CytRx (CYTR) is in a countdown to failure.

Data from the company's phase III study of aldoxorubicin for the treatment of patients with soft-tissue sarcoma are being analyzed right now, with an announcement of results expected toward the end of June.

CytRx is hoping for a win, of course. If aldoxorubicin can significantly delay the regrowth of tumors compared to a dealer's choice of control therapies -- the study's primary endpoint -- the company should have enough data to file a marketing application with the U.S. Food and Drug Administration.

And if aldoxorubicin is approved as a new treatment for sarcoma, CytRx will succeed where competing biotech companies Ziopharm (ZIOP) - Get Report and Threshold Pharmaceuticals (THLD) have already fallen short.

Reality is likely to reveal a harsher truth. Aldoxorubicin is really no different from doxorubicin, the old chemotherapy drug from which it is derived. Doxorubicin is minimally effective against sarcoma.

CytRx conducted a phase II study of aldoxorubicin in sarcoma, which was supposed to have justified the decision to advance to the phase III study and provide confidence in a positive result. But when you take a deep dive into that old phase II study (as I did), what emerges is an alarming picture of a sarcoma drug that really doesn't work as advertised.

At Monday's $3.07 close, CytRx carries a $200 million market valuation into the aldoxorubicin phase III results. Celator may have recently escaped the Feuerstein-Ratain Rule dead zone, but it will be exceedingly difficult for CytRx to do the same.

I checked in with one of my most reliable and bearish investor sources to see what he thought about CytRx. This is the same guy who made the correct bear call on Chiasma last month, among others great biotech bear calls.

He's short CytRx, too, on belief that the aldoxorubicin phase III study fails. I've incorporated some of his analysis below.

As I mentioned, aldoxorubicin is a reformulation of the old chemotherapy drug doxorubicin. The addition of a linker molecule which binds to albumin in the blood is supposed to drive greater uptake of aldoxorubicin inside the tumor than what is typically possibly when using doxorubicin. Higher dosing of aldoxorubicin contained within tumor cells (and not leaking into the healthy tissue) is supposed to drive superior efficacy and better safety compared to doxorubicin, or so the CytRx folks want investors to believe.

In the phase IIb study, CytRx compared a 350 mg/m2 dose of aldoxorubicin to the standard 75 mg/m2 dose of doxorubicin. (There's your higher comparable dosing). One hundred-twenty three patients with newly diagnosed, advanced soft tissue sarcoma were enrolled in the study -- 83 patients treated with aldoxorubicin, 40 patients with doxorubicin. The study was open label, meaning doctors and patients knew which drug they received.

The results: Aldoxorubicin doubled the time before patients' tumors started to grow compared to doxorubicin. Median progression-free survival (PFS) in the aldoxorubicin arm was 5.8 months compared to 2.7 months in the doxorubicin arm, as measured by a central lab review. The difference was statistically significant.

So, too, was the difference in tumor shrinkage between the two drugs. The response rate to aldoxorubicin was 23% compared to 0% for doxorubicin.

CytRx has presented data from this aldoxorubicin phase II study at medical meetings. The study also was published last December in JAMA Oncology.

Read the published study. When you do, you'll see the demonstrated benefit of aldoxorubicin is derived almost entirely from a significant underperformance of the doxorubicin control arm. Meantime, the aldoxorubicin efficacy results are what you'd expect to see from regular doxorubicin.

The median number of treatment cycles administered in the phase II study was six for the aldoxorubicin arm and four for the doxorubicin arm. It appears that doctors in the open label study cut off sarcoma patients from doxorubicin too quickly, resulting in poorer-than-expected PFS and response rate.

Consider the 447-patient phase III study of Ziopharm's palifosfamide compared against doxorubicin in front-line sarcoma -- the same type of patient enrolled in the CytRx study.

In the 2013 Ziopharm study, sarcoma patients treated with doxorubicin reported a median progression-free survival of 5.2 months. That's essentially the same median PFS reported by CytRx for the aldoxorubicin-treated patients.

The Ziopharm study was larger so the data are more credible. I'm more apt to believe the median PFS of 5.2 months from the doxorubicin arm of the Ziopharm study than I am the median PFS of 2.8 months from the smaller CytRx study.

Another randomized and controlled study of 228 newly diagnosed sarcoma patients published in Lancet Oncology in April 2014 shows doxorubicin demonstrating a median PFS of 4.6 months. Fourteen percent of the same sarcoma patients responding to doxorubicin, meaning they showed objective tumor shrinkage.

These comparable data from larger, well-run studies raised big question marks about the conduct of CytRx's phase II study. If you believe the CytRx data, none of the sarcoma patients responded to treatment with doxorubicin. That's simply not credible.

Sure enough, more than 60% of the patients enrolled in the aldoxorubicin study came from India, Romania, Russia, Hungary and the Ukraine -- hardly the most reliable geographies for reporting reliable and reproducible clinical trial data.

If aldoxorubicin is no different than doxorubicin -- and all clinical evidence points in that direction -- what does that mean for CytRx's ongoing phase III study?

It's not good. CytRx decided to enroll second-line sarcoma patients in the phase III study, meaning the patients have tumors no longer responsive to initial treatment with chemotherapy, including doxorubicin. Upon entering the study, the 400-plus sarcoma patients are randomized to receive treatment with aldoxorubicin or a "doctor's choice" of five different, comparative therapies.

There isn't much in the medical literature to pinpoint the efficacy of the control arm therapies for second-line sarcoma patients, but they're all active enough to the point that CytRx will find it exceedingly difficult to tease out any significant benefit for aldoxorubicin.

Most of the sarcoma patients enrolled in CytRx's study will have already been exposed to doxorubicin, so giving it to them again in the form of aldoxorubicin isn't going to help.

CytRx says the announcement of the phase III study results are expected at the end of the second quarter.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.