FDA had stopped a clinical trial of a drug from Ariad Pharmaceuticals due to safety concerns. By the end of the two-day slide, CytRx shares had shed 31 percent of their value, closing at $2.23 and making the company the biggest loser on the LABJ index last week.

“We had no idea that we would go into the market at same time the whole industry tanked,” said David Haen, vice president of business development and investor relations for CytRx.

On the other hand, its shares had just come off a huge runup. Last month, CytRx released the results of a successful clinical trial of its main drug in the pipeline: a helper molecule for a generic chemotherapy drug, doxorubicin. The CytRx molecule is designed to boost the effectiveness of doxorubicin while reducing adverse side effects. News of the successful trial sent CytRx shares up 35 percent over a week, peaking at $3.38 on Sept. 27.

The end result of last week’s turmoil? “Our stock price has returned to the historical norm for the year,” Haen said.