The bear thesis on CytRx (CYTR - Get Report)  was simple. Aldoxorubicin, the company's cancer drug, is no different from doxorubicin, the old chemotherapy drug from which it is derived. Doxorubicin is minimally effective against sarcoma, therefore, the phase III study of aldoxorubicin in sarcoma will fail.

On Monday, the CytRx bear thesis was confirmed.

CytRx shares are down 60% to $1.01 in Monday's after-hours trading session. The stock closed at $2.51 per share.

In the phase III study, aldoxorubicin delayed the regrowth of tumors in sarcoma patients by a median of 4.17 months compared to a median of 4.04 months for sarcoma patients treated with investigator's choice of therapies, which included doxorobucin.

Overall, aldoxorubicin delayed progression-free survival (PFS) by just 9% compared to the control arm.

The phase III study failed.

CytRx tried to apply a heavy dose of spin to the negative results, claiming that an earlier clinical hold placed on the study prevented a mature analysis of the PFS primary endpoint.

Don't believe the B.S. The final analysis of the phase II study was predicated on 191 PFS events, which occurred. The follow-up of patients enrolled in the study is irrelevant.

The aldoxorubicin sarcoma study failure leaves CytRx with a depleted pipeline. The company has about 40 cents per share in cash on hand.

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.