Why CytRx (CYTR) Stock Is Surging Today

NEW YORK (TheStreet) -- Shares of CytRx Corp. (CYTR) are surging 6.30% to 4.05 today.

The biopharmaceutical R&D firm announced that positive preclinical results from an in vivo study of aldoxorubicin in an animal model of glioblastoma will be presented at the American Association for Cancer Research Annual Meeting being held April 5-9, 2014 in San Diego, CA.

CytRx announced data from the trial, which demonstrated that aldoxorubicin significantly increased survival almost 21/2 fold compared to doxorubicin treatment in an in vivo xenograft tumor model employing growth of human glioblastoma multiforme (GBM) tumors in mouse brains.

Aldoxorubicin, but not doxorubicin, also demonstrated preferential accumulation and prolonged retention in the tumor tissue.

These data, combined with aldoxorubicin's favorable safety profile, support the current evaluation of aldoxorubicin as a treatment for patients with GBM tumors.

The company specializes in oncology

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Separately, the company said an investor of CytRx filed a federal securities fraud class action complaint in the U.S. District Court for the Central District of California.

TheStreet Ratings team rates CYTRX CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CYTRX CORP (CYTR) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, poor profit margins and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 730.0% when compared to the same quarter one year ago, falling from $1.58 million to -$9.98 million.
  • Net operating cash flow has decreased to -$4.85 million or 10.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for CYTRX CORP is currently extremely low, coming in at 0.00%. CYTR has continued with the weak profit margin when compared to the same quarter of last year.
  • CYTRX CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CYTRX CORP reported poor results of -$0.91 versus -$0.84 in the prior year. This year, the market expects an improvement in earnings (-$0.64 versus -$0.91).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, CYTRX CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CYTR Ratings Report

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